Canada to Start First Carbon-Capture Coal Power Plant

Oct. 1 (Bloomberg) — 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.

To contact the reporter on this story:
Jeremy van Loon in Calgary at
jvanloon@bloomberg.net

To contact the editors responsible for this story:
Reed Landberg at
landberg@bloomberg.net
Jim Efstathiou Jr., Tina Davis

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