The carbon capture and sequestration (CCS) retrofit for Unit 3 at the Boundary Dam Power Station is on schedule to be completed in early 2014, and it's also on track for its $1.24 billion budget, says SaskPower president and CEO Robert Watson.

Construction is progressing very well, Watson said. Weather conditions in the fall have allowed contractors to proceed with very few interruptions.

“Anybody who drives by can start to see the super structure going up,” said Watson.

There were some construction delays late in the spring when the flooding was at its worst, and access to Boundary Dam became difficult. But he said the dry weather since late June has allowed the contractors to catch up.

SaskPower is confident that the project will still be completed in the first half of 2014, Watson said. They have targeted March of that year for the completion date, but Watson recognizes that with a project of this magnitude, it could be finished a couple months later than expected.

“We really do start to crank up the project in 2013,” said Watson. “That's when you'll see … as many as 600 people on the site just for the capture part of Boundary Dam 3. And then we'll have other projects going on, small ones on the site.”

About 300 people are currently working at the site, including construction workers, concrete workers and others who are tackling the exterior super structure, the roadways and the changes in traffic flows. The coal trucks now have to enter and exit the power plant in a different fashion.

The number of workers on site will increase slightly in 2012. The dramatic increase will occur in 2013.

Contractors have contingency plans to build temporary work camps for 2013, he said.

“We know that the Estevan area, which includes Weyburn and the general area, is full already,” said Watson. “Adding more people in, we have a plan to add camps if required.”

Boundary Dam Unit 3 continues to draw significant interest from the international community, Watson said. There are a couple of good reasons for that.

“We have world-class partners there, with SNC Lavalin, Stantec, Shell and Hitachi,” said Watson. “We also are getting lots of interest from not only other countries around the world, but governments, of course, who are looking to see how this works, because there are two aspects to it.

“There's the technology aspect to it, where we're proving out the technology. It's technology that's not brand new, but we're putting it into full production. We're testing it out, and we're quite confident that will work. And then the second aspect is to test out the financial model.”

Once Unit 3 is built and in production, jurisdictions that rely on coal-fired generation will want to know if the plant is performing up to expectations, and if the price per gigawatt of electricity is at the level that it should be.

A pivotal part of the project is the sale of the captured carbon, as it will offset some of the construction and operation costs. The captured carbon will be purchased by oil companies and stored underground for enhanced oil recovery efforts.

SaskPower is negotiating with several potential clients, and Watson hopes that an announcement will occur early in 2012.

Over 80 per cent of the contracts for the project have been awarded, and Watson was pleased to say that they are all fixed price tenders. Not only have the contracts been awarded for the construction of the building, SaskPower has also granted tenders for the piping, the boilers and the turbines.

The only remaining contracts are those that will be issued when the work has to be done, such as when internal construction occurs.

SaskPower has a great team managing the project, Watson said, and he's confident that the retrofit will remain close to the established schedule. The crown corporation receives weekly reports of what is happening at the site, and there aren't any concerns right now.

Due to the size and the scope of the project, he recognizes that could change, and things could happen that they haven't anticipated. But he expects SaskPower will deal with them as they come.

Once it is finished, the carbon capture and sequestration project is expected to reduce greenhouse gas emissions by approximately one million tones per year – the equivalent of taking more than 250,000 vehicles off of Saskatchewan's roads annually.

It is also expected to significantly add to the life cycle of Unit 3.

A decision has yet to be made on whether to retrofit Units 4, 5 and 6 at Boundary Dam for carbon capture and sequestration. The future of those three units won't be decided until Unit 3 is complete, and SaskPower has been able to evaluate the success of CCS technology.

Units 1 and 2 at Boundary Dam will shut down in the next few years, as they are viewed as too small to justify a retrofit.

The carbon capture and sequestration project is the largest capital investment ever for SaskPower. The federal government has committed $240 million towards the cost of the project. The sale of the captured carbon will also reduce the burden on SaskPower. The crown corporation will be responsible for the remaining amount.