Canada to Start First Carbon-Capture Coal Power Plant

Canada is poised to open the first large-scale power plant that will burn coal while cutting carbon emissions by 90 percent, part of an effort to continue the use of fossil fuels without worsening global warming.

SaskPower International Inc., Saskatchewan’s province-owned utility, will officially start the C$1.35 billion ($1.2 billion) Boundary Dam power plant tomorrow, said Tyler Hopson, a spokesman for the company. The 110-megawatt project will cut carbon dioxide emissions by about 1 million metric tons annually, by trapping it before it enters the atmosphere and pumping it underground.

Countries from China to the U.S. are seeking ways to reduce the environmental impact of burning coal for heat and power to take advantage of plentiful supplies of the fuel. Carbon capture and storage, or CCS, while operational in only a handful of countries, is expected to play a key role in meeting growing demand for power without contributing to climate change, according to the International Energy Agency.

“CCS is the only known technology that will enable us to continue to use fossil fuels and also de-carbonize the energy sector,” Maria van der Hoeven, executive director of the Paris-based IEA, said in a statement today. “As fossil fuel consumption is expected to continue for decades, deployment of CCS is essential.”

Earlier attempts to use CCS at coal plants have failed under the weight of high costs. In 2011, American Electric Power Co. shelved plans to add the technology to a power plant in West Virginia, a project estimated to cost $668 million. Southern Co. is building the first large-scale U.S. plant with CCS. It will cost more than twice initial estimates, making it one of the most expensive power plants ever built.

Carbon Price

“Carbon capture and storage technology is still being researched and perfected,” Hopson said in an e-mail. “SaskPower has already learned from our experience at Boundary Dam Power Station and we can safely say that we could build a second carbon capture project on a coal plant for less.”

Some of the carbon dioxide from Boundary Dam near Estevan, Saskatchewan, will be purchased by oil producers and used in enhanced oil recovery or EOR, a technique to boost the amount of fuel recovered from reservoirs. The balance will be stored underground in a sandstone cavern near the power station. Fly ash from the burned coal will be used in concrete.

The development of carbon capture technology has been held back by the failure of major carbon emitters such as the U.S. to put a price on CO2, according to Bloomberg New Energy Finance.

“The opportunities to develop CCS projects vary by market but the only commercial driver, CO2-EOR, remains mainly in the U.S. and to a much smaller extent in Canada and the Middle East,” Cheryl Wilson, Kieron Stopforth and Michael Wilshire, BNEF analysts wrote in an Aug. 20 report.

Depleted Reservoirs

Saskatchewan is home to several crude-producing areas, including the northern section of the Bakken. Companies use CO2 to extract oil from reservoirs previously considered depleted.

The U.S. leads the world in CCS projects, primarily from processing natural gas, according to BNEF. About 23 million metric tons of CO2 is being captured from 13 projects, 10 of which are in the U.S. That figure could rise by 37 million tons to 52 million tons by 2020.

Without broad deployment of carbon capture, more than two-thirds of proven fossil-fuel reserves cannot be developed if the increase in global temperatures is to remain below 2 degrees Celsius (3.6 degrees Fahrenheit), a target endorsed by the nations negotiating a climate deal, according to the IEA.

Reducing emissions at the Saskatchewan plant by 1 million tons annually is the equivalent of taking 250,000 cars off roads in the western Canadian province, SaskPower said. The province, along with neighboring Alberta, is more dependent on power from coal than the rest of Canada, where hydropower is available.

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