Saskatchewan is right to keep its coal plants running

Replacing reliable electricity before alternatives are ready could cost the province billions

Much controversy has ensued over the Government of Saskatchewan’s decision to refurbish coal-fired power plants. Although the details deserve scrutiny, the premise is sound. Electricity generation is expensive no matter how it is done, and extending coal-fired power capacity makes fiscal and practical sense.

Saskatchewan is a sensible provincial outlier in its refurbishment plans. Alberta, Ontario and Manitoba have stopped burning coal, and Nova Scotia and New Brunswick will end the practice in 2030. By contrast, Saskatchewan will spend $2.6 billion to overhaul seven coal-fired generating units at Boundary Dam, Poplar River and Shand to extend their use until 2050.

Of course, the 2030 and 2050 dates are not coincidental. They align with international carbon emission reduction targets, supposedly ending up at net zero by 2050. Much could be said against the wisdom or necessity of these targets. They will curtail the power production that fuels industry, productivity and agriculture, jeopardizing world prosperity and food security.

However, Saskatchewan is not entirely pushing back against these carbon reduction goals. It is still pursuing more power production from natural gas and small modular nuclear reactors. Even if the experimental technology behind the reactors proves viable, the province will be well into the next decade before the reactors come online.

Maintaining coal production is still a practical necessity. And if there’s anything we would like a government to be, it is practical.

The province also has more reason than others to lean on coal more heavily. Whereas Manitoba, Quebec and British Columbia have 90 per cent or higher reliance on hydro for their power needs, Saskatchewan only has 14 per cent. Unlike Ontario and New Brunswick, there is no existing nuclear station. Meanwhile, the province expects growing electricity demand from mining, industrial development and electrification.

Manitoba has refused new AI data centres, but Saskatchewan said yes to one by Bell Canada. The data centre campus, currently being built south of Regina, will become partly operational next year. The centre will draw 300 megawatts, equivalent to five per cent of the province’s entire grid capacity.

The province is meeting this need through a new 370-megawatt natural gas plant near Lanigan, alongside new wind and solar projects. Still, it’s one indication of the fresh thirst for electricity that is just getting started.

Not surprisingly, the Opposition NDP has criticized the government for the plan. In May, the party released small portions of a leaked internal SaskPower document that projected that the average cost of electricity would be 20 per cent higher in 2030 and 95 per cent higher in 2040 if the coal plants were extended. And that price is apart from industrial carbon taxes.

The document also revealed that “SaskPower is terminating previous corporate commitments related to renewable capacity and emissions reductions.” The province was also counting on Ottawa to allow the plan to “proceed without regulatory violation.”

The document called that gamble an “extreme risk,” but it is one worth taking. The Clean Electricity Regulations and ever-increasing industrial carbon taxes will be corrosive for the Canadian economy. As it was with the consumer carbon tax, once the pain is felt from these initiatives, it will be politically difficult to keep ratcheting them up.

Besides, the federal government is too smart not to recognize Western discontent and its threat to Canadian unity. Who knows, Ottawa may even kick in some money to add carbon capture units to the coal plants. Saskatchewan pioneered the technology for a coal-fired unit at the Boundary Dam Power Station in 2014 and could always install it elsewhere.

As for the cost, the province claims coal is still the cheaper option. Building similar capacity through new natural gas plants would cost $10 billion. SaskPower also estimates that extending the coal fleet would avoid more than $21 billion in capital expenditures compared with a pathway fully compliant with Clean Electricity Regulations. That’s almost $20,000 per capita given Saskatchewan’s population.

The province can rightfully claim it is relying less on coal than before. The latest national electricity mix published by Environment and Climate Change Canada claimed 36 per cent of the province’s power was generated by coal. However, SaskPower’s more recent operating data shows coal only provided 24 per cent, with natural gas picking up half of the slack. The province is pursuing a power production path that is economical, viable and reliable.

Lee Harding is a research fellow at the Frontier Centre for Public Policy. He holds a Master of Public Policy (U of C) and a BA in Journalism, with a career spanning major networks like CBC and Global TV, as well as landmark published research on Canadian economic and social policy.