For the first time ever, a large-scale, coal-fired power plant is capturing carbon dioxide to keep it from being released into the atmosphere – a milestone for a technology critical to addressing climate change.

Canadian electric utility SaskPower has switched on unit 3 at its Boundary Dam power plant, about 10 miles from the North Dakota border, and will hold an official grand opening Oct. 2. Following a $1.2 billion retrofit, the 46-year-old, 110-megawatt coal unit is now on course toward capturing 90 percent of its carbon emissions. Other upgrades reduce nitrous oxide emissions and capture 100 percent of the unit’s sulfur dioxide emissions.

Numerous commercial-scale carbon capture and storage (CCS) technology projects have been deployed in the industrial sector. In the power sector, demonstration-scale projects have been deployed, but this is the first commercial-scale project.

We will need to construct hundreds of such projects (along with other zero- and lower-emitting technologies) if greenhouse gas emissions are to be reduced to levels that avoid the worst effects of climate change. According to the International Energy Agency, more than 440 terawatt-hours (TWh) of CCS must be generated between 2020 and 2035 to give us a chance of limiting global temperature rise to 2 degrees Celsius (3.6 degrees Fahrenheit) above pre-industrial levels. To get a sense of that scale, SaskPower’s unit 3 can produce up to 1 TWh of electricity per year.

The Boundary Dam project is important not just because it’s the first of its kind, but because it demonstrates a way to help make carbon capture technology economically viable — by turning unwanted pollutants into valuable commodities. SaskPower has agreed to transport and sell its captured carbon dioxide (CO2) to an oilfield operated by Cenovus for use in enhanced oil recovery (EOR) operations. The captured CO2 helps coax additional production from declining oil fields and results in the permanent storage of the CO2 underground. (In addition, captured sulfur dioxide emissions will be used to produce 50 tons per day of sulfuric acid for industrial customers, and SaskPower will sell the plant’s coal combustion residuals, also known as coal ash, for use in construction products like drywall and concrete.)

Selling captured carbon dioxide for use in enhanced oil recovery provides a vital revenue stream for CCS projects, helping offset high investment costs, particularly for first-movers like SaskPower. In fact, most existing or planned carbon capture projects in the world today are taking advantage of CO2-EOR. In the process, they are helping to advance the technology and demonstrate its broader potential in curbing carbon emissions.

Other factors also came together to make this project work, including the fact that SaskPower has an abundant source of inexpensive lignite coal near the power plant, and if need be, SaskPower can securely store its CO2 emissions in a nearby, deep-underground saline formation. Available storage will be critical for all CCS projects in the near-term, especially if an EOR option is not available.

SaskPower refurbished the coal unit at a cost of $300 million. Building the capture facility was projected to cost around $790 million, of which the Canadian government contributed $220 million.

When I visited the plant earlier this year, SaskPower acknowledged that the capture facility had been over-engineered to ensure it would deliver on its targeted 90 percent capture rate. Right-sizing future capture facilities and applying lessons learned during construction of this facility mean the costs for similar projects will come down over time, which is critical to wider deployment and lower global CO2 emissions.

That’s important because coal-fired electricity generation is not going away anytime soon. The U.S. Environmental Protection Agency, in an analysis of its recently proposed carbon limits for existing power plants, projects coal will still supply more than 30 percent of U.S electricity in 2030, down only 9 percentage points from today’s levels. Meanwhile, coal use in the developing world is soaring. According to the U.S. Energy Information Administration’s International Energy Outlook, coal consumption in developing countries, led by China and India, is expected to increase 70 percent by 2040.

With more than 2,300 coal-fired power plants around the world, deployment of post-combustion carbon capture and storage technology like what’s in use at the Boundary Dam power plant is an important way to reduce greenhouse gases and a significant step in the right direction.