Saskatchewan reaches deal with Ottawa on coal-burning power plants

Saskatchewan and Ottawa have an agreement in place over coal-fired electricity that will give two units at the province's flagship power plant a longer life expectancy.

Equivalency agreement could be official by February or March

SaskPower's Boundary Dam unit 3 has carbon capture and sequestration (CCS) technology, allowing it to run beyond 2030. (SaskPower)

Saskatchewan and Ottawa have an agreement in place over coal-fired electricity that will give two units at the province's flagship power plant a longer life expectancy.

The federal government recently published details of a so-called "equivalency" agreement with the province. 

Without the deal, SaskPower would lose some of its coal-fired power as soon as this year.

"We'd have to shut down Boundary Dam unit 4 and 5 by the end of 2019. So really it would mean that those two units would be shut down by the end of the calendar year," said Dustin Duncan, minister responsible for SaskPower.

'The clock is still ticking on all of our coal-fired electricity generation.' - SaskPower Minister Dustin Duncan

The equivalency agreement allows Boundary Dam 4 to remain open until the end of 2021 and Boundary Dam 5 to the end of 2024. Duncan said both are reaching end of life. 

Duncan said the agreement gives more certainty to the employees working on those two units and coal miners.

"The clock is still ticking on all of our coal-fired electricity generation. The federal regulations, the federal government has mandated a shutdown of any coal-fired units by 2030 unless it has carbon capture sequestration technology attached to it."

Carbon capture needed

Currently, only Boundary Dam 3 has carbon capture and sequestration (CCS) technology. It can run beyond 2030. The coal-fired plants without it would have to be shut down.

Poplar River power station has an expiry of the late 2020s. Shand Power Plant has a retirement date of 2042 but Duncan said the federal regulations would shutter it in 2030, unless it installs carbon capture and sequestration. 

Dustin Duncan says Saskatchewan has bought some time with an "equivalency" deal with Ottawa on coal-fired power plants. (CBC)

"Without CCS on Shand, we are stuck with a stranded asset because of the regulations," Duncan said.

In July 2018, SaskPower publicized it would not convert these two units to use CCS as was done at unit 3 of the coal plant for $1.5 billion. 

Last September, SaskPower CEO Mike Marsh said the power corp was "leaving the door open" for potentially expanding CCS to additional plants besides Shand, such as two units at Poplar River and Boundary Dam Unit 6.

As of 2016, 40 per cent of the province's electricity came from coal. 

Sask. NDP leader Ryan Meili said that has to change. 

"We need to phase out coal and move to a cleaner form of producing electricity in the province," he said, adding coal is the "dirtiest way" to produce electricity.

What's the plan for a couple of years from now? Rather than waiting until the last minute to actually see people stranded and unemployed.- NDP leader Ryan Meili

However, Meili said there needs to be a discussion with communities like Coronach and Estevan — which rely on these plants for employment — about future jobs and investments in renewable energy.

"Were I in the position of the government, I would be having those conversations right now," he said.

"What's the plan for a couple of years from now? Rather than waiting until the last minute to actually see people stranded and unemployed." 

NDP leader Ryan Meili says the provincial government needs to start discussions with communities like Coronach and Estevan about future jobs and investments in renewable energy.

Under the agreement, Saskatchewan commits to having at least 40 per cent of the province's electricity generation capacity be from non-emitting energy sources by 2030. As of now, the province is at about 25 per cent.

Here are the targets for Saskatchewan of non-emitting energy sources in percentage by 2030:

  • 26 - 30 by 2021.
  • 30 - 34 by 2024.
  • 34 - 40 by 2027.
  • 40 - 50 by 2030.

The agreement is in the 60 day period of public comment and if there are no changes it could be completed by March.

with files from Kevin O'Connor and Olivier Daoust

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