* Plant to produce 110 megawatts, capture 1 mln tonnes GHG
* Canada phasing out old coal-fired plants
* SaskPower looking to sell carbon to oil companies
WINNIPEG, Manitoba, April 26 The Western
Canadian province of Saskatchewan, which depends heavily on
burning coal for power, will build one of the world's first
commercial-scale power plants that will capture carbon dioxide
emissions, the provincial government said on Tuesday.
Saskatchewan said the power utility it owns, SaskPower,
will proceed with a long-planned C$1.24 billion ($1.31 billion)
conversion of a generating unit at its Boundary Dam Power
Station at the city of Estevan as the province moves to comply
with new Canadian requirements for cleaner coal power.
The project will have capacity to produce 110 megawatts of
electricity per year, while reducing greenhouse gas emissions
by 1 million tonnes -- the equivalent of taking 250,000
vehicles off the road each year, the provincial government
Construction will start shortly with operations beginning
in 2014, the government said.
The Canadian government has already committed C$240 million
to the project, with Saskatchewan covering the C$1 billion
The province, which is rich in oil, potash and uranium, had
been holding off on final approval of the project as it awaited
details of new federal regulations for coal plants.
SaskPower's three coal-fired power plants account for half
of the utility's electricity production.
Canada's Conservative government, which is facing an
election May 2, said last June that the country will phase out
older coal-fired power plants to cut greenhouse gas emissions
as the country moves to make cleaner-burning natural-gas plants
the new standard.
Canada has 51 coal-fired units producing 19 percent of the
country's electricity and 13 percent of its greenhouse gas
The new standards will force electricity producers to phase
out older, high-emitting coal-fired plants and require newer
facilities to match the lower greenhouse-gas emissions of more
efficient natural-gas-fired plants. Unless operators make
substantial investments to cut emissions from aging
coal-burning facilities, they'll be required to shut down.
TransAlta Corp (TA.TO), the country's largest operators of
coal-fired plants, is developing a near-commercial-scale
demonstration project near Edmonton, Alberta, that will also
SaskPower, meanwhile, is working on deals to sell its
captured carbon to oil drillers, which can use it to extract
oil from the ground, a spokesman for the utility said.
Cenovus Energy Inc (CVE.TO) currently imports carbon from
the United States to extract oil at its Weyburn, Saskatchewan,
oilfield. Penn West Petroleum (PWT.TO), which also owns Western
Canadian oilfields, has said it plans to increase use of
non-conventional means to extract oil.
(Reporting by Rod Nickel in Winnipeg. Additional reporting by
Scott Haggett and Jeff Jones in Calgary; editing by Peter