This week the premiers will have gathered in Quebec City for a climate change summit. At the table, Saskatchewan Premier Brad Wall will get to play his ace in the hole, the Boundary Dam Integrated Carbon Capture and Storage Project, or BD3 for short.
No other province has gone so far as to fund and implement an actual commercial scale clean coal project.
Ontario shut down its coal plants, a change with more impact, but ended up with a morass of fees in tariffs for solar and wind power that are totally unsustainable. Somewhere along the way the Ontario government forgot one of the prime reasons it has had such a strong manufacturing base in the past was its low electricity rates.
But what are other provinces doing? British Columbia is building another massive dam on the Peace River that will ironically be in the perfect location to supply power to the massive natural gas operations in the immediate area.
Quebec has enticed Ontario to join its cap-and-trade scheme. If it goes as well as it’s green energy scheme, we should expect a flood of economic migrants from the Centre of the Universe coming our way in a few years.
Boundary Dam Unit 3 is still very much in its early days. Apparently it works. It did go over budget, coming in at $1.467 billion instead of $1.24 billion as planned (although that’s still pretty close for a project that size). It’s going to take a few years to evaluate if this is indeed the way to go in the future.
Saskatchewan is also in a unique circumstance, where the carbon dioxide captured can be used to rejuvenate old oilfields and markedly increase oil production for decades. In this situation, not only does the government (and people) of Saskatchewan own the power utility, it also owns most of the mineral rights for the oil and coal. This is not at all common, and that special combination is likely not repeatable anywhere else in Canada. Most power utilities have been privatized. Only a few areas have oil and coal in relative proximity. Actually, probably only Saskatchewan and Alberta have that combination.
Then we have to realize that the $1.467 billion was not a rebuild of an entire plant, plus a carbon capture facility for it, but rather just a sliver of it. There are still Units 4, 5 and a much larger 6 to go. While SaskPower is confident the cost will be much lower on subsequent carbon capture projects, few industrial projects in this world get substantially cheaper as time goes on. If they do the remaining units, we could be looking at a total expenditure of perhaps $6 billion. That’s about half way to what a new nuclear plant cost a few years ago, and it emits zero carbon emissions.
On that front, Canada has been on the decline of nuclear power for some time now. Ontario is nowhere near its former nuclear capacity. Quebec shut down its Gentilly reactor in 2012. It’s doubtful any new plants will be built in this country in the foreseeable future. Mike Monea, president Carbon Capture & Storage Initiatives with SaskPower told me a few months ago, “We just don’t have an opportunity for nuclear now. That’s so far away, the cost is so great, with permitting and construction, it’s a long term project.”
So where will all these carbon dioxide cuts come from? Power generation is the elephant in the room and, without addressing it, the premiers’ efforts will be for naught. Will they co-operate on spending billions on smart grid upgrades? Are we going to see more wind development? Will natural gas plants be built as an interim solution, and will they be needed for when the wind does not blow?
Those are just some of the tough questions facing the premiers this week. It will be interesting to see what they come up with.
— Brian Zinchuk is editor of Pipeline News. He can be reached at email@example.com.