Thank you, Mr. Chair.
I'd like to tell you a little bit about what Saskatchewan is doing, which has importance to SaskPower on CCS—carbon capture and storage.
On the storage side and the enhanced oil recovery side, Saskatchewan has the Weyburn project, which has now stored over 17 million tonnes of CO2 in an oil reservoir, and in incremental oil, 20,000 barrels a day. So it's a huge project that the world is learning from.
We have another project in Saskatchewan called “aquastore”, which will be storing 600 to 700 tonnes a day from a refinery of CO2 into deep saline reservoirs, which again is very important for SaskPower to monitor.
On the capture side, we have two projects, which I want to talk to you today about. One of them is the Boundary Dam 3 project, and the second is called a demonstration facility.
I'll deal with the Boundary Dam project first. We've been studying how to capture CO2 from a coal plant for some years now. Originally, SaskPower looked at a type of capture system called “oxyfuel”, which we felt was too expensive. So we went, then, to post-combustion capture, which is what I'm working on right now at SaskPower. It will be potentially the first commercial plant to capture CO2 from a retrofit coal plant, for lignite coal, which is a very low-grade coal. Again, the world is very interested in seeing if we can manage the economics to make this work.
That plant, if it goes ahead, will be capturing one million tonnes a year of CO2. It is designed also to sell that CO2 to the oil and gas industry. I'm quite happy to say that I have six to eight clients right now in the oil and gas industry that are interested in buying that CO2. So one of the questions we're answering is, what will industry pay for CO2? We think we're getting very close to that answer, which is part of our economic package.
Boundary Dam is one of six units that we have at the Boundary Dam facility. Boundary Dam 3 is a 139-megawatt plant that's ready to be shut in, in two years. So SaskPower has taken the initiative, in conjunction with our federal government, to see if we can turn that coal plant into a viable electrical source.
What we're finding, and what we will release, is that there is a lot of life left in these coal plants. What we're also finding is that there are some tremendous efficiencies that can help drive the economics down for capturing carbon. That will be released once the project information comes out.
We have two important timelines here. One is that I'm submitting a business case to our provincial government and the board of directors of SaskPower by August this year. If it gets the go-ahead, the plant will be built by the end of 2013. Right now, we've commissioned and ordered a turbine from Hitachi in Japan, which will be the world's first turbine made specifically for a CO2 capture unit for a coal plant. That has put us very uniquely on the world stage, because we're at the procurement stage and it's the only plant that's ready at that level.
SaskPower is very committed to this project, and the reason it's committed is that we have to find out if coal is a viable option for our utility in the future. In fact, 55% of our energy comes from coal, and we just can't have those plants shut off. We have a lot of the mining industry that supports that mine, and we have a lot of people who work in those coal plants.
We're finding that we're pleasantly surprised by some of the economics we're being shown right now. You may have heard what the cost of capturing CO2 may be. Well, the numbers we're seeing are quite a bit lower than what the world has been forecasting. So we're very excited that, once this project goes ahead, we'll be able to actually define some of the questions that people are trying to get their heads around, such as what does it cost to capture CO2, and is there a life for coal?
We think we can clean our coal plants up to emissions in the range of 0.1 to 0.15 tonnes per megawatt hour, which is very clean. To give you an idea, right now, we're emitting 1.2 tonnes per megawatt hour. So getting it down to that level is very important to us, which is approximately 90% capture of CO2.
The technology we'll use at Boundary Dam 3, when it goes ahead, will be Cansolv. Cansolv Technologies was originally a Quebec-based company that is now owned by Shell Global. The construction company will be SNC-Lavalin. So they're both very anxious to make this project go ahead.
I'll just move on to the next plant or facility. It's in the conceptual stage right now. It's called a demonstration facility. Where this idea came up, from the provincial government, was that we saw a need to do pre-commercial testing for these capture units. There is no place in the world right now that can bring different technologies in and test at a pre-commercial stage.
For example, in one of the technologies I'm looking at right now, they're basing a lot of their engineering on a 12-inch column. Well, the absorber is 22 metres in diameter, so you have to have a much larger test bed, and that's what we are working on.
What we've done is we've gone out to industry and we've said, “What would encourage you to come to SaskPower in Saskatchewan to build your own unit to do a test, so that you could pre-commercial test your technology faster?” What they said was, “We would like to be part of three test beds that we could come in and build our unit, do our testing, but show the world that we could actually do the construction.” We have, right now, Hitachi, Toshiba, Siemens, BMW, and Sojitz—other companies that are interested in testing on this concept or facility.
Where it's hung up right now is funding. We have a commitment from our provincial government. We have a commitment from industry to come in with SaskPower to build the facility. We have a $92 million request in to the federal government in order to make this a partnership between the federal-provincial government and SaskPower plus industry, and we're seeing no movement basically from the federal government to participate in this project.
I will say that if that project does not go ahead, it may actually affect Boundary Dam proceeding, because we need to have a technology platform in order to test into the future.
So we have both projects wrapped up together.
A very important date is August of this year for my first business case. The second one is, of course, for the demonstration facility. If we don't get some word that there's federal participation soon, we'll lose a window to have this facility up and running by the end of 2012, and we will have lost our international membership to participate.
Thank you very much, Mr. Chairman.