Not only are Units 4 and 5 at the Boundary Dam Power Station slated to come offline, possibly as soon as the end of next year, but Unit 6 also has an uncertain future.
After a presentation hosted by the Estevan Chamber of Commerce last week, Lifestyles asked if there was any hope to see carbon capture and storage (CCS) on Boundary Dam Units 4 and 5. SaskPower president and CEO Mike Marsh replied, 鈥淣o.鈥�
鈥淭hat decision was made for primarily economic reasons. Adding carbon capture for facilities nearing their end of life would have required a significant amount of capital. Also, you鈥檙e in a plant, that, while it could be built there, it鈥檚 very congested, which increases the cost as well, because of the congestion on the back side of that plant.
鈥淏ut primarily, the units were at the end of their life, and the economics were not there.
鈥淩emember, when we made the decision on BD3 (Unit 3 at Boundary Dam), the price of natural gas versus coal with carbon capture, the long-term price per megawatt, they were in the same ballpark. Not any more. Gas has continued to come down, and coal, with carbon capture, because of the additional capital cost on the plant, plus the additional operating cost, the amine technology that you鈥檙e well aware we鈥檝e been wrestling with, but we continue to operate.
鈥淲hen the plant operates well, it operates well. But it is more expensive than we actually figured it was going to be. And we鈥檝e stated that many times.鈥�
Asked about an analogy of fixing a 50-year-old car or buying a new one, he said, 鈥淟et鈥檚 put it this way. If you have a 鈥�67 Buick that you have to fix, but you can now buy a Volkswagen for a quarter of the cost you could have bought it for before, and it still gets you from A to B, you鈥檙e looking at the new one.
鈥淭hat鈥檚 why the efficiency of combined cycle (natural gas) technology, the low cost of gas, makes the life cycle costs. And that鈥檚 what we look at. It鈥檚 not just the capital costs. It鈥檚 not just the fuel costs. You look at it over the life of that plant.
鈥淎nd you look at, okay, on a dollar per megawatt, can I generate, out of that facility, for less than I can out of this facility? And that helps keep our rates low.鈥�
Does the same logic apply to Unit 6?
鈥淎bsolutely. It applies to every major generation decision that we make. We have to look at the option, the alternative, the risk and the future that may result in a regulatory change, for example. It鈥檚 becoming more of an issue.鈥�
Saskatchewan has been asking for an equivalency agreement since at least 2012, and in earnest since 2016. Asked when was the last time SaskPower has seen any movement on the equivalency agreement it has sought from the federal government, Marsh responded, 鈥淚 haven鈥檛 seen any movement. We do not have an equivalency agreement between the province and the federal government. I want to continue to be optimistic that we will be in a position to say something positive in the near term. We still have a bit of time left before that option runs out.
鈥淎nd I think it鈥檚 important for us, as a utility, to be able to run 4 and 5 and extract the value out of those facilities before they reach their natural date.
鈥淪o I continue to be optimistic. And I want to remain hopeful that we will be in that position so that we can operate coal, longer,鈥� Marsh concluded.
听
听
