Despite years of touting the technology and sinking more than $1 billion into the project, the province says it will not be expanding the carbon capture project to two other units at Boundary Dam Power Station.
The province announced the decision Monday as part of its annual report — units four and five will not be retrofitted to use carbon capture technology.
“Simply, the business case is not there to proceed with CCS (carbon capture and storage) on these particular units,” Duncan explained.
He said there were many factors that went into this decision — most significantly is the historically low price of natural gas right now.
“Certainly, the outlook in the coming decades, pretty indicative that natural gas prices will likely remain low for a sustained period of time.”
Duncan also explained the two units are smaller and are coming close to the end of their lives. If a deal can be struck with the federal government, they could run until 2021 for unit four and 2024 for unit five. If a deal can’t be made, both units will have to be shut down by the end of 2019 due to federal regulations.
Duncan insisted this does not mean the province is giving up on carbon capture technology.
“We have invested more than any other jurisdiction in Canada, I would say beyond Canada, in CCS technology so I think we have demonstrated a significant amount of leadership in CCS. The IPCC itself indicated that if we are to achieve a global two-degree reduction in global temperatures, then CCS has to be a part of the solution.”
Duncan was referencing the Intergovernmental Panel on Climate Change, and the widely agreed to international goal of keeping global warming below 2C above pre-industrial temperatures.
The province is preparing a feasibility study for carbon capture at the Shand coal-fired power station in Estevan. However, Duncan said a decision on that likely wouldn’t have to be made until mid-way through the next decade.
“These are long-term generation issues that we have to make decisions on, and I think the individual circumstances around those time frames will dictate the decisions. It would be premature to make a decision on Shand, which doesn’t have a retirement date until 2029, sitting here in 2018.”
SaskPower Annual Report
SaskPower had a big year in 2017-18, managing to meet the second-highest year-over-year power demand increase in the past decade. Demand went up 5.4 per cent, according to the annual report.
In the past fiscal year, the Crown corporation made $146 million in net income, up significantly from $56 million in the previous year. The company said it was primarily because of lower natural gas rates, the increase in demand and recent rate increases.
SaskPower spent about $996 million in capital projects, in line with its prediction of spending about $1 billion a year.
While the company’s overall debt went up in the fiscal year, the debt ratio went down to 74.9 per cent.