Boundary Dam Integrated Carbon Capture & Storage Demonstration Project

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Boundary Dam Integrated Carbon Capture & Storage Demonstration Project is a 110 megawatt (MW) lignite-fired power station owned and operated by SaskPower, a power utility owned by the Saskatchewan provincial government. The CCS plant is located at SaskPower's Boundary Dam Power Station at Estevan, Saskatchewan.

The rebuilt Unit 3 with CCS was officially commissioned in October 2014.

Background

The original 139 MW unit 3 at the Boundary Dam Power Station was commissioned in 1970. It was scheduled to be shut down in 2013 after 45 years of service.

Shand CCS investigations

In 2005 SaskPower began considering in detail its options for future power generation. With a high probability of restrictions on carbon dioxide emissions or a carbon price, SaskPower began to consider its options for CCS. Initially the utility looked at options for a CCS unit at the existing SaskPower 279 megawatt Shand coal-fired power station near Estevan. SakPower executives were worried that carbon dioxide emissions might be coming sooner than they had anticipated and felt that they needed to "demonstrate feasibility of retrofit study (sooner than later)". So they investigated the costs and feasibility of retrofitting a CCS units onto the existing Shand power station.

However, the initial results weren't promising. They found that while they could meet the anticipated carbon emissions regulations, bolting a CCS unit onto the plant would consumer 40% of the power it produced. This option, SaskPower wrote, was a "very expensive option for a unit with 20 years remaining."

So they then turned to consider the option of building a new coal unit with a CCS plant at the site of the Shand power station. From SaskPower's point of view the Shand site had water for cooling, proximity to better coal, was near potential oil fields for 'enhanced oil recovery'. Of the two main CCS technology options - a post-combustion plant or an oxyfuel plant - they felt that that oxyfuel option was better. It had the advantages, they wrote, of "lower cost and lower GHG emissions". However, the cost estimates were only very preliminary.

After more detailed investigations, they concluded the project was not worth proceeding with. In a presentation SaksPower noted that the "technical complexity much greater than anticipated when initially selected." While the plant was designed to produce 300 MW of power, it would have a "40% parasitic load" to runs the CCS plant. Not only would it produce way less power available for export to the grid, but the cost estimates supplied by contractors were 2-3 time higher than their earlier budget estimates. The proposed plant, they concluded, was "too inefficient and expensive" and there was "too much risk."

There was one other major problem. While the fact that the proposed plant could "capture three million tonnes of CO2 per year" was a climate mitigation plus if taken at face value, it presented a profound challenge to the economics of the plant. As the economics of the project hinged on earning revenue from the sale of compressed carbon dioxide into oil fields to boost the amount extracted, the local market for Co2 was far far smaller than the volume the plat would provide. As SaskPower described it, the "young market for CO2 could not yet bear three million tonnes of CO2 each year."

And the price tag was prohibitive. While it had originally been estimated that the project would cost C$1.5 billion it was later revealed the proposed Shand 2 plant would have cost C$3.8 billion for a 300 MW plant which would supply only 180 MW of power to the grid. (In comparison, in mid-2008 SaskPower was building a 400 MW combined cycle natural gas plant for C$525 million.)

Boundary Dam CCS investigated

Having ruled out retrofitting CCS to the existing unit at Shand and a new unit as too expensive, SaskPower was left pondering if there was "any viable CCS option." So they turned to the question of whether it would be possible to refurbish an existing plant near the end of its commercial life and retrofit CCS to that.

While the first two units of the Boundary Dam power station were too old, they settled on Unit 3 as the best fit since it was scheduled to retire in 2013 and, in their view, a replacement source of generation would be required. The model SaskPower arrived at was for a 20% subsidy of the cost of the plant and sales of Co2 - plus the use of existing infrastructure - cancelling out the additional up from capital costs of the plant compared to an equivalent capacity gas-fired plant without CCS. (In their presentation, SaskPower put no hard numbers on the axes of the chart and pie graphs).

In March 2008 the federal government committed C$240 million to SaskPower’s proposed CCS plant. However, shortly afterwards the deputy manager of the project, Doug Daverne told a mining industry conference that it was crucial to get financial support for the project from private industry. "We don’t think (the carbon capture and sequestration project) is economic right now unless we can receive some value from the CO2 created for EOR (enhanced oil recovery)," Daverne said.

In December 2010, SaskPower decided to proceed with the refurbishment of Unit 3 but said that it needed more information from the federal government before it decides whether to move ahead with the CCS project, and that it will instead rebuild its aging Unit 3 at the coal-fired Boundary Dam power plant. Refurbishing the 45-year-old unit to extend its life by another 30 years would cost an estimated $354 million.

In April 2011, Saskatchewan approved the $1.24-billion project, which is backed with $240-million from the federal government.

Co2 Sales to Cenovus

In December 2012 SaskPower announced that it had entered into a "long term contract" with oil company Cenovus Energy for the sale of one million tonnes of carbon dioxide a year. “This agreement is a major step toward increasing commercialization of carbon capture and storage. This is confirmation that SaskPower is on the right track, and that carbon capture and storage is a viable option for the continued use of coal for power generation," said SaskPower President and CEO Robert Watson in a media release.

Cenovus, which already sourced Co2 from a coal gasification plant in North Dakota for increasing oil recovery, proposed to construct a 66 kilometre-long pipeline to transport the Co2 from the Boundary Dam power station to its operations at Weyburn.

It was reported in the media that the duration of the contract was for ten years. The price was not disclosed. However in an interview SaskPower president and CEO Robert Watson said the value of the contract was not being disclosed for "competitive reasons." However, he stated that the price of Co2 ranged between $15 to $50 per tonne depending on its potential use. "Probably, to start with, it's at the lower part of the range ... because this is first full-production (CCS) facility," Watson said. Watson said that the sale price lowered the cost of generation from the new plant to approximately the same cost as a gas-fired generation plant. (The sale of one million tonnes a year at approximately C$15 would yield Saskpower approximately C$150 million over the duration of the contract).

Cenovus stated that in late 2012 it was buying 5500 tonnes of Co2 a day from its North Dakota supplier. A spokeswoman for Cenovus, Jessica Wilkinson, said that "to date, we've injected just over 18 million tonnes of CO2 in the reservoir." In 2011, she said, the company injected 4.2 million tonnes of CO2. The Leader-Post reported that "Cenovus currently produces 27,000 barrels of oil per day from the Weyburn EOR project, of which 19,000 barrels a day is incremental production from CO2 injection and 8,000 barrels a day is from conventional production."

A Cenovus publication stated that "global researchers representing over 30 countries estimate that about 30 million tonnes of CO2 will ultimately be stored during the life of the Weyburn enhanced oil recovery project."

These Cenovus figures suggest that after the first ten years, the Weyburn EOR storage capacity will have been exhausted and SaskPower will need to find additional customers if it wants to maintain its revenue stream to contain the costs of the CCS plant.

Leaked documents reveal financial problems

Documents leaked in October 2015 revealed the plant has been shut down for long periods due to technical problems. In addition, the utility was paying millions of dollars in penalty payments to oil company Cenovus Energy for breaches of the contract for the sale of carbon dioxide.

2018: SaskPower calls off future CCS projects

In July 2018, SaskPower and the Saskatchewan government announced they will not be expanding carbon capture and sequestration (CCS) technology on any more coal-fired plants in the near future. Dustin Duncan, the minister responsible for SaskPower and the environment, said there is “simply not a business case” to retrofit Boundary Dam units 4 and 5.

Timeline

• February 2008: Province of Saskatchewan announces SaskPower will proceed with refurbishment of Production Unit 3 at Boundary Dam, including application of a carbon capture system.

• February 2008: The Canadian Government allocates CAN$240 million to the project.

• December 2010: SaskPower formally approves the refurbishment of Production Unit 3 at Boundary Dam.

• January 2011: SaskPower announces that it has chosen Babcock & Wilcox Canada to rebuild the boiler at Boundary Dam Power Station’s Unit 3. SaskPower stated that the boiler contract rebuild and related work was valued at $107 million in the $354 million refurbishment program for Unit 3. The utility stated that it estimated that the rebuilt plant complete with the CCS unit would cost $1.2 billion and "is expected to commence operations in the fall of 2013."

• April 2011: SaskPower formally approves construction of the carbon capture system at Production Unit 3.

• December 2012: SaskPower and Cenovus announce Cenovus will purchase approximately 1 Mtpa of CO2 captured at Production Unit 3 for 10 years.

• October 2014: The Boundary Dam Integrated Carbon Capture and Sequestration Demonstration Project commences operation.

• February 5, 2016: SaskPower announces a C$20 million contribution from BHP to establish a global centre for carbon capture and storage (CCS) knowledge.

• October 31, 2016: SaskPower announces that Boundary Dam CCS project captured 800,000 tonnes of CO2 in 12 months.

• March 12, 2018: SaskPower announces the Boundary Dam CCS plant has captured more than 2 million tonnes of carbon dioxide since Oct. 2014.

Contact details

Website: http://www.saskpowerccs.com/ccs-projects/boundary-dam-carbon-capture-project/carbon-capture-project/

Articles and resources

Related GEM.wiki articles

• Canada and coal
• Carbon Capture and Storage
• Carbon Capture and Storage demonstration projects worldwide
• Carbon Capture and Storage in Canada

External resources

SaskPower media releases and publications

• Doug Daverne, SaskPower, Knowledge is Power: SaskPower CCS Information & Planning Symposium", 2013 SaskPower CCS Symposium, May 20, 2013.
• SaskPower, "CCS performance data exceeding expectations at world-first Boundary Dam Power Station Unit #3", Media Release, February 11, 2015.
• "SaskPower launches Carbon Capture Test Facility", Media Release, June 18, 2015.

Other publications

• "Boundary Dam Integrated Carbon Capture and Sequestration Demonstration Project", Global Carbon Capture and Storage Institute, accessed October 2014.
• "Boundary Dam Fact Sheet: Carbon Dioxide Capture and Storage Project", Carbon Capture and Sequestration Technologies Program at MIT, October 2014.
• Brian Banks and Mark Bigland-Pritchard, SaskPower's Carbon Capture Project: What Risk? What Reward?, Canadian Centre for Policy Alternatives, February 2015.

External articles

• Bob Burton, "Is the Boundary Dam CCS plant in Canada really a success story?", RenewEconomy, October 9, 2014.
• David Roberts, "Turns out the world’s first “clean coal” plant is a backdoor subsidy to oil producers", Grist, March 31, 2015.
• Bob Burton, "BHP Billiton’s Boundary Dam carbon fudge", RenewEconomy, September 21, 2015.
• Bob Burton, "Boundary Dam CCS hype goes up in a puff of green smoke", November 4, 2015.
• Bob Burton, "The fallout from SaskPower’s Boundary Dam CCS debacle", RenewEconomy, Novermber 12, 2015.
• Bob Burton, "Spinning Carbon Capture and Storage as cheaper than renewables", EndCoal, February 26, 2017.