The province approved the plans by utility SaskPower to rebuild a coal-fired unit at its Boundary Dam site, capture the CO2 and use it to recover crude oil from nearby oil fields, in a $1.24 billion project, the Toronto Globe and Mail reported. The undertaking will use $240 million in federal government funds.
The CCS unit is expected to generate 100 MW of power and produce about one million tons a year of CO2. SaskPower told the paper that construction will begin immediately, and the unit should begin producing electricity in 2014.
CCS technology still faces major hurdles, with the biggest being high pricing, the Globe and Mail said. It can cost $80 a ton to capture and sequester carbon dioxide at power plants, the paper said. Companies have little incentive to spend that money, since Canada has not put a price on carbon.
But SaskPower president Robert Watson said that the cost of the CCS plant’s electricity will be comparable to that of a new natural gas-powered plant.
The SaskPower plant would not be the region’s first carbon-capture project. Encana Corp. has been using carbon dioxide to help recover oil for the past nine years, at its Weyburn project in south-eastern Saskatchewan. The CO2 comes from a plant in North Dakota, the Globe and Mail said.
Other projects are underway in Alberta, where TransAlta Corp., Capital Power LP and Enbridge are planning a CCS unit at the Keephills 3 generating station, and Royal Dutch Shell is proposing to capture emissions from its Scotford upgrader.