Brian Zinchuk is editor and owner of Pipeline Online
David Grass, left, quizzes Premier Scott Moe, right. Grass was wearing a Buffalo Party shirt at the time. Photo by Brian Zinchuk
ESTEVAN – Several hundred people came out to see and speak to Premier Scott Moe at a barbecue in Estevan on Aug. 23, and a substantial number of those were people who work in coal-fired power production, concerned about their future and the future of the community.
Moe was flanked by Estevan MLA and Minister of SaskBuilds and Procurement Lori Carr.
The barbecue came a day after Minister of Crown Investments Corporation and SaskPower Don Morgan told John Gormley Live that the province was considering possibly as many as nine small modular reactors, and that the first one could cost as much as $5 billion.
Moe is asked about that, and his response indicated for the first time in years, the Saskatchewan government might be looking at much larger reactors in the 1,000 megawatt-range.
Here’s the press scrum following the barbecue, verbatim:
Pipeline Online: You’ve been asked to watch today about coal and nuclear and everything. And this is all stemming from the Clean Electricity Regulations, which came out in August 10. And those regulations basically make it impossible, even with carbon capture, to run coal at all. And they say that if we want to use natural gas, we have to have enormous or carbon capture on everything. So it’s either that or nuclear. So where’s Saskatchewan going with this?
Scott Moe: Yeah, I would say the Clean Electricity Regulations are the latest in a long line of regulatory changes, introduction, and ultimately, the confirming of the Supreme Court of Canada, of the carbon tax, which does impact how the affordability of our power mix here in Saskatchewan.
Most certainly, the clean electricity regulations are the latest in a long line of challenging, challenging policy decisions by the federal government, not only for the community of Estevan, but more broadly, I would say for the province of Saskatchewan and a number of other provinces as well, as we produce about 75 – 80% of our usage, power comes from either natural gas or coal-fired power.
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Also, those clean electricity standards, and you mentioned, alluded to this, when would force us to remove significant assets from our power generation mix long before their lifecycle has been reached. And so, what we had said a couple of months ago, is how we produce power in this province is it’s a provincial decision, as per the Constitution. And so, we’re going to make those decisions in the best interest of affordable power rates in the province, reliable power rates in the province, and all the while reducing our emissions at a level that most certainly isn’t going to result in doubling and tripling the power rates for our industries, and most importantly, for our families.
And so, good discussion here today with respect to the significant coal assets that we have and in SMM and how we are going to operate those and good input provided on how we’re going to operate those, as we look ahead.
And that being said, on the affordable supply of power, as per if the Supreme Court of Canada has said that we do need to charge a carbon tax on emissions, those emissions become part of the cost of power for Saskatchewan residents. And so, we need to yes, engage with the folks in Estevan, but also engage with folks across Saskatchewan on how is best to run the lifecycle of these assets out? Will that be coal-fired power out to the end of their life, which is just post-2040? Or would we have to look at potentially converting that to a gas power at some point in that time period? And then what comes after that? And that’s where the small modular reactor discussion is coming into play. We don’t have a lot of additional hydro capacity in Saskatchewan, we don’t have a lot of hydro capacity here in estimate. But we do have 14 or 1600 megawatts of transmission capacity to come into Estevan. And we want to make sure that we’re utilizing all of that transmission capacity through the lifecycle of the of the assets that we have, and also going to utilize it for decades into the future.
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Pipeline Online: Last year, Minister Morgan talked about building up to four reactors. And yesterday, he was on Gormley, and he mentioned, well, maybe six, and maybe up to seven, eight, or nine. And you and I have discussed, we might need up to 20 or more. What is the actual number and how much per reactor are you planning for?
Scott Moe: I don’t think that that number certainly hasn’t been decided on, as of yet. But as we look ahead, through the decades, and not the next number of years, but through the decades, you know, we’re embarking down that path with going through the regulatory process on where you may locate and a small modular reactor, and how many you can ultimately locate at that.
So I won’t surmise as to what the end number would be of small modular reactors, because other are other options, and larger 1,000 megawatt reactors and such. There’s other, options that we have that can play into this as well, with some of the other generation infrastructure that we have.
However, I did note one comment that that SaskPower had made, is that when you’re looking at the economies of scale, it might be more affordable and cheaper if you were to build two at a time, and I did take note of that. So you know, as we find our way through this conversation, aligning with Ontario and New Brunswick in Alberta and the memorandum of understanding that we had put together, and at times, you know, asking our federal government to participate. Because one of the reasons we’re having this discussion at this point in time is because of all of the regulatory pressure that they are placing on Saskatchewan residents and on our generation system and they need to participate financially. They provided the 24 million of our tax dollars back the other day. But what our ask is for them to provide 75% of the funding of the first reactor that we build here in the province
And so, many decisions to be made with respect to small modular reactors, how many, but I think we’re getting a fairly narrowed in on where the location is. It’s down to Estevan and Elbow. And most of the discussions that I’ve heard is about utilizing the transmission capacity, long term, that we have here in Estevan.
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Estevan Mercury: The regulations that were announced earlier this month, did they make it more likely or less likely of retrofitting Shand Power station with the natural gas and CCS abilities, which has been discussed?
Scott Moe: According to the federal regulations? If you were to follow them by the letter of the law, it would make it illegal. And so that’s that’s where the federal regulation is, in a post 2035 environment is not only will you not burn coal, but you won’t burn coal past 2035.
Estevan Mercury: But natural gas, would it be less likely?
Scott Moe: Yeah, well, natural gas has a lower emission profile than than coal itself. However, what they’ve said is that natural gas would likely not be available in the post-2035 environment, either.
What we’ve said is you can have all the regulations you want, federally. This is provincial jurisdiction, and we’re going to make these decisions in the best interest of Saskatchewan residents. And we’re going to work with folks right here, in Estevan, on what those decisions are, and how we run the lifecycle of those significant assets that we have, here in Estevan. And ultimately, then what comes after that.
And so there’s really at least a two-part discussion on that. The other cost that comes into play here is, with the Supreme Court ruling on carbon tax, having to be applied to things like coal-fired emissions, things like natural gas emissions, that becomes a cost of producing power. It’s a cost that our Atlantic provinces are just realizing now, as it’s being imposed on them, just over the past number of months. And we’re seeing some real unrest from other areas of Canada, not just Saskatchewan, with the what is repeated federal overreach into areas that have traditionally been and by the very letters of the Constitution, are provincial jurisdiction. This is just yet another case of it.
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Estevan Mercury: Are you looking at another Supreme Court fight?
Scott Moe: Well, as I said, that would be a question best pose for the Federal Minister of Environment or the federal government. We’ve said what we’re going to do. We believe the Constitution says it’s provincial decisions, and it’s under the provincial jurisdiction. They have their regulations that they may feel we’re not following. And the question is to demonstrate what are you going to do, federal government, when Saskatchewan does exactly what we said we’re going to do in providing affordable, reliable power to our residents.
Pipeline Online: One of the things that the cleaner electricity, this whole movement, from the federal government, is pushing wind and solar. Yesterday, Alberta’s wind was producing less than one-third of one per cent at noon. And we had on August 6, in Saskatchewan, three hours and 17 minutes of zero wind power production. So, when you’re having that discussion for feds, and they’re telling you, we got to build more wind, you got to build more solar. What do you say to them?
Scott Moe: Well, I think SaskPower summed it up well, when they said, you know, your targets that you’re putting forward are just simply unachievable. Not only are they unaffordable, to even attempt to achieve, but you can’t achieve them.
And part of that is, you know, when you look at wind power and the efficiency of wind power in a place like Saskatchewan, it just isn’t baseload power, and isn’t going to be baseload power. And so, we need to look at these other options that we have, that are as affordable as possible, as we move forward. And part of that is about running the lifecycle of the assets that we currently have out to keep that power rate affordable.
That being said, renewables like wind and solar, they do have a place, in, as they’re through a power purchase agreement, they’re fairly cheap power, when they are spinning. And so, they can help drive the cost, the net cost of power down, for families and for industries here in the province. And so, they do have a role to play. However, you know, keeping the lights on, and the furnace fan running, day in, day out in this province is not going to be done by wind farms and solar farms.
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