Saskatoon StarPhoenix

Outlook upbeat for renewables at SaskPower

Crown corporatio­n posts $46M profit, confident of hitting green energy target

- D.C. FRASER dfraser@postmedia.com twitter.com/dcfraser

SaskPower posted a $46-million profit in 2016-17 and executives at the Crown corporatio­n are confident it will reach its goal of producing 50 per cent of power to the province through renewable sources by 2030.

SaskPower’s annual report, released Wednesday, showed it invested $866 million in the province’s electricit­y system over the past year, largely to sustain an aging power grid.

Coal remains a significan­t source of power for the province: 32 per cent of available power capacity right now is generated from the non-renewable resource.

Natural gas produces 40 per cent of the province’s power, hydro accounts for 20 per cent and wind for five per cent. Other sources make up the last three per cent.

In the 2016-17 fiscal year, SaskPower spent $112 million refurbishi­ng three power stations in its coal fleet, in large part, according to the report, because the resource remains a cost-effective supply.

The province has an in-principle agreement to ease the economic impact of new federal coal regulation­s, but will still need to make significan­t investment­s in other power sources in order to meet the 50 per cent target by 2030.

SaskPower is planning to add more wind power capacity to its grid.

Wind accounts for 220 megawatts of the Crown’s total power mix right now. That number is targeted to grow to 2,100 MW (30 per cent) of the total power mix by 2030.

Each year from now until then, the province is looking to add roughly 200 MWs in order to reach that goal. A 175 MW wind project in southern Saskatchew­an is currently in production and SaskPower has a request for proposal out looking to develop another 200 MW.

A $300-million, 50-year life extension project of six units at the E.B. Campbell Hydroelect­ric Station also began in 2016-17.

SaskPower also launched a competitiv­e process for the province’s first 10 MW, utility-scale solar project, which once built will be the first Canadian project of its size outside of Ontario.

Despite the annual report stating Saskatchew­an has the best potential in Canada for solar power, it is taking a back seat to wind.

SaskPower president and CEO Mike Marsh says this is because the cost of wind is more favourable given current market conditions.

Beyond coal, significan­t investment­s continue to be made in other non-renewable resources.

In the last fiscal year, SaskPower started constructi­on of a 350 MW natural gas-fired plant, Chinook Power Station, near Swift Current.

Marsh says that natural gas will be playing a bigger role in 2030, in order to backstop renewable energy sources.

“We cannot rely on wind and solar to provide that baseload energy,” he said, suggesting a full jump to renewable energy sources may be possible later in the century.

While the federal government has already put forward a plan to phase out convention­al coal, there is a growing expectatio­n more restrictio­ns will also be put on natural gas.

Marsh says if that happens it “would have an impact on us, in terms of the type of unit we might select for our next gas unit of generation.”

Coal is expected to give way to natural gas over the next decadeplus, but during that transition Saskatchew­an’s carbon emissions are expected to reach record-high levels in 2020.

“While it’s going to peak, we have every expectatio­n it will come down after that,” said Gord Wyant, the minister responsibl­e for SaskPower.

Marsh says rate increases can still be expected but that the Crown always looks to keep rate increases as moderate as possible.

NDP MLA Carla Beck said she is “not terribly confident at all” SaskPower will meet its 2030 target and was critical of the Crown increasing rates five times in two years.

“It will really have an impact on Saskatchew­an people,” she said.

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