The federal government is leaving Saskatchewan with nowhere to turn when it comes to baseload power generation. First coal, now natural gas, are on the outs, just as we are turning to natural gas as the solution to coal.
A little over a decade ago, I moved to coal town, Saskatchewan, also known as Estevan. The future was bright, not only due to Bakken oil boom which was underway, and $100+ oil, but the fact the federal government had recently announced a $240 million contribution to the carbon capture and storage project at Boundary Dam.
That project was meant to make 鈥渃lean coal鈥� acceptable in a world where carbon dioxide emissions were the devil. It would cut the emissions of the associated generating unit up to 90 per cent, give or take, depending on how high they turn it up.
Then we saw regulations saying that any current coal-fired coal generating unit in the country, upon turning 50 years old, needed to be either retired or replaced with a carbon capture system that reduced its emissions to that (or below) a combined cycle natural gas-fired power plant. (Remember this point, it鈥檚 key, going forward).
Unfortunately, no other coal-fired power generator in Canada, including SaskPower, decided to implement carbon capture and storage on any other unit in the country, despite the fact that, now, five years later, they鈥檝e pretty much figured out the bugs of carbon capture. The current thinking is they can build the next one for 67 per cent less, per tonne, compared to Boundary Dam Unit 3, if implemented at Shand Power Station.
Boundary Dam Units 4 and 5 will be shut down, despite this.
The federal Conservative government brought in the 50-year rule. The federal Liberal government brought in new regulations saying all conventional coal-fired power generation (without carbon capture and storage), must shut down by 2030 (remember that date, too.) So we, here in Saskatchewan, and in Alberta, must do something in a big way to replace our reliance on coal for baseload power, and get it done in what is now 10.5 years.
To this end, SaskPower鈥檚 president and CEO Mike Marsh has been talking about the economics of natural gas, whose prices have been extremely low during the intervening decade. It makes it really hard to go forward with new coal investment when natural gas is so price competitive. Indeed, in recent years, there are times in various places on the continent where gas is, for brief times, actually negatively priced. As in, the producer had to pay someone to take it. That鈥檚 beyond free.
A little under a decade ago, Northland Power built a $700 million combined cycle natural gas plant at North Battleford that generates 260 megawatts for SaskPower. The Crown corporation will soon be in the process of firing up operation its 350 megawatt Chinook Power Station at Swift Current, costing for $680 million. These plants went up incredibly quick and easy, compared to almost any other alternative source of baseload power, be it coal, hydro or nuclear. It鈥檚 easy to see why the announced Moose Jaw plant is next on the horizon. I would expect the future could see a plant just outside, Regina, and another in northeast Saskatchewan, too. As long as you are close to a pipeline and a bit of water, they鈥檙e easy-peasy, and with about half the emissions from coal.
But what is happening now? The federal Liberal government is implementing regulations, initially gazetted Dec. 12, 2018, that says new natural gas-fired combined cycle plants that fire up after 2021 will be subject to the carbon tax after 2030.
Wait, what?
Wasn鈥檛 combined cycle natural gas supposed to be the better alternative to coal?
And let鈥檚 be real here: the 2021 date might as well be now. It takes several years to design and build a plant. If a plant has not already scratched dirt before today, there鈥檚 no way in hell it will be ready before a 2021 deadline. That effectively means that all combined cycle natural gas plants, going forward, are subject to the carbon tax. The ever-increasing carbon tax. Or, as Premier Scott Moe likes to quote his SaskPower Minister Dustin Duncan, 鈥淎 Justin Trudeau, Ralph Goodale, Liberal Party of Canada, job-killing, soul-sucking, unconstitutional, supported by the Saskatchewan NDP carbon tax!鈥�
Saskatchewan has precious little left in the ability to build new, major hydro plants. To make hydro power, you need a.) elevation, b.) lots of water, c.) all the above. Saskatchewan has d.) none of the above.
If we decided, today, to build a large scale, two-unit nuclear power plant at 1,000 megawatts each, there is no way on earth they would be complete and generating by 2030. It would be easier to hook up to Marvin the Martian鈥檚 flying saucer鈥檚 Illudium Q-36 explosive space modulator than get a nuke plant up in that time. And even then, would any of these projects, either nuclear power or space modulators, be able to get through a Bill C-69 impact assessment before my 12-year-old son is a senior citizen?
So what, pray tell, are we supposed to use for baseload power generation in Saskatchewan after 2030? Is this the federal government鈥檚 way of forcing us to buy large scale hydro power from Manitoba? If so, will that part of, oh, I don鈥檛 know, a national energy corridor? What alternative will we have?
Better herd up your unicorns and start feeding them navy beans, because the only way we鈥檙e going to be able to power this province without incurring mammoth carbon taxation will be with unicorn farts, by the gigawatt.
Brian Zinchuk is editor of Pipeline News. He can be reached at [email protected].
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