July 17, 2006

SaskPower advances feasibility study of zero-emissions coal plant as part of clean energy portfolio

SaskPower and Marubeni Canada signed a memorandum of understanding (MOU) on July 6 which will provide design and engineering for a steam turbine generator and related systems for a 300-megawatt (MW) clean coal plant. The facility would be the world's first near-zero-emissions pulverized coal plant of this scale.

The resulting operational and economic data will help SaskPower determine whether to actually build the $1.5-billion plant, which is expected to greatly reduce greenhouse gas emissions by capturing at least 90% of carbon dioxide (CO2) emissions. CO2 recovered from the clean coal power plant could be sold for enhanced oil recovery operations in southeast Saskatchewan or sequestered in deep saline aquifers

SaskPower's clean coal project team has been examining the feasibility of a clean coal plant that would capture about 8,000 tonnes of CO2 a day. It would allow the corporation to meet emerging regulatory requirements while adding much-needed base-load generating capacity that continues to take advantage of Saskatchewan's 300-year supply of low-cost lignite coal.

The two most feasible potential sites for a new clean coal power plant are the Poplar River power station near Coronach and the Shand power station. The corporation expects to make a decision about whether to proceed by mid-2007, following a review of technical, regulatory, environmental and economic considerations.

"We will carefully weigh the merits of a clean coal plant along with other potential supply options as we look to replace or refurbish our aging generation fleet through the next 20 to 30 years," said Pat Youzwa, SaskPower president and CEO.

With approximately two-thirds of Saskatchewan's electricity generated from coal, SaskPower is continually working to reduce emissions. Significant gains have been made in controlling particulate matter, sulfur dioxide (SO2), nitrogen oxides (NOX) and mercury. CO2, however, remains one of the most significant challenges for SaskPower as well as all other electrical utilities.

SaskPower is the province's principal supplier of electricity, operating with a total available capacity of over 3,600 MW and 3,655 supplying more than 441,000 customers. The system-wide renewal slated for the next 20 to 30 years, as noted by Youzwa, offers the corporation a rare opportunity to incorporate sustainable and renewable energy sources, and recent additions to its system have done just that.

Notable among these was the recent official opening of the $272-million, 150-MW Centennial wind power facility about 25 kilometres southeast of Swift Current. Construction of what is Canada's largest operating wind facility is among the numerous highlights of in SaskPower's recently released 2005 Environment Report, titled Our Changing Environmental Landscape.

Centennial's 83 turbines will provide enough zero-emissions electricity for the equivalent of 64,000 Saskatchewan homes and bring Saskatchewan's total wind generation capacity to 172 MW, or 5% of the province's total electrical generation capacity. This is currently the highest percentage in Canada.

In addition its groundbreaking research on a zero-emissions coal plant, SaskPower is also conducting a feasibility study on polygeneration. Fuelled by petroleum coke or residuals from the oil refining process, the facility would use hydrogen, nitrogen, steam and CO2 to produce diverse commodities including electricity and fertilizer, while nearly eliminating emissions. Rick Patrick, vice-president of planning, environment and regulatory affairs, notes that "Emerging technologies have the potential to help us address one of Saskatchewan's primary environmental challenges associated with the generation of electricity - greenhouse gases."

Other significant environment-related achievements during 2005 included:

*continuation of an international mercury capture project at the Poplar River Power Station;

*the signing of a power purchase agreement with Alliance Pipeline for a five-megawatt heat recovery project, as part of Phase I of the Environmentally Preferred Power (EPP) program;

*submission of 17 proposals totaling a potential 241 MW under Phase II of the EPP program (four proposals have since been selected, three for heat recovery and one wind power);

*renewal of an Energy Performance Contracting service alliance with Honeywell for an additional five years;

*recertification of SaskPower's Environmental Management System under the ISO 14001 standard.

Additionally, the Shand greenhouse marked the province's centennial by growing and distributing approximately 80,000 Western red lilies. Since 1991, the greenhouse has been using waste heat from the power station to grow tree, shrub and grass seedlings.

The report also includes SaskPower's performance related to indicators set out under the Canadian Electricity Association's Environmental Commitment and Responsibility (ECR) program, which uses industry-wide comparative data.

More information on SaskPower's clean coal initiative, as well as its 2005 Environment Report, may be viewed on its Web site, www.saskpower.com. Details are also available from Larry Christie, 306/566-3167.

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