Saskatchewan Power Station

An Expert's View about Energy in Canada

Last updated: 31 Aug 2011

Summary

SaskPower, the Saskatchewan power utility, a crown corporation, commenced work on the Boundary Dam Power Station earlier this month, following provincial government approval for the project. The plan includes a retrofit for the station’s unit 3 (BD3) as well as the addition of Carbon Capture and Storage technology. The updated BD3 unit, scheduled to be fully operational by 2015, will eliminate 1 million tons of carbon emissions, capturing 90% of CO2 emissions and 100% of SO2 emissions. These will be used for Enhanced Oil Recovery (EOR) and the production of sulfuric acid, respectively. There has been large-scale investment in this project from the provincial and federal governments, SaskPower and private firms. The retrofit operation is being allotted $354 Million and the CCS system will be receiving $1.24Billion. The work currently underway is focused on the retrofit, more specifically the replacement of the unit’s boiler. The CCS work is delayed, pending Canadian Government emissions legislation, expected to be issued sometime during 2011.

Market Insight

Saskatchewan obtains a substantial majority of its energy from the burning of fossil fuels. In 2010, 43% of its energy-generating capacity came from coal and 31% from gas. There is an estimated 300-year supply of coal available in the province. The extraction and burning of coal represents a large section of the economy and employment of Saskatchewan. Coal-based power generation is expected to continue for a long time in Saskatchewan with ongoing technology upgrades for improved environmental impact. With impending emissions control regulations from the Government of Canada, this industry will have to undergo some far-reaching changes to survive. Saskatchewan is among the worst emitters in North America. The Boundary Dam project is the first commercial CCS project in Canada, and its success will pave the way for similar projects in the prairies. CCS has the potential to allow fossil fuel energy generation to remain economically viable under the new emissions regulations.

Last year, the province’s imports in this sector (HS 85), was valued at $ 491.8 Million of which U.S. export represented 82%. The level of investment in this project is extensive, but also indicative of future projects if emissions legislation proceeds to get stricter and if the BD3 project is a success. Boundary Dam has 5 additional aging units scheduled for possible “significant capital injection” within the next 12 years.

Opportunities for U.S. Companies

The U.S. exporters have further interesting opportunities in Saskatchewan, particularly in the Electrical and Power Generation sectors. The Boundary Dam Station as of July 2011 opens opportunities for boilers and turbine components and accessories, compressors and hydraulic machineries, machinery and tools, industrial equipment, electrical and electronics equipment and materials, and fabricated materials. The above opportunities and others from SaskPower can be found on the MERX system. Construction is in its initial phases, and abundant further opportunities are anticipated as the project progresses, especially when work begins on the CCS portion.

A general contractor has been hired for Engineering, Construction and Procurement for the CCS project. Hitachi will provide the steam turbine. When the CCS portion begins, there will be opportunities to supply these companies with general and specialty machinery and tools, Industrial equipment, and other materials which they will require in this project.

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Posted: 31 August 2011, last updated 31 August 2011

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