A recent study indicates that the Saskatchewan government’s choice to renovate its coal-fired power facilities could amount to as much as $46.4 billion over the next two decades. This figure surpasses the previously leaked internal SaskPower documents’ estimate of $26 billion over 25 years. Brett Dolter, an associate professor at the University of Regina’s economics department, sought to evaluate the expenses associated with Saskatchewan’s strategy to transition from coal-fired power plants to nuclear power and Small Modular Reactors (SMRs).
Dolter’s analysis reveals that this plan will be costlier and more environmentally harmful compared to decommissioning the coal plants and developing a mix of natural gas plants and renewable energy systems, which was the province’s initial plan before the policy reversal in early 2025. Dolter emphasized the potential savings of adopting a scenario that reduces costs, emissions, and saves individuals an average of over $800 annually as a clear advantage.
Drawing information from leaked SaskPower documents, submissions to the province’s rate review panel, and certain assumptions due to the lack of shared internal government analysis, Dolter underscores that incorporating carbon pricing into the equation further accentuates the savings. Without carbon pricing on heavy emitters, sticking with coal would entail a cost of $30.2 billion over the next 20 years. When factoring in carbon pricing, the cumulative expense rises to $46.4 billion, reflecting Ottawa’s memorandum of understanding with Alberta earlier this year.
Dolter highlighted the substantial cost reduction when carbon pricing is considered, emphasizing the financial implications of Saskatchewan’s current trajectory while refraining from speculating on the rationale behind the government’s decision. In response to Dolter’s analysis, the provincial government provided a statement emphasizing the importance of reliable and affordable electricity for Saskatchewan’s growth, mirroring Crown Investments Corporation Minister Jeremy Harrison’s stance on pursuing a diversified energy strategy.
The document filed by SaskPower with the rate review panel indicated potential savings exceeding $21 billion by extending coal operations rather than adhering to clean electricity regulations. Despite previous intentions to move towards a coal-free future, the province redirected its course in early 2025, prompting discussions on the economic and environmental implications of this shift.
Mayor Tony Sernick of Estevan expressed relief following the government’s decision, noting a shift towards optimism and new development plans for the city. Sernick acknowledged the potential population decline Estevan faced before the coal and nuclear announcements, highlighting the importance of maintaining stability through the energy transition.
The article also touches on Canada’s historical efforts to phase out coal-fired power, with past regulations setting closure deadlines for such facilities. In contrast, Saskatchewan’s deviation from federal clean electricity regulations raises legal concerns, potentially exposing the province to legal risks regarding carbon pricing and coal-fired power regulations. Dolter warned of the financial and legal risks associated with refurbishing coal plants if court challenges result in their shutdown post-investment.