SaskPower’s Case for Carbon Capture and Storage

By Michael Monea
President, Carbon Capture & Storage Initiatives, SaskPower

Nearly a year has passed since SaskPower had the pleasure of inaugurating the Boundary Dam Carbon Capture and Storage (CCS) project. As the world’s first commercial-scale post-combustion CCS project at a coal-fired power plant, Boundary Dam represents a major step forward for environmentally sustainable coal power and for the future of the power and oil industries.

The commissioning of the Boundary Dam CCS project in October 2014

The commissioning of the Boundary Dam CCS project in October 2014

Bringing the first-of-a-kind project to fruition has required a sustained commitment. Following extensive analysis, feasibility studies, community outreach, and regulatory evaluation, the Boundary Dam project was built over the course of three years. Approximately 1700 contractors and employees of SaskPower worked continuously for a total of nearly five million man-hours. CCS at Boundary Dam Power Station is now an important part of SaskPower’s electricity generation fleet and of Saskatchewan’s proven track record in technological innovation.

THE VALUE OF DIVERSIFIED GENERATION

Currently, about 44% of SaskPower’s electricity comes from coal. Coal is reliable and the costs are stable. Centuries’ worth of coal reserves lie under Saskatchewan and are an important part of the province’s economy. Thus, coal is an attractive energy source for SaskPower as we have a plentiful supply near our three coal-fired power stations. The coal we burn is western Canadian lignite, which has a lower heating value and lower percentage of sulfur.

New Canadian greenhouse gas regulations came into effect on 1 July 2015. Essentially, the regulations require existing and new facilities to operate with the same emissions as natural gas-fired plants: 420 tonnes CO2/GWh. Prior to modification, Boundary Dam’s Unit #3 emitted 1110 tonnes CO2/GWh, but at 90% capture the plant will, at full capacity, operate at 140 tonnes CO2/GWh—essentially four times less carbon emissions than a natural gas facility.

One of the most common questions we hear is, “Why wouldn’t you invest in renewables like wind and solar, rather than CCS?” We know our customers are interested in renewables, and we’re interested too. About 25% of our current available capacity comes from renewable sources, and that number is growing. For example, our goal is to have 10% of capacity via wind by 2020 and about 20% by 2030.

However, our renewable capacity will need baseload generation to ensure reliability—our customers expect the power to be there when they need it. The intermittent nature of wind and the fact that it can’t currently be stored economically means that it needs to be balanced with other power sources. In essence, we need electricity sources we can control, such as gas and coal that are available 24/7 and are not impacted by weather. CCS makes possible low-emission baseload power to support our renewable assets.

Similar to financial planning, our best option for power generation is a balanced portfolio. That gives us the best opportunity to maintain competitive electricity rates and continue to provide reliable and sustainable electricity to our customers. It’s important we don’t rely too heavily on one source, but rather maintain a balance that will serve us today as well as over the long term. CCS is part of maintaining that balance.

SaskPower is working to maintain a balanced portfolio of environmental stewardship projects.

SaskPower is working to maintain a balanced portfolio of environmental stewardship projects.

PROJECT ECONOMICS

When we began evaluating CCS, we compared it against the next best alternative: natural gas. Assumptions were made on the initial investment required, current borrowing rates, internal rate of return, and the cost of coal and natural gas to determine if CCS could be competitive. The true benefit came from our province’s abundance of coal, a fuel source with an affordable, stable price. Natural gas prices can fluctuate dramatically, making the return on investment less certain.

The business case we put forward also considered the ability to secure purchasers for Boundary Dam’s by-products: CO2,fly ash, and sulfuric acid. SaskPower was able to secure contracts for all three by-products.

SaskPower has a 10-year contract in place for the sale of CO2, Boundary Dam’s main by-product. It will be used for enhanced oil recovery (CO2-EOR) in nearby oilfields. CO2-EOR production has been used in Saskatchewan since the early 2000s. EOR has a significant impact on oil production, labor, community economics, and provincial royalties in Saskatchewan. Based on one oil industry example, the benefits from CO2-EOR using CO2 from Boundary Dam are estimated to be

  • CAD$850 million capital investment over 10–15 years
  • 20–30-year project life
  • 47 million barrels incremental oil recovery
  • CAD$481 million (est.) in crown (government) royalties and production
  • CAD$241 million in corporate income taxes
  • CAD$65.7 million in resource surcharge
  • 4850 person-years of direct employment

Thus, the application of CO2-EOR in Saskatchewan has not only prolonged the life of oilfields in the province, but secured economic benefits well into the future.

The other by-products are also important to the CCS business case. Fly ash is used in the concrete industry, and SaskPower sells 100% of the fly ash produced by all the units at Boundary Dam Power Station.

All 10,800 tonnes of sulfur dioxide produced at Boundary Dam Unit #3 will be captured and converted to 96% pure sulfuric acid (about 1.5 truckloads per day). This will be sold primarily for industrial purposes, including fertilizer, as well as to meet SaskPower’s internal needs.

While some of these by-products are relatively small contributors to the business case, they are important environmentally.

As with any first-of-a-kind project, ours represents a sizeable investment (approximately CAD$1.467 billion), and it paves the way for improvement and cost reductions through economies of scale and efficiency gains on future projects. In fact, we’ve already identified savings of 20–30% on any future project based on what’s been learned at Boundary Dam. Thus, CCS costs will continue to decrease.

CO2 STORAGE

Storage is a critical component in the CCS process. SaskPower’s Carbon Storage and Research Centre hosts Aquistore, an independent research and monitoring project that will further demonstrate that storing CO2 deep underground is a safe, workable solution to reduce greenhouse gas emissions.

The geological storage of CO2 will take place 3.4 km (2.1 miles) deep in a layer of brine-filled sandstone. Aquistore is managed by the Petroleum Technology Research Centre (PTRC), which will conduct comprehensive measurement, monitoring, and verification prior to injection, during injection, and throughout the storage project. Aquistore will receive approximately 350,000 tonnes of CO2 over the course of the project.

Our province already has experience with CO2 storage, due to our Weyburn-Midale storage project (also managed by the PTRC) in southeast Saskatchewan. Under that project, approximately 25 million tonnes of CO2 have been successfully stored and monitored.

POWERING THE FUTURE

Now that CCS at Boundary Dam has been operational for nearly a year, we are pleased to see that the process is working even more efficiently than expected. We’ve already captured more than 300,000 tonnes of CO2 at the facility, compressed it, and sent it to nearby oilfields for CO2-EOR.

SaskPower’s Boundary Dam Power Plant

SaskPower’s Boundary Dam Power Plant

To date we’ve been fine-tuning the CO2 capture plant. Once it reaches full capacity in its second year of operation, the plant will capture up to one million tonnes of CO2 annually. At a capture rate of 90% the results are equivalent to taking approximately 250,000 vehicles off the roads every year, well beyond many comparable projects around the world.

The power plant unit has performed more efficiently than expected and may produce closer to 120 MW, compared to the design value of 110 MW, once running at full capacity. Unit #3 of Boundary Dam Power Station is producing power for 100,000 homes and businesses, while emitting about four times less CO2 than a comparable natural gas plant.

Boundary Dam is not SaskPower’s only CCS investment. In June, we launched the Carbon Capture Test Facility (CCTF) at Shand Power Station (also near Estevan). This first-of-its-kind project will offer a unique platform to allow international partners to test and develop new technologies in carbon capture. This project is a joint venture with Mitsubishi Hitachi Power Systems, who will be the first to test and perfect its post-combustion process for market. Once this is complete, other companies will have the opportunity to access the facility.

Designed to accommodate a wide range of processes, CCTF initially will provide an evaluation of the energy demand, long-term stability, collection efficiency, operation, maintenance requirements, and reliability of amine-based, post-combustion technologies.

As we continue to operate our CCS projects and gain unique knowledge, we welcome governments, organizations, and industries to learn about our experiences. We also offer a virtual tour at saskpowerccs.com/tour for those who can’t visit in person to provide in-depth information on our process and viewing of the critical components of the project.

In addition to offering tours, SaskPower has formed a global consortium to share our knowledge with the private sector, government institutions, universities, and nonprofit organizations that want to learn more about our expertise in CCS. The consortium will share information we have gathered on significant cost reductions, training, construction, and commissioning, to name a few. Information can be found at saskpowerccs.com/consortium

SaskPower is committed to sharing knowledge gained constructing and operating Boundary Dam.

SaskPower is committed to sharing knowledge gained constructing and operating Boundary Dam.

As global power production increases and other countries look to develop coal power, the world is looking to us to see how they can do so in a more environmentally sustainable way. We are extremely proud of what we have achieved, and look forward to the opportunity to share our success.

 

The content in Cornerstone does not necessarily reflect the views of the World Coal Association or its members.
E-MAIL ALERTS
Receive e-mail alerts when the new issue comes online!
Click here to opt-in or opt-out.

PRINT SUBSCRIPTION
Receive the new edition in print!
Click here to opt-in or opt-out.

One thought on “SaskPower’s Case for Carbon Capture and Storage

  1. Pingback: Saskatchewan’s Boundary Dam carbon capture project is less environmental than … |

Leave a Reply