Bob Burton

SaskPower’s flagship coal-fired Boundary Dam Carbon Capture and Storage (CCS) plant in Canada is in deep, deep trouble.

The plant doesn’t work as planned, is losing lots of money and publicly-owned utility SaskPower is mired in legal claims and counter-claims.

To make matters worse SaskPower and Saskatchewan Premier Brad Wall claimed that the US$1 billion Boundary Dam plant was operating as planned. “CCS performance data exceeding expectations,” a SaskPower media release from February 2015 proclaimed.

Leaked internal SaskPower documents, made public over the last week by the opposition New Democratic Party, reveal the plant is plagued by major technical problems, causing it to be frequently shut down including for long periods.

The technical problems have increased costs with SaskPower launching a US$38 million legal claim against the plant designer and lead construction company SNC Lavalin. Another construction company, AB Western, which built part of the plant, is suing SaskPower for US$29 million in unpaid work with the utility counter-suing claiming that it overpaid for the work done by US$85 million.

With the CCS plant operating at less than half planned capacity, SaskPower paid out over US$9 million in penalty payments in 2014 to Cenovus Energy which contracted to buy the carbon dioxide for use in its Weyburn-Mildale Enhanced Oil Recovery project. SaskPower will be liable for millions more by the end of 2015.

The release of internal documents has not only shed light on the technical and financial problems with the plant but the political deception that has gone with it.

In October 2015 a SaskPower official publicly claimed that the CCS unit was already capable of capturing 90 per cent of the greenhouse gas emissions from the Boundary 110 megawatt coal-fired plant it is attached to. However, an internal chart for the year to September 2015 reveals that the CCS unit has often been shut down entirely.

An internal SaskPower memo dated February 17 2015 stated that the CCS unit had only been operating at 45 per cent of its rated capacity since the October 1 opening. In comments to the media earlier this week SaskPower President and CEO, Mike Marsh referred to the plant running at just 40 per cent of its capacity.

After the problems at the plant were made public, Marsh sought to explain away the discrepancy between the utility’s previous 90 per cent carbon capture claims and its actual performance.

“It is capable of achieving 90 per cent capture when we have all the other pieces of equipment working,” he said.

In addition to the penalties being paid to Cenovus Energy, the under-performance of the CCS units has also stripped SaskPower of revenue from Co2 sales which it originally claimed were essential to make the plant viable.

A little over a year after the Boundary Dam CCS plant opened with much fanfare, the growing financial and political crisis engulfing SaskPower’s project leaves it as just the latest entry on the ever-growing list of CCS debacles.

SaskPower’s media release from the October 2, 2014 opening cited Saskatechewan Economy Minister Bill Boyd boldly proclaiming:

“This project is important because it is applicable to about 95 per cent of the world’s coal plants … As nations develop emission regulations, they will come to us to see how we continue to provide affordable coal power to customers, but in an environmentally sustainable way.”

Perhaps not.

A little over a year later, the hype about the purported environmental benefits and affordability of the Boundary Dam CCS plant have gone up in a puff of green smoke.

Bob Burton is the Hobart-based Editor of CoalWire, a weekly bulletin on global coal industry developments. (You can sign up for it here.) Bob Burton’s Twitter feed is here.

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