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There are two primary reasons SaskPower is facing a requirement for new electricity generation sources:
i. Load growth
Because our province’s economy is doing well, we’re facing an unprecedented demand for electricity. In 2008, our company set records for new service applications, new connects and peak load (amount of power required by customers at one time).
In the past 10 years, demand has grown by an average of 1.3 per cent each year. During the next decade, system peak demand is expected to increase by approximately 3.0 per cent per year. This will affect the amount of electricity required considerably. Our peak load is forecast to reach 3,214 megawatts (MW) this year. By 2019, it’s estimated that the system peak will increase by 1,104 MW to 4,318 MW - an average growth of over 110 MW or approximately 3 per cent per year.
There are many variables that can affect load forecasts. However, by far the most significant factors are the forecasts provided by our large-scale industrial and commercial customers.
ii. Aging infrastructure
In addition to addressing growing customer demand, our company must simultaneously revitalize its extensive province-wide electrical infrastructure. The majority of our generation, transmission and distribution system was built 30-50 years ago. Like others in North America, it’s showing its age and is operating at full capacity. In fact, many parts have already been life-extended or rebuilt.
Our vast transmission and distribution network provides the vital link between electricity generation sources and customers. Like much of our company’s supply capacity, it too requires considerable replacement, upgrades and expansion.
iii. Responding to Climate Change and Other Environmental Challenges
The need to tackle climate change - mostly caused by burning fossil fuels - has the single largest potential to shape the energy future of our company. Over 60 per cent of our generation capacity is fossil-fuel based, using coal and natural gas. However, with new environmental regulations imminent, reliance on conventional coal-fired generation is unlikely to be feasible.
Greenhouse gases (GHGs) - primarily carbon dioxide (CO2) from coal-fired plants - are a primary target of environmental regulation. We also need to achieve significant reductions in sulphur dioxide (SO2), nitrogen oxides (NOx), mercury and particulates, with associated costs estimated at $1.8 billion.
When it comes to CO2, the federal government has announced its intention to follow a cap and trade model for the electricity industry. A plan will likely be developed in advance of international climate change negotiations later this year. Until a cap and trade model is finalized, the cost implications for SaskPower cannot be determined.
In the past 10 years, demand has grown by an average of 1.3 per cent each year. During the next decade, demand is expected to increase by approximately 3 per cent per year.
Learn more about power projects currently underway.
