Destroying High Paying Coal Power Jobs in Saskatchewan

Commentary, Climate, Energy, Brian Zinchuk

There was an announcement by SaskPower on Aug. 10 that is very significant, especially for Estevan, one of the last places in Canada burning coal for power.

SaskPower is going to beef up its power transmission interconnect with the U.S. Southwest Power Pool (SPP), from the existing 150 megawatts to 650 megawatts. It’s a connection to 106 utilities across 14 states from North Dakota right down to include the Texas panhandle.

When they need power, and we have power to offer, we sell power into the SPP. And when we need power, we can buy it from the SPP. And for that privilege, we will pay a tariff of $52 million per year. More on that later.

This sort of interconnected grid is really important when it comes to intermittent power sources like wind and solar. At 10:46 a.m., Aug. 10, Alberta’s power grid was producing 188 megawatts out of a theoretical 2,389 megawatts of wind power connected to their grid, a measly 7.9 per cent. And this has happened numerous times this summer.

So what Alberta does, as indicated on the Alberta Electric System Operator website, is draw from its neighbours. Their minute-by-minute report shows their interchange, with negative showing the Alberta grid drawing from its neighbours. In eight months of observing, very, very rarely do I see Alberta supplying power to its neighbours. It is almost always drawing power, from British Columbia, Montana, and to a much lesser extent, Saskatchewan, even as it has shut down all but one of its coal plants.

That interchange, near midnight, was 553 megawatts. I’ve seen it as low as 400s. But more frequently, Alberta is drawing 700 or 800 megawatts from its neighbours.

Alberta is one of the most energy-rich jurisdictions on the entire planet, with oil, natural gas and coal. And it is routinely, almost every single day, drawing on power production from its neighbours to keep its lights on.

And this is what I anticipate will happen in Saskatchewan. Sure, we could send power to North Dakota. But it’s more likely that we will be drawing power from the SPP, nearly all the time.

That 650 megawatts is very, very close to the amount of power Boundary Dam Power Station at Estevan produces, or at least used to produce. Now, Boundary Dam is supposed to only be producing power from Units 3, 5 and 6, as Unit 4 was supposed to be shut down in December. But within weeks of its supposed retirement, it was fired up again. Why? Because SaskPower needed it. On Aug. 4, a former coal miner asked Premier Scott Moe about it at a town hall in Arcola, and Moe confirmed it. So despite federal rules requiring us to shut down our coal for the love of God and the planet, we have not, because most likely we cannot. If we could have, we would have, and we have not.

Saskatchewan recently added 375 megawatts of wind power generation at Assiniboia and Herbert. SaskPower doesn’t publicly release data like Alberta’s grid does. So I don’t know for certain if we get days like Alberta where wind generation drops to 1 per cent of supposed nameplate capacity. But I’m guessing that will happen. So this interconnect will allow us to backfill with power from North Dakota and beyond. And since the Americans were so kind to build a massive wind farm just south of Estevan, maybe the wind will blow there when its not blowing in Assiniboia. Hopefully.

SPP.org posts some of its data publicly. And just after midnight, Saskatchewan time on Aug. 11, this is what it looked like – 46 per cent was coal, 15 per cent natural gas, 30 per cent wind, 5 per cent nuclear, 2 per cent hydro. Since it was midnight, solar went beddy-bye.

So great! We could buy some wind power from the Yankees! But wait! Nearly half of that power is coming from coal. And I don’t think they have implemented carbon capture on their plants, now, have they?

According to the U.S. Energy Information Administration, “In 2021, coal-fired power plants provided 57 per cent of North Dakota’s electricity generation, and wind energy accounted for 34 per cent.”

One social media comment to my initial story said, “And no jobs here in coal. Goodbye Estevan, you’re ruined.”

Key numbers

While SaskPower pointed out to this is not a power purchase agreement, but one for an increased interconnect, you can bet we’re going to be buying a lot of power through it. And we will do so through minimal infrastructure construction.

That’s because we already have the transmission lines capable of handling 650 megawatts in place, originating at Boundary Dam Power Station. Boundary Dam originally had a nameplate capacity of 813 megawatts, when all six units were running. So all they have to do is build a bigger power line from the U.S. border to Boundary Dam – a distance so short, you could walk it in an afternoon.

The new interconnect will be in place by 2027, in time for the retirement of the remaining units of Boundary Dam – Units 5 and 6.

This begs the question – what about the $1.6 billion investment made into the carbon capture plant for Unit 3? Does anyone think SaskPower is going to keep that massive facility open, and the mine feeding it, for just one relatively small unit? Then you have to wonder about Shand Power Station. Will the mine stay open for one singular unit there, if Boundary Dam is gone?

We pay next to nothing for the coal

That $52 million annual fee is much more than what SaskPower pays the provincial government in coal royalties via its coal purchases.

We pay next to nothing for coal – at least the coal on crown land, which is most of it.

A few years ago I got curious why the provincial budget never listed coal royalties. It listed oil, and potash, and even natural gas, until natural gas became a rounding error. But it never listed coal. So I did some digging. You can read what I found here.

In 2018, SaskPower paid $32.7 million in coal royalties to the province, and 72.3 per cent of its coal was Crown, with the remaining 24.7 per cent freehold minerals.

We are in the unique position of the Crown owning the utility, and the Crown owning most of the coal mineral rights. So we, the people who own the Crown minerals, charge us, the people who own the Crown power utility, next to nothing.

Oh, we do pay to mine it. No question. That year, coal costs (i.e. mining it) cost $296 million. But for the coal itself – it was a rounding error. The Crown royalties we paid ourself for coal in 2018 was just 63 per cent of the tariff we just signed onto for the privilege of buying more carbon tax-free coal power from North Dakota and the rest of the SPP.

Carbon leakage

This enlarged interchange, 650 megawatts, is “carbon leakage” writ large. The power is still going to be produced, just in jurisdictions that don’t really care too much about greenhouse gas emissions or carbon taxes.

Trudeau says we can’t burn coal here because coal emissions are bad, so the federal government is forcing us to shut it down. That same federal government will increasingly tax the hell out of coal until we do shut it down. But we’ll be able to buy plenty of power – a Boundary Dam Power Station worth of power – without paying a cent of carbon tax on that.

Apparently American coal-fired power won’t end the planet – but Saskatchewan’s will.

In the meantime, most of my neighbours are either coal miners or work for SaskPower with an average salary of around $100,000. How many of their houses will have for sale signs on them, while power hums along the transmission lines from the States?

We have hundreds of years of coal reserves in Saskatchewan. We have the technology to capture the carbon dioxide, and sulphur dioxide, if we implement it. We have dramatically reduced other forms of pollution from burning coal. And we can do all these things continually, reliably, and cheaply, wind or no wind, day and night, 24/7/365.

What are we doing here?

 

 

Brian Zinchuk is editor and owner of Pipeline Online. He can be reached at brian.zinchuk@pipelineonline.ca.