April 21, 2021 Read More →

SaskPower Boundary Dam project highlights obstacles to carbon capture

The Energy Mix:

A troubled demonstration project in Saskatchewan may be an example of the challenges the Trudeau government will face if it relies on carbon capture, utilization and storage (CCUS) technologies to reduce the country’s greenhouse gas emissions, as this week’s federal budget proposes, an analyst with the Institute for Energy Economics and Financial Analysis has told The Energy Mix.

“Budget 2021 proposes to introduce an investment tax credit for capital invested in CCUS projects with the goal of reducing emissions by at least 15 megatonnes of CO2 annually,” the budget states. “The government intends to take significant action to support and accelerate the adoption of these technologies. By providing incentives to adopt CCUS technologies, the proposed measure will be an important element in Canada’s plan to achieve net-zero emissions by 2050.”

IEEFA’s director of resource planning, David Schlissel, said he supports funding in the budget to experiment with newer forms of CCUS. But he told The Mix those efforts could run into the same financial headwinds that have plagued the Boundary Dam CCUS project in Saskatchewan, while creating momentum for power plants to burn more carbon.

“You now have a plant that has two products,” he explained in a phone interview yesterday. “Yes, they produce electricity, and they’re also a factory for CO2. The more CO2 they produce, the more they can capture, and the higher their revenues are, so they have an incentive to run the plants more to capture more CO2. All in the name of reducing our CO2 emissions in order to help stave off climate change.”

“You could be nice and say this is a perverse incentive,” added Schlissel. “But when I’m alone, I just say it’s insane.” 

[Staff Report]

More: Carbon Capture Tax Credit Could Drive Up Emissions, Analyst Warns

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