Unless something changes, new gazetted regulations may seal the fate of Boundary Dam Units 4 and 5

Ottawa –  There’s nothing really new for Saskatchewan in the new coal-fired power plant regulations that were gazetted on Dec. 12, and that may be the worst news of all.

The executive summary states, “The amendments to the Reduction of Carbon Dioxide Emissions from Coal-fired Generation of Electricity Regulations (the Amendments) will accelerate Canada’s reduction of greenhouse gas (GHG) emissions from electricity generation and help achieve Canada’s domestic and international commitments to reduce overall GHG emissions.

“The Amendments will require all coal-fired electricity generating units to comply with an emissions performance standard of 420 tonnes of carbon dioxide per gigawatt hour of electricity produced (tonns of CO2 /GWh) by 2030, at the latest. This performance standard is designed to phase out conventional coal by 2030.”

To that end, the new regulations refer to coal-fired generating units commissioned after 1974, which would include the two units at Poplar River Power Station and the one unit at Shand Power station and Boundary Dam Unit 6. Each unit must shut down 50 years after commissioning, or Dec. 31, 2029, whichever comes first. Units with carbon capture and storage are excluded.

SaskPower has been asking for an equivalency agreement from the federal government since at least 2012, one which would allow the company to spread the emissions reductions from carbon capture and storage (CCS) projects, like Boundary Dam Unit 3, across its fleet. Current regulations consider individual coal-burning units individually, and require they be shut down or upgraded to CCS after 50 years of operation.

They also indicate that unites commissioned before 1975, which would include Boundary Dam Units 4 and 5, must be shut down by Dec. 31, 2019.

So when the new regulations were formalized (e.g. printed in the Canada Gazette) on Dec. 12, the lack of any mention of an new equivalency agreement meant nothing changed for SaskPower, which still does not have said agreement.

Joel Cherry, spokesperson for SaskPower, responded by email, stating, “We are aware of the amendments to the coal regulations that will end conventional coal in 2029, and we are continuing to work with the Saskatchewan Ministry of Environment, and Environment and Climate Change Canada to finalize an equivalency agreement that could enable some flexibility of operational dates for our coal facilities. We are also aware of proposed federal regulations for new natural gas plants and we are considering these requirements in future natural gas plant designs. There is nothing new in the recently gazetted regulations, it is simply the legislative process to make the previously discussed amendments official.”

A week before the new regulations were gazetted, SaskPower president and CEO Mike Marsh spoke to the Estevan Chamber of Commerce on Dec. 6. When asked when was the last time SaskPower has seen any movement on the equivalency agreement it has sought from the federal government, Marsh responded, “I haven’t 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. And I think it’s 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.

“So 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,” Marsh concluded.

While SaskPower continues to hold out hope that such an agreement would allow it to continue to operate Boundary Dam Units 4 and 5 for a few more years, the gazetted regulations don’t provide indication that will be happening. In the background portion, the regulations referred obliquely to those two units, stating, “Two coal-fired generating units are expected to retire in 2020, another in 2028, and two more in 2030. The remaining unit, with a capacity of 276 megawatts is expected to retire in 2043. Most of the electricity generated by the coal units retiring before 2030 is expected to be replaced by a new natural gas-fired generating unit that would begin operating in 2020. New natural gas capacity is expected to be commissioned in 2029 and 2042 to replace coal-fired units as they retire.”

Nova Scotia got their equivalency agreement

While the gazetted regulations say nothing of an equivalency agreement for Saskatchewan, they have plenty to say for such an agreement with Nova Scotia.

This included, “In 2017, Nova Scotia had eight coal-fired electricity generation units, with a total capacity of 1,247 megawatts. Under the existing regulation, six of these eight units have useful life dates before 2030, but Nova Scotia entered into an equivalency agreement with the federal government, which suspended the application of the Regulations in the province. As a result, seven of the eight units (1,094 megawatts) are expected to operate beyond 2030 in the baseline scenario.

“In 2015, coal-fired units in Nova Scotia accounted for 6.2 per cent (4.9 Mt CO2 equivalent) of all GHG emissions from electric utility generation in Canada.

“As part of the equivalency agreement, Nova Scotia amended its Environment Act in 2013 to include GHG emission caps for electricity utility generation. Total GHG emissions from electricity utility generation are capped at 4.5 megatonnes CO2 equivalent for the year 2030. Under its 2009 Climate Change Action Plan, 2009 Energy Strategy, and 2010 Renewable Electricity Plan, Nova Scotia committed to transitioning from coal to more renewable energy sources. These policies required Nova Scotia Power Inc. to obtain 25 per cent of electricity from renewable energy sources by 2015, and to increase this minimum to 40 per cent by 2020”

They did note, “In November 2016, both governments announced an agreement in principle for a new equivalency on the Amendments in order to help Nova Scotia move directly from coal-fired electricity to renewable sources like wind and hydro. Similarly, in November 2016, the Province of Saskatchewan and the Government of Canada announced an agreement in principle regarding equivalency for the existing Regulations published in 2012 and covering the period from 2015 to 2029.”

Despite that statement, SaskPower’s president’s comments seem to indicate whatever agreement was reached in 2016, it was not enough.

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