SaskPower spending more to capture carbon than expected

The cost of capturing carbon at Boundary Dam in Saskatchewan continues to rise, but SaskPower says it is also making more money selling CO2 this year.

Company president Mike Marsh says higher costs offset by millions in CO2 sales

SaskPower says it continues to refine its carbon capture and storage unit at Boundary Dam in Estevan. (CBC)

The Opposition NDP says costs continue to rise at SaskPower's Boundary Dam carbon capture and storage facility.

"The only thing that's in this for the people of Saskatchewan is the right to pay the bills," said SaskPower critic Cathy Sproule, after questioning the company's president in a legislative committee this week.

"We have whole new costs coming out of the operational side of the CCS [carbon capture and storage] plant," Sproule said. "Four or fives times higher than was expected in terms of the solution they use to clean the carbon."

The NDP's critic for SaskPower, Cathy Sproule, says the cost of carbon capture and storage continues to rise and customers are footing the bill. (Mike Zartler/CBC)

SaskPower president Mike Marsh admits the cost of amine, an ammonia derivative used to clean particles of carbon dioxide from exhaust, is much higher than anticipated because it is degrading more quickly than expected.

He says if the company knew exactly why that was happening, it would fix the problem. But in the meantime, he said, "we have to clean it up, regenerate it or we have to replace a portion of it, and we're just having to do that more often that we anticipated".

The cost of amine was initially budgeted at about $5 million year, but Marsh expects this year it may be as high as $20 million.

SaskPower is also continuing to pay some money in penalties to Cenovus, the company with a contract to buy CO2 from Boundary Dam.

So far this year, SaskPower has paid $1.2 million in "shortfall payments" to Cenovus for failing to deliver carbon dioxide when requested.

SaskPower's president, Mike Marsh, says with cleaner electricity comes higher costs. (Mike Zartler/CBC)

Marsh said it would work the same way in reverse, if Cenovus could not use the CO2 provided by SaskPower, although he acknowledges that has never happened.

He said the payments to Cenovus for under-performance are more than offset by the money SaskPower is making on CO2.

Marsh says he expects the net payment from Cenovus to SaskPower this year to be $16 million.

He said SaskPower continues to refine its carbon capture and storage practices.

Marsh said the company will make a decision on going ahead with further CCS projects on its other units at Boundary Dam by the end of 2017 or early 2018.