A Leap Towards Net Zero Power in Saskatchewan: SaskPower Approves 700 MW for New Renewable Energy Procurement | Bennett Jones LLP

[co-author: Nathan Green – Articling Student]

SaskPower, the Crown company responsible for the generation, transmission and distribution of electricity in Saskatchewan, announced on November 7, 2022 that it will have up to 700 megawatts (MW) of renewable generation by 2027 with a wind/solar mix of Will add 400 MW of new wind capacity and 300 MW of new solar capacity in south-central Saskatchewan. This will build on Saskatchewan’s existing renewable power sources, which accounted for 25 percent of all power generation in the province as of fall 2021 — primarily from hydroelectric power and wind power.

As of November 21, 2022, SaskPower has 30 MW of existing utility-scale solar and 615 MW of wind generation capacity. This announced acquisition will increase SaskPower’s solar generation capacity by 1000 percent and wind generation capacity by 65 percent. SaskPower will provide more details on specific renewable energy procurement contests and project locations on its MERX website in the coming months.

This recently announced acquisition is part of SaskPower’s goal to add up to 3,000 MW of wind and solar capacity by 2035, transforming the grid and creating significant economic opportunity.

This announcement follows exponential growth in renewable energy in Alberta, where installed wind and solar capacity has more than doubled to over 4,600 MW in the past two years. This significant growth was motivated by:

  • sharp decline in electricity generation costs for wind and solar projects in recent years;
  • Alberta’s deregulated power generation sector, which is attracting significant investment in renewable energy; and
  • the plentiful wind and solar resources of the prairie.

While Saskatchewan currently lags behind other provinces in adopting these renewable energy technologies, the regulated and vertically integrated nature of Saskatchewan’s electricity sector creates a comparatively low-risk investment environment, eliminating the need for third-party power purchase agreements. The forecast increases in the federal government’s CO2 price system also send a short and medium-term economic signal to create incentives for generating electricity from renewable sources. Combine these factors with reduced asset costs and virtually untapped wind and solar resources, and it is clear that Saskatchewan is well positioned for significant growth in its renewable energy sector.

Saskatchewan’s existing hydroelectric power plants and reservoirs align well with SaskPower’s proposed additional investments in intermittent renewable energy capacity, allowing such reservoirs to effectively act as batteries to store solar and wind energy. South Dakota, Ontario and Sweden are notable jurisdictions that exemplify the successful coupling of existing hydroelectric power plants with renewable energy and enable significant decarbonization of power generation.

The province is seeing a slight drop in emissions related to power generation as it works towards its goal of reducing CO2 -Emissions by 50 percent from 2005 levels by 2030. SaskPower also plans to source other key technologies from private producers that will play an important role in the transition to net-zero power, including a 20 MW battery energy storage system at Regina, a 35 MW geothermal system power plant in southeast Saskatchewan and possibly a 300 MW small modular nuclear reactor.

Continued investment in low-carbon power generation is critical to achieving a net-zero economy. With several major procurements for renewable energy generation announced just this year, SaskPower shows a significant commitment to such investments in the short and medium term. SaskPower says its renewable projects are open to “any vendor.” Prospective developers should follow SaskPower’s published procurements for the latest information on SaskPower opportunities.