A recent analysis revealed that the decision by the Saskatchewan government to renovate its coal-fired power plants may incur costs of up to $46.4 billion over the next two decades. This amount significantly surpasses the previously leaked internal SaskPower documents estimating a cost of $26 billion over 25 years.
Brett Dolter, an associate professor at the University of Regina specializing in economics, conducted the analysis to determine the expenses associated with Saskatchewan’s strategy of utilizing coal-fired power plants as a transition to nuclear power and the implementation of Small Modular Reactors (SMRs). Dolter’s study indicates that maintaining the coal plants and introducing SMRs will be more costly and environmentally harmful compared to retiring the coal facilities and integrating a mix of natural gas plants and renewable energy systems, as originally planned by the province before the policy reversal in early 2025.
According to Dolter, by factoring in carbon pricing, the cost of persisting with coal would reach $30.2 billion over the next 20 years. When considering the impacts of carbon pricing on heavy emitters, the total cost could escalate to $46.4 billion. Dolter highlighted the significant financial benefits of adopting alternative energy strategies that could save money, reduce emissions, and potentially save individuals over $800 annually.
While the financial implications of Saskatchewan’s current direction are apparent, Dolter refrained from speculating on the government’s rationale for choosing this path despite the known costs. The government’s response to Dolter’s analysis was limited to emphasizing the importance of reliable and affordable electricity for the province’s growth.
Mayor Tony Sernick of Estevan expressed concerns about the potential loss of a third of the city’s population if the coal-fired plants were discontinued. The decision to refurbish the province’s coal plants in 2025 aimed to safeguard jobs and economic stability, with a focus on transitioning towards nuclear power. Sernick noted a shift towards optimism in the city’s outlook, with plans for new developments aligning with the government’s energy strategy.
Canada’s efforts to phase out coal-fired power, initiated in 2012 under Prime Minister Stephen Harper and reinforced by regulations in 2016 by Prime Minister Justin Trudeau, have faced opposition from Saskatchewan’s government. Crown Investments Corporation Minister Jeremy Harrison defended the province’s stance on extending coal operations, challenging federal regulations on clean electricity and coal-fired power as unconstitutional. This deviation from federal guidelines could expose the province to legal risks and financial uncertainties, as highlighted by Dolter, particularly in the context of constitutional carbon pricing laws.