SaskPower pays out $12M to Cenovus for not providing captured carbon dioxide

The Saskatchewan government has had to pay out about $12 million to an energy company for failing to deliver enough carbon dioxide from its carbon capture facility and the amount might go up.

SaskPower has a deal to sell captured CO2 from its Boundary Dam power plant to Cenovus to be used for enhanced oil recovery.

SaskPower was supposed to start delivering the captured CO2 from the plant in April 2014, but the $1.4-billion carbon capture facility wasn’t ready until October 2014.

SaskPower CEO Mike Marsh also says they may owe Cenovus another $5 million or $6 million this year and that the plant is only at 40 per cent generating capacity so it isn’t making any revenue.

Marsh says the plant produced 400,000 tonnes of CO2 over the past year, well below its capacity to produce one million tonnes.

He also says the utility is trying to get some of the $12 million back from the company that was responsible for the construction delays.

News Talk Radio has previously reported on the dispute SaskPower was dealing with, with construction companies on the project, and a $37.8 million lien placed on the property.