Source   : Leader Post ' Saskatchewan Energy to be 50 percent renewable by 2030 '. 19-Nov-2015

On Wednesday (and, it has to be said, somewhat out of the blue) Premier Wall announced a 50 percent renewable energy target for Saskatchewan's electricity sector by 2030.  He also said that details would be released on Monday (i.e. tomorrow).

So we delayed our previously promised post on carbon and instead devoted this one to an attempt to explain what is going on and to highlight things to watch out for tomorrow. 

What did Premier Wall actually say?

This Government tends, when it speaks of renewables, to talk in capacity installed rather than electricity generated. The reason is that the former number is significantly larger than the latter - in other words 'it sounds better'.

So what did the Premier really say: capacity or electricity generated?

With respect to the whole file, Mr. Speaker, I hope that we have the support of members opposite when early next week we will be announcing through SaskPower the objective that by 2030* we will rely 50 per cent on renewable energy for our electricity supply in the province of Saskatchewan — 50 per cent by 2030* — and a huge ramping up of solar, Mr. Speaker, of wind, and possibly geothermal.
— Premier Wall. Hansard: Debates & Proceedings. Wed 18 Nov. page 7714

* - NB: The Premier actually said '2050' and the date is recorded as such in Hansard. However he subsequently corrected this to 2030 and that is the date which, to avoid confusion, has been noted in this blog.

While this gives the impression that renewables will be 50 percent of energy (and not capacity); history suggests that spoken words in the Legislature mean even less than written policy which, in any event, is subject to change.

So what should we be looking out for on Monday? That requires a bit of digging..



What do we know?

Electricity today. Approximately 23 percent of our electricity is generated by renewables and the bulk of that is from hydro-electricity. Wind, at 2.7 percent, is only a very small part of the total and solar is so small it does not even show in the statistics. 

Source: SaskPower 2014 Report

SaskPower's current wind plans. In April SaskPower announced that wind would be 20 percent of installed generation capacity by 2030. Indeed the company has in the last few days (finally!) changed its corporate 'wind fact sheet' which now confirms that wind will be 20 percent of total installed capacity by 2030. This equates to approximately 15 percent of total electricity, 750 turbines or 1,500 MW of capacity.

Cost of wind and solar. Wind energy is today cost competitive with natural gas and half the price of coal with carbon capture. Wind is also half the price of solar. The cost  of both wind and solar is falling rapidly - with solar costs falling the fastest. There is good reason to believe the price of solar and wind may be comparable within the next ten years.  

Geothermal potential.  There is not a single operating deep geothermal facility in Canada since, to date, no economically feasible reserve has been demonstrated. In May 2013 DEEP Geothermal of Saskatoon was awarded $2.2-million of Government funds to investigate deep geothermal energy in the province. The (public) information about what they found is limited to a two-page 'pre-feasibility' report from August of last year. It notes the intent of DEEP to pursue a geothermal plant with a net output of 5 MW and a capacity factor of 95 percent. The amount of electricity that would be generated is equivalent to 0.2 percent of the 2014 Saskatchewan total and is so low as to be insignificant. 



What we can estimate

Hydro-electric renewables in 2030. Known new additions (Tazi Twe/Black Lake First Nation - 50 MW - and an additional 500 MW from Manitoba) imply that hydro will be generating 23 percent of electricity in 2030: in other words limited change from the current 20 percent.

Total 2030 electricity demand. SaskPower's last rate application  forecast growth in demand for electricity of 29 percent over the 10 year period from 2013. If one assumes the same annual growth rate over the 15 years from 2015, it implies total electricity demand, by 2030, of 34,000 GWh. This is almost half as much again as the current level of 23,424 GWh.

System average capacity factor. This figure indicates the amount of time that total installed generation capacity is actually running and was 64 percent in 2014. As more gas, wind and solar capacity is added (lower capacity factor) and as more coal is removed (higher capacity factor), this figure will fall. Consequently a system average capacity factor of 50 percent is assumed for 2030.



The two options: energy or capacity.

As noted we are faced with two options: the Premier's 50 percent renewables target relates either to electricity generated or to capacity installed. Looking at each in turn;

50 percent renewables by energy: eminently doable with room to grow renewables.

If renewables generate 50 percent of electricity that equates - given total electricity generation of 34,000 GWh by 2030 - to 17,000 GWh from renewables. Out of that total 15 percent will be generated by Saskatchewan hydro projects, 8 percent is hydro imported from Manitoba and around 15 percent is from wind.  It would appear that only a very small portion will be from geothermal which leaves a big chunk (12.5 percent) which is unknown and labelled as 'Other'.

Source   : SaskWind estimates and calculations

Source: SaskWind estimates and calculations


50 percent renewables by capacity: unambitious.

If however the 50 percent target refers to installed capacity, and not to electricity generation, then the 2030 renewable target is decidedly less amibitious. Given the lower capacity factors of renewable energy - the amount of electricity coming from renewables by 2030 will be just over 40 percent. To put this in context: current Canada-wide electricity generation is 76 percent renewable.

In this scenario the 'Other' category is likely to be mainly solar PV. FYI: 4.3 percent of 34,000 GWh is 1,400 GWh which, given solar's capacity factor, translates into just under 1,000 MW of solar.

Source: SaskWind estimates and calculations.




Energy or Capacity: Number 1: are we talking energy or capacity?

Why the wind constraints? Regardless of the answer to the first question (energy or capacity) it would appear that SaskPower has limited ambitions for wind: specifically SaskPower has advised that wind will be restricted to approximately 1,400 MW by 2030. Given expected electricity demand at that time - this represents 15 percent of electricity generation. This appears unjustified for three reasons;   

1) As noted: Wind energy is cost competitive with natural gas, half the price of coal with carbon capture and significantly cheaper than nuclear. It is the cheapest form of new renewables on the market today.

2) Saskatchewan has a world class wind resource - which is substantially better than the average in both the US and Europe.

3) The European Union and the US expect 23 percent and 20 percent respectively of ALL their electricity to be generated by wind in 2030. The US is ahead of plan to deliver on its target and consequently this year it expanded it to 35 percent of electricity from wind by 2050. These national goals should give confidence that there are no electro-technical barriers to significant adoption of wind energy. Also of note is that 7 US States already generate more than 15 percent electricity from wind. Two of them (Iowa and South Dakota) are likely to reach 30 percent this year or next. 

Against this background SaskPower needs to explain its unambitious 2030 wind target.

Solar. Total speculation at this stage: but it does look as though solar will be the big winner tomorrow. It would be reasonable, while it is still relatively expensive compared with wind, to award 200 to 300 MW to solar. However if the solar award ends up being 1,000 MW: one might be tempted to ask why given the significantly better economics of wind.

There are other questions but they are overly speculative until after we have more information tomorrow.



The major takeaway

All change please. The targets are not, as noted, particularly ambitious. Their significance does however lie in what they say about a change in direction at SaskPower. It was only 18 months ago that then-CEO of SaskPower (Rob Watson) said "Not in my life time will we have more wind energy in Saskatchewan". That mantra has clearly been consigned to the trash (where it belongs).

SaskPower's view, only a few months ago, was that non-hydro renewables would be rendered irrelevant by the costly experiment of carbon capture underway at Boundary Dam. However revelations, of serious technical and financial difficulties, have put paid to that notion.

SaskPower's past vision of carbon capture may not be completely dead. Nonetheless this major renewables expansion does indicate that carbon capture, as a serious option for Saskatchewan, is on life support and living on borrowed time. 

SaskPower has shown that it is now at least prepared to give non-hydro renewables enough room to prove their potential and it is now up to the renewables industry to prove it can deliver.

AuthorJames Glennie