Powering A Sustainable Energy Future by oph12068

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									    Powering A Sustainable Energy Future
          THE ELECTRICITY AND CONSERVATION STRATEGY
              FOR MEETING SASKATCHEWAN’S NEEDS




    Standing Committee on Crown and Central Agencies
    October 6, 2009



1
                               The Day Ahead
    • SaskPower overview and challenges
       – Pat Youzwa, President & Chief Executive Officer - 40 minutes
    • Future demand for power . . . forecasting
       – Judy May, Vice-President, Customer Services - 40 minutes
    • Aging infrastructure
       – Mike Marsh, Vice-President, Transmission & Distribution - 15 minutes
    • Supply planning process . . . SaskPower’s future supply plan . . . future
      supply options
       – Gary Wilkinson, Vice-President, Planning, Environment & Regulatory Affairs - 120
         minutes
    • Energy efficiency and conservation
       – Judy May - 15 minutes
    • Impacts of a growing economy . . . conclusion
       – Pat Youzwa - 10 minutes
    • Questions



2
    Overview of SaskPower




3
                     SaskPower’s Story
                            • Our mission … Safe, reliable and sustainable
                              power for our customers.


                            • Formed through The Power Commission Act
                              in 1929, SaskPower is a provincial Crown
                              corporation.

                            • SaskPower manages $4.5 billion in
    Working together for      generation, transmission and distribution
    the past 80 years to      assets, and provides customer services and
    meet the energy needs     corporate support services.
    of the people of
    Saskatchewan now
                            • SaskPower’s team is made up of more than
    and into the future.
                              2,500 permanent full-time employees in 71
                              communities throughout the province.



4
    SaskPower Facilities




5
    SaskPower Generation Sources
             • SaskPower operates three coal-fired power
               stations, seven hydroelectric stations, four
               natural gas stations and two wind facilities

             • Power is also purchased from the SunBridge
               Wind Power Project, Meridian Cogeneration
               Station, Cory Cogeneration Station and the
               NRGreen Kerrobert, Loreburn, Estlin and
               Alameda Heat Recovery Projects

             • SaskPower’s total available generating capacity
               is 3,641 MW

             • Coal-fired electricity serves as the foundation of
               the SaskPower system
             • Efforts are made to maximize existing coal,
               hydro and wind generation, which have the
               lowest incremental cost per unit of generation



6
    Generation Infrastructure . . . Coal
                 Boundary Dam Power Station
                 • Located west of Estevan
                 • Largest lignite-coal burning power station in Canada
                 • 6 units with a combined generating capacity of
                   824 MW
                 • First unit commissioned in 1959
                 • Significant capital injection or retirement dates for
                   the units range from 2014 to 2025

                 Shand Power Station
                 •   Located east of Estevan
                 •   Recognized for advanced environmental design
                 •   1 unit with a generating capacity of 276 MW
                 •   Commissioned in 1992
                 •   Significant capital injection or retirement date for the
                     unit is 2038




7
    Generation Infrastructure . . . Coal

                 Poplar River Power Station
                 • Located east of Coronach
                 • Home to SaskPower’s Emissions Control Research
                   Facility
                 • 2 units with a combined generating capacity of
                   582 MW
                 • First unit commissioned in 1981
                 • Significant capital injection or retirement dates for
                   the units range from 2026 to 2028




8
    Generation Infrastructure . . . Natural Gas
                    Queen Elizabeth Power Station
                    • Located along the banks of the South
                      Saskatchewan River in Saskatoon
                    • 8 units with a combined generating capacity of
                      322 MW
                    • First unit commissioned in 1958
                    • Significant capital injection or retirement dates for
                      the units range from 2012 to 2029

                    Landis Power Station
                    •   Located near Landis
                    •   1 unit with a generating capacity of 79 MW
                    •   Commissioned in 1975, refurbished in 1999
                    •   Significant capital injection or retirement date for the
                        unit is 2014




9
     Generation Infrastructure . . . Natural Gas
                     Success Power Station
                     •   Located near Swift Current
                     •   3 units with a generating capacity of 30 MW
                     •   Commissioned in 1967/1968
                     •   Retirement date for the units is December 2009




                     Meadow Lake Power Station
                     •   Located near Meadow Lake
                     •   1 unit with a generating capacity of 44 MW
                     •   Commissioned in 1984
                     •   Significant capital injection or retirement date for the unit is
                         2015




10
     Generation Infrastructure . . . Hydro
                  Coteau Creek Hydroelectric Station
                  • Located on the South Saskatchewan River near
                    Outlook
                  • Draws water from Gardiner Dam on Lake
                    Diefenbaker
                  • 3 units with a combined generating capacity of
                    186 MW
                  • Commissioned in 1968
                  • Significant capital injection or retirement dates for
                    the units range from 2035 to 2039

                  Nipawin Hydroelectric Station
                  • Located on the Saskatchewan River near Nipawin
                  • 3 units with a combined generating capacity of
                    255 MW
                  • Commissioned in 1985/1986
                  • Significant capital injection or retirement dates for
                    the units range from 2021 to 2023



11
     Generation Infrastructure . . . Hydro
                  E.B. Campbell Hydroelectric Station
                  • Located on the Saskatchewan River near Nipawin
                  • 8 units with a combined generating capacity of
                    288 MW
                  • First units commissioned in 1963
                  • Significant capital injection or retirement dates for
                    the units range from 2035 to 2043

                  Island Falls Hydroelectric Station
                  • Located on the Churchill River near the
                    Saskatchewan-Manitoba border.
                  • The station was built by the Churchill River Power
                    Company to supply power for mining operations in
                    Flin Flon
                  • 7 units with a combined generating capacity of
                    102 MW
                  • First units commissioned in 1928
                  • Significant capital injection or retirement dates for
                    the units range from 2024 to 2043




12
     Generation Infrastructure . . . Hydro
       Athabasca System Hydroelectric Stations
                     Wellington Hydroelectric Station
                     •   Located near Uranium City
                     •   2 units with a combined generating capacity of 5 MW
                     •   First unit commissioned in 1939
                     •   Significant capital injection or retirement date for the units is
                         2041

                     Waterloo Hydroelectric Station
                     •   Located downstream from Wellington
                     •   1 unit with a generating capacity of 8 MW
                     •   Commissioned in 1962
                     •   Significant capital injection or retirement date for the unit is
                         2041

                     Charlot River Hydroelectric Station
                     •   Located downstream from Waterloo
                     •   2 units with a combined generating capacity of 10 MW
                     •   Commissioned in 1980
                     •   Significant capital injection or retirement dates for the units
                         are currently being determined



13
     Generation Infrastructure . . . Wind

                  Centennial Wind Power Facility
                  • Located southeast of Swift Current
                  • One of Canada’s largest wind facilities
                  • 83 wind turbines with a combined generating
                    capacity of 150 MW
                  • First turbines commissioned in March 2006
                  • Significant capital injection or retirement date for the
                    turbines is 2026

                  Cypress Wind Power Facility
                  • Located southwest of Gull Lake
                  • First wind generating facility built by SaskPower
                  • 16 wind turbines with a combined generating
                    capacity of 11 MW
                  • First turbines commissioned in 2002
                  • Significant capital injection or retirement dates for
                    the turbines range from 2022 to 2023



14
     Power Purchase Agreements
             Cory Cogeneration Station
             • Located at the Potash Corporation of
               Saskatchewan’s Cory mine site near Saskatoon
             • 228 MW natural gas-fired cogeneration facility
             • Owned 50% by SaskPower and 50% by ATCO
               Power
             • Commissioned in 2003
             • Power Purchase Agreement expires in 2028


             Meridian Cogeneration Station
             • Located at the Husky heavy oil upgrader near
               Lloydminster
             • 210 MW natural gas-fired cogeneration facility
             • Commissioned in 1999
             • Power Purchase Agreement expires in 2024




15
     Power Purchase Agreements

             NRGreen Heat Recovery Projects
             (Alameda, Estlin, Kerrobert, Loreburn)
             • Four waste heat recovery units will generate 20 MW
               Commissioned in 2006 and 2008
             • Power Purchase Agreements expire from 2016 to
               2018

             SunBridge Wind Power Project
             • 17 turbines with a combined generating capacity of
               11 MW
             • Commissioned in 2002
             • Power Purchase Agreement expires in 2022

             Red Lily Wind Power Project
             • 25 MW facility near Moosomin
             • Scheduled to be operational in 2011



16
     Transmission & Distribution Infrastructure
                        Extensive network
                          •   SaskPower is connected to
                              adjoining electrical utilities in
                              Manitoba, Alberta and North
                              Dakota through 7 tie-lines
                          •   Second largest service area
                              in Canada Lowest customer
                              density in Canada.
                               – SaskPower serves 3
                                 customers per kilometre of
                                 line versus a Canadian utility
                                 average of 12 customers per
                                 kilometre




17
     Transmission Infrastructure

                  • Net Asset base of $397 million

                  • 13,500 kilometres of high voltage
                    transmission lines
                     – 72,000 volts
                     – 138,000 volts
                     – 230,000 volts


                  • 52 high voltage switching stations

                  • Monitored and controlled through the
                    Grid Control Centre




18
     Transmission Infrastructure

                  Grid Control Centre (GCC)
                  •   Directs the safe and reliable
                      operation of the power system

                  •   Implements and administers the
                      Open Access Transmission Tariff
                      Services (OATT)

                  •   Operates in compliance with NERC
                      standards and requirements




19
     Transmission Infrastructure

              Communication, Protection and SCADA
              (Supervisory Control and Data Acquisition)

              • Provides remote operations and control of
                SaskPower facilities
                 – Generators
                 – Switching stations
                 – Transmission lines
                 – Substation facilities

              • Protection systems designed and implemented
                to maintain reliability and minimize service
                disruptions

              • Captures real time information to support
                system operations



20
     Distribution Infrastructure

             • Net asset base of $1.2 billion

             • 144,400 kilometres of distribution voltage lines
                – 25,000 volts
                – 14,400 volts
                – Overhead and underground

             • 182 distribution substations

             • More than 150,000 pole top and pad mounted
               transformers




21
     SaskPower’s Supply Challenge

              • SaskPower is facing an unprecedented
                demand for power from customers due to the
                momentum of the provincial economy
              • Need to retire/refurbish aging infrastructure
              • Environmental regulations have yet to be
                defined and may influence SaskPower’s
                choice of electrical generation options
                 − Coal-fired generation may not continue as it has
                   in the past

              • SaskPower will have to rebuild, replace or
                acquire 4,100 MW of electricity by 2030
              • Operational challenges with adding new
                generation




22
     Growing Demand for Power




23
     The Demand for Power
          Setting records at SaskPower in 2008
          • Record spent on connecting new customers
          • Record new applications for service in 2008
          • Record peak load

          Increasing demand for power
          • In the past 10 years, demand has grown by
            an average of 1.3% each year
          • During the next decade, demand is expected
            to increase by approximately 3% per year
          • Average growth of over 110 MW per year
             – 110 MW is enough electricity to supply power to
               approximately 110,000 households




24
                            Forecasting Demand
     Load forecast inputs
     • Information provided by industrial customers

     • Economic variables from the provincial economic model
        ─   Gross domestic product
        ─   Population
        ─   Households (residential and farm)
        ─   Commercial data (using real domestic product variables)

     • Weather normalization

     • Residential and commercial end-use data (customer surveys)

     • Historic load data




25
                               Energy Forecast

         29,000


         27,000


         25,000


         23,000
                                                                                         2008 Q2
                                                                                         2009 Q3
         21,000


         19,000


         17,000


         15,000
                98

                99

                00

                01

                02

                03

                04

                05

                06

                07

                08

                09

                10

                11

                12

                13

                14

                15

                16

                17

                18
             19

             19

             20

             20

             20

             20

             20

             20

             20

             20

             20

             20

             20

             20

             20

             20

             20

             20

             20

             20

             20
     For planning purposes, SaskPower uses a statistical analysis to develop high, low
     and most likely load forecasts



26
                                           Peak Load Forecast


     4,500




     4,000




                                                                                                                                                                2008 Q2
     3,500
                                                                                                                                                                2009 Q3




     3,000




     2,500
             1998   1999   2000   2001   2002   2003   2004   2005   2006   2007   2008   2009   2010   2011   2012   2013   2014   2015   2016   2017   2018




27
     Customers: Our Reason for Business
                     SaskPower’s customer base is
                     comprised of more than 460,000
                     accounts
                     • Residential – 328,719 accounts

                     • Farm – 62,712 accounts

                     • Commercial – 54,563 accounts

                     • Oilfield – 13,932 accounts

                     • Industrial - 78 accounts

                     • Reseller - 2 accounts




28
     Customers: Our Reason for Business
                             Projected Energy Growth - 2008 to 2019

                     30000

                     25000

                                                                      Industrial
      Energy (GWh)




                     20000
                                                                      Oil Field
                                                                      Commercial
                     15000
                                                                      Reseller
                                                                      Farm
                     10000
                                                                      Residential

                     5000

                        0
                                   2008              2019




29
     Where Demand is Growing

           Industrial customers
           • Customers who consume large amounts of
             electricity directly from the transmission grid

           • 35 customers currently account for 45% of the
             energy used in the province

           • Forecast average annual system energy growth
             (2009-2019) – 3.5%

           • Forecast average annual power class energy
             growth (2009-2019) – 6.7%




30
     Aging Infrastructure




31
                          Aging Infrastructure
     Transforming the system
     • SaskPower’s province-wide electrical infrastructure (generation/transmission
       and distribution) was mostly built 30-50 years ago

     • Infrastructure is aging and running close to full capacity

     • SaskPower continues to replace and refurbish aging electrical infrastructure to
       meet the electrical needs of the people of Saskatchewan as it has for the past
       80 years

     • Will extend the life of existing infrastructure, where prudent
        – Many areas have already been life-extended or rebuilt

     • Problem common to electrical utilities throughout North America




32
     Aging Generation Infrastructure
                • 4 generation stations built prior to 1960

                • 4 generation stations built 1961 to 1970

                • 1 generation station built 1971 to 1980

                • 4 generation stations built 1981 to 1990

                • 1 generation station built in 1992
                  (Shand Power Station)




33
     Aging Transmission Infrastructure
              • Many lines are more than 40 years old

              • Current capacity requirements exceed original
                design of many existing lines

              • Original portions of the system were built for
                provincial needs, not for export

              • North American Electric Reliability Corporation
                (NERC) and other regulatory issues resulting
                in system redesign and investment to ensure
                reliability standards

              • $500 million in capital spending estimated over
                next 10 years



34
     Aging Distribution Infrastructure
                • The capacity of existing lines is being
                  exceeded as the economy grows

                • Increases to substation transformer capacity
                  required in many locations

                • Over 1.2 million power poles in Saskatchewan

                • Programs currently underway to address aging
                  infrastructure:
                   – Rural overhead and underground rebuild
                     program
                   – Substation rebuilds and transformer upgrades
                   – Wood pole replacement program

                • $400 million in capital spending estimated over
                  next 10 years



35
     Transmission Load Growth
            • Large industrial customers moving forward
              with new projects and expansion of existing
              facilities

            • Increase transmission grid capacity to
              accommodate future overall load growth and
              ensure continued reliability

            • Connecting new generation to the grid
               – Ermine gas turbine addition
               – Queen Elizabeth Power Station gas turbine
                 addition
               – NRGreen

            • $1 billion in capital spending estimated over
              the next 10 years if economy remains strong




36
     Distribution Load Growth
                 • New customer connections for:
                    – Residential
                    – Commercial
                    – Oilfield


                 • Upgrades to substation capacity and
                   other equipment to accommodate
                   increased customer load growth

                 • $1 billion in capital spending
                   estimated over the next 10 years if
                   economy remains strong




37
                              Distribution Load Growth
                              Distribution Customer Load Growth Years 2004 - Year 2008


                  120

                  100
     $ millions




                   80

                   60

                   40

                   20

                    -
                        Jan   Feb   Mar     Apr   May    Jun    Jul     Aug          Sep   Oct   Nov   Dec


                                          2004    2005   2006    2007         2008




38
     Other Challenges




39
     Environmental Challenges
           Improving environmental performance
           • Climate change has the single largest potential to
             shape the energy future of SaskPower
              − Federal and provincial regulations
              − Significant cost impacts for SaskPower and its
                customers
           • Nearly 60% of SaskPower’s generation capacity
             is fossil-fuel based - using coal and natural gas
              − Regulations regarding coal generation are changing
              − Coal-fired generation may not continue as it has in
                the past
           • Anticipated need to reduce sulphur dioxide (SO 2),
             nitrogen oxides (Nox), mercury and particulates
              ─ $1.8 billion to reduce emissions to meet expected
                federal standards
           • Last coal power station built in 1992 (Shand)




40
                       Operational Challenges
     Balancing the system
     • A combination of baseload, intermediate, intermittent and peaking power are
       required to run the electrical system and meet the needs of the people of
       Saskatchewan
        – Baseload power is the minimum amount of electric power delivered or required
          over a given period of time at a steady rate
        – Intermediate power plants meet demand during peak business hours of the week
          and colder months of the year
        – Intermittent power facilities cannot be dispatched (turned off and on to meet
          demand) and only produce power when the resource they depend upon is
          available
        – Peaking power units only operate at times of peak system demand, such as
          suppertime.
     • This supply combination provides SaskPower with the flexibility to serve a
       demand for power than can swing from 500 to 1,000 MW daily – as loads
       drop overnight and rise in the morning



41
                       Operational Challenges

     Balancing the system
     • SaskPower must constantly and precisely balance the supply of power and
       the demands of customers

     • Interconnection with neighbouring jurisdictions can have a significant impact
       on the reliability of the interconnected systems. Reliability standards require
       SaskPower and other electric system operators to maintain sufficient
       transmission infrastructure and generating capacity to withstand the sudden
       loss of the largest generators in their fleets




42
     Operational Challenges




43
     Operational Challenges




44
     Operational Challenges




45
                        Supply Planning Process
     • At any given time, SaskPower is engaged in a comprehensive and well
       defined process of supply planning
     • Use a well-established power supply methodology common to other electric
       utilities
        − Work with customers to forecast requirements
        − Assess existing system capabilities
        − Evaluate alternative supply options
     • Information is used to create possible scenarios that assist in identifying the
       appropriate future supply, demand side management and transmission
       resources
        −   Load forecasts
        −   Generation retirements
        −   Yearly maintenance of existing facilities
        −   Current and potential environmental regulations
        −   Fuel, capital and operating costs
        −   Transmission constraints



46
     Supply Planning Process
            Making decisions
            • Consider all-in costs (impacts consideration
              of various options)

            • In the short-term, the key is to make timely
              decisions to meet lead time requirements

            • Over the longer term, the key is to apply
              resources and undertake research to better
              understand the supply options

            • Do not want to lock into an option earlier than
              required
               − Allow time for changes in regulations,
                 technology




47
     Considering Options for the Future
                  • Some supply options are best suited to meet
                    baseload requirements, while others can be
                    used to meet peaks in demand or as
                    intermediate and intermittent generation
                    sources
                  • The right mix gives us the security of
                    electricity supply
                  • SaskPower has historically relied upon coal
                    because of the abundance of this secure
                    and low-cost fuel in Saskatchewan
                     − Coal-fired generation may not continue as it
                       has in the past

                  • Attempting to employ environmentally
                    friendly generation sources while minimizing
                    costs for customers



48
     Short-Term Supply Plan

           Short-term . . . 2009-2014
           • Saskatchewan’s short-term electrical supply is
             secure
           • SaskPower has a timely and comprehensive
             strategy in place to meet the province’s
             electricity needs through 2014
           • The necessary actions are already underway
             to ensure the appropriate infrastructure is in
             place to meet projected demand




49
50
                  Short-Term Supply Plan
                         Short-term . . . 2009-2014
                         • Using customer-focused energy efficiency,
     Saskatchewan’s        conservation and load management programs to
     short-term needs      deliver 75 MW of reduced energy consumption and
     are being             120 MW of peak demand reduction
     addressed
                         • Installing natural gas turbines that enhance system
     strategically and
                           flexibility, laying the groundwork for the addition of
     decisively.
                           more wind power
                         • Pursuing new generation technologies, including the
                           development of one of the world’s first and largest
                           integrated carbon capture and sequestration
                           demonstration projects
                         • Undertaking short-term import contracts with
                           neighbouring utilities
                         • Improving short-term load forecasting
                            – next day/next hour forecasting



51
     Short-Term Supply Plan
        Short-term . . . 2009-2014
        • Upgrading voltages and constructing new lines to
          reduce line losses on the transmission system
        • Building on the work of the SaskPower Wind Power
          Integration and Development Unit
           – Continuing pioneering work in Canada on
             incorporating more wind into the provincial electrical
             system
           – Improving wind forecasting capabilities
           – Saskatchewan’s 4.7% wind penetration is more than
             double the national average of 2.3%
           – Possibility may exist to double province’s wind
             penetration in coming years
        • IPP development of renewables, including wind
          and biomass




52
                                                 A Leader in Wind Power
                                                  Percent Wind Penetration by Province in
                                                                 Canada

                                  25.00%




                                  20.00%
     Percent Installed Capacity




                                  15.00%
                                                                                                                         Note: This data was
                                                                                                                         compiled as of October 1,
                                                                                                                         2009. However, the data
                                  10.00%
                                                                                                                         used for this graph is
                                                                                                                         evolving continuously.
                                                                                                                         Installed capacities can vary
                                   5.00%                                                                                 depending on what units are
                                                                                                                         available to a jurisdiction.
                                                                                                                         Wind development is
                                   0.00%                                                                                 continuing in several
                                                                                                                         provinces. The data used is



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                                                                                                                         and should be updated
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                                                                                                                         frequently to ensure the %
                                  Canadian Provincial Average (2.3%) - does not include Nunavut, NWT or Yukon.           installed remains correct.




53
                             Short-Term Supply Plan
                              ADDING SUPPLY                                      RETIRING OR
                                                                             REFURBISHING SUPPLY
     Project                   Fuel      MW         In-service     Project        Fuel   MW        Retire

     Ermine                    Gas             92          2009


     QEPS SCGT                 Gas            105          2009


     North Battleford area     Gas            138          2010    Success        Gas      30      2009

     Tantallon RFP             Gas             92          2011


     Red Lilly                 Wind            25          2011


     Baseload RFP              Gas        200-400          2012


     BD Unit #3 CC             Clean          115          2013    BD Unit #3     Coal    139      2013
                               coal

     Renewables               e.g.        285-355        2013-14   BD Unit #1     Coal     62      2014
                              wind,
                              biomass

     Landis capacity           Gas             79          2014    Landis         Gas      79      2014
        replacement

     BD#4 capacity             N/A            139          2014    BD Unit #4     Coal    139      2014
        replacement

     Total                              1270-1540                                         449




54
                  Medium-Term Supply Plan
                      Medium-term . . . 2015-2022
                      • Continuing demand response initiatives as well as
                        expanding energy efficiency, conservation and load
                        management programs to deliver over 100 MW of saved
     Over the           energy
     medium-term,
     several viable   • First Nations partnerships - hydro development
     generation       • IPP development of renewables.
     supply options   • Pursuing new generation technologies
     are under        • Undertaking intertie capacity increases with neighbouring
     review.            utilities
                      • Evaluating numerous supply options, including: biomass,
                        carbon capture and sequestration, cogeneration,
                        compliant coal, heat recovery, hydro, imports, natural gas,
                        polygeneration, solar and wind
                      • Investigating electricity storage and smart grid
                        technologies


55
                   Medium-Term Supply Plan
     The period will see an overall supply requirement of 1,017 MW that includes 677 MW of
     load growth and the retirement or refurbishment of 340 MW of generation

                    ADDING SUPPLY                               RETIRING OR REFURBISHING SUPPLY
     Project             Fuel       MW       In-service     Project       Fuel     MW        Retire

     Meadow Lake         Gas           45          2015     Meadow Lake    Gas          45   2015
     capacity
     Replacement


     Renewables       e.g. wind,   294-344      2015-2022
                      hydro,
                      biomass

                                                            BD Unit #2     Coal         61   2016



                                                            BD Unit #5     Coal      139     2017



                                                            QE Unit #3     Gas          95   2017




     Total                         339-389                                           340




56
                   Long-Term Supply Plan

                          Long-term . . . 2023-beyond
     SaskPower’s          • Continued expansion of energy efficiency and
     long-term supply       demand response initiatives to deliver an
     plan involves          additional 200 MW of saved energy and the
     large-scale            related demand reductions
     options that are     • Pursuing new generation technologies
     currently
     undergoing           • Evaluating numerous supply options, including:
     detailed analysis.     biomass, carbon capture and sequestration,
                            cogeneration, compliant coal, heat recovery,
                            hydro, imports, natural gas, nuclear (small and
                            large), polygeneration, solar and wind




57
                        Long-Term Supply Plan
       The period will see an overall supply requirement of 1,985 MW that includes 410 MW of
       load growth and the retirement or refurbishment of 1,575 MW of generation

                ADDING SUPPLY                              RETIRING OR REFURBISHING SUPPLY
     Project    Fuel    MW     In-service   Project                     Fuel        MW         Retire


                                            BD Unit #6                     Coal          273   2023


                                            Meridian (PPA)                 Gas           228   2025


                                            Poplar River #2                Coal          291   2026


                                            Poplar River #1                Coal          291   2028


                                            NRGreen (PPA)                      HR         20   2027


                                            Cory (PPA)                     Gas           245   2028


                                            QE C - Plant                   Gas           228   2028


     Total                                                                           1,575




58
                         Planning Assumptions

     • Generation options under consideration for the medium- and long-term time
       frames are presented alphabetically, with the estimated busbar power cost

     • The busbar power cost is the expense of producing electricity to the point it
       leaves the plant

     • The "overnight" installed capital cost is the cost to build the power plant as if
       the project was completed overnight

     • For comparison purposes, the average cost of SaskPower generation at
       present is 5.78 ¢/kWh. This figure does not include costs for transmission or
       distribution




59
                             Future Supply Options


     Biomass (baseload power) — 6 to 11¢/kWh; 3,000 to 6,600 $/kW

                     Advantages                                  Disadvantages

     Favourable GHG regulatory treatment      Limited scale
     Renewable fuel source                    Cost
                                              Fuel supply risk
                                              Technology still developing
                                              Emissions other than GHGs




60
                              Future Supply Options


     Carbon capture and sequestration (baseload power) — 8 to 13¢/kWh;
     7,200 – 10,000 $/kW

                        Advantages                                       Disadvantages

     Potential low-cost electricity                      Demonstration project required that includes new
                                                         commercial arrangements; power plant
     Low air emissions
                                                         integration; and proving technology performance
     Avoids stranding (not using) existing coal assets
     Abundant Saskatchewan fuel source with stable       Regulations uncertain
     cost
     Enhanced Oil Recovery (EOR) creates spin-off        Non-renewable
     economic development




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                          Future Supply Options

     Coal compliant with present emissions guidelines (baseload power) —
     7 to 10¢/kWh; 4,300 to 5,700 $/kW

                     Advantages                                      Disadvantages

     Mature technology                               Emissions
     Abundant Saskatchewan fuel source with stable   Declining public acceptability
     cost
                                                     Regulatory risk - cost of licensing/permits
                                                     Non-renewable




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                           Future Supply Options


     Hydro - reservoir (peaking, intermediate, baseload power) — 7 to 10¢/kWh
           - run-of-river (baseload power) — 7 to 10¢/kWh; 3,000 to 6,000 $/kW
                      Advantages                                       Disadvantages

     Low GHG emitting                                  High construction costs
     No sulphur dioxide or nitrogen oxides emissions   Aquatic habitat and biodiversity impacts
     Low operating cost                                Northern location increases transmission
                                                       requirements and costs
     Proven technology                                 Natural and climate change induced water
                                                       availability risks
     Renewable




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                           Future Supply Options


     Imports - long-term (peaking, baseload power) — cost highly variable

                      Advantages                                      Disadvantages

     Low GHG emitting                                  Cost
     Proven technology                                 Natural and climate change induced water
                                                       availability risks
     Reliable                                          Non-Saskatchewan source
     No sulphur dioxide or nitrogen oxides emissions   Additional transmission required
     Renewable




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                           Future Supply Options

     Natural gas-fired generation - simple cycle gas turbine
     (peaking to baseload power) — cost not applicable for comparison due to low capacity
     factor

                        Advantages                                   Disadvantages
     Proven technology                              There are risks associated with availability and
                                                    cost of the natural gas supply
     Lower GHG emissions compared to conventional   It is difficult to capture CO2 from a gas turbine
     coal and no sulphur dioxide emissions          cycle
     Low capital cost                               Non-renewable
     Compact, simple and modular                    Low efficiency due primarily to the energy
                                                    required to compress the working fluid (air) and
                                                    the thermal losses in the flue gas exhausted to
                                                    the atmosphere




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                             Future Supply Options


     Natural gas-fired generation - combined cycle
     combustion turbine (intermediate to baseload power) — 8 to 13¢/kWh; 1,500 –
     2,400 $/kW

                       Advantages                                       Disadvantages
     Proven technology                                 There are risks associated with availability and
                                                       cost of the natural gas supply
     Lower GHG and nitrogen oxides emissions per       It is difficult to capture CO2 from a gas turbine
     unit of energy compared to simple cycle natural   cycle
     gas power stations
     Moderate capital cost                             Non-renewable
     Higher efficiency than simple cycle gas turbine   Less flexibility in operation compared to simple
                                                       cycle




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                             Future Supply Options

     Natural gas-fired generation - cogeneration (baseload power)
     — 7 to 12¢/kWh; 1,500 to 2,400 $/kW

                       Advantages                                        Disadvantages

     Proven technology                                  There are risks associated with availability and
                                                        cost of the natural gas supply
     Lower GHG and nitrogen oxides emissions per        It is difficult to capture CO2 from a gas turbine
     unit of energy compared to conventional natural    cycle
     gas-fired power stations
     Moderate capital cost                              Non-renewable
     Higher efficiency than conventional natural gas-   Need to balance electrical and process
     fired power stations                               steam/host requirements
     No sulphur dioxide emissions                       Requires industrial host to use steam




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                            Future Supply Options
     Nuclear (baseload power) — 8 to 10¢/kWh; 5,000 to 7,200 $/kW (includes allowance
     for decommissioning and interim fuel storage)

                       Advantages                                    Disadvantages
     Low air emissions                               Uncertainty surrounding costs, including those
                                                     incurred through decommissioning and long-term
                                                     spent fuel storage
     Abundant fuel source in Saskatchewan            Potential transmission upgrades required in
                                                     Saskatchewan and elsewhere
     Low operating cost                              Significant cooling water needs
     Up to 60 years of generation life               Long-term management required for spent fuel
                                                     storage
     Proven technology                               Social acceptability
                                                     Large unit sizes can be an issue for smaller grids
                                                     Length of time to construct
                                                     Demanding and complex regulatory environment
                                                     Non-renewable




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                            Future Supply Options


     Polygeneration (baseload power) — cost highly variable and project specific

                       Advantages                               Disadvantages

     Multi-product system                       Complex to develop due to multi-market
                                                participants
     Baseload supply                            Cost
     Low emissions                              Non-Saskatchewan fuel source
                                                Toxic byproducts
                                                Non-renewable




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                             Future Supply Options


     Solar (intermittent power) — 43 to 180¢/kWh; 7,000 to 13,000 $/kW

                       Advantages                                Disadvantages

     No GHG or other emissions from operations   Limited scale of capacity
     Renewable                                   Cost
     Off-grid applications                       The variable output creates system operational
                                                 issues that must be managed at an increased
                                                 cost
                                                 Solar is not dispatchable
                                                 Intermittent supply




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                            Future Supply Options

     Wind (intermittent power) — large: 6 to 10¢/kWh; 2,000 to 3,000 $/kW (150 MW or
     more); small: 12 to 22¢/kWh; 3,600 to 4,700 $/kW (1 MW to 10 MW); micro 27 to
     57¢/kWh; 4,000 to 10,000 $ kW (10 kW or less)

                      Advantages                                   Disadvantages

     Renewable                                     The variable output creates system operational
                                                   issues that must be managed at an increased
                                                   cost
     No GHG or other emissions from operations     Wind is not dispatchable
     Research on economic energy storage options   Potential risks to birds and bats
     continues
     Wind forecasting tools are evolving           Noise and aesthetics are concerns
                                                   Cost




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     Energy Efficiency
     and Conservation




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      Energy Efficiency at SaskPower Facilities

     • Recent rebuild of existing coal facilities improves efficiency by
       2%-3%

     • New natural gas generating stations are more efficient than earlier
       designs

     • Hydro optimization and efficiency improvements at E.B. Campbell
       and Island Falls hydroelectric stations

     • Updating line voltages and constructing new power lines results in
       lower line losses and more efficient transmission of energy




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                      Demand Side Management
     Reducing the need for generation
     • Demand side management focuses on energy efficiency, conservation and
       altering patterns of electricity use
     • Working with customers to reduce and adjust energy use lessens the overall
       demand for power
     • Load management programming will deliver 120 MW of peak demand
       reduction
     • By 2017, energy efficiency programming will deliver 100 MW of savings
        −   10-15% from industrial
        −   50-60% from commercial
        −   30-35% from residential
        −   Up to 10% from customer self-generation with renewables
     • SaskPower’s long-term target is a total of 300 MW of energy savings
     • Work is underway to determine additional capacity savings for the long term




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              Working With Our Customers

     SaskPower Eneraction       Homeowners
     is a portfolio of energy   • SaskPower delivers a variety of programs
     efficiency, load             aimed at increasing the use of energy
     management and               efficient products
     conservation programs         – Energy Star Furnace Motor and Air
     to help customers make          Conditioner Program
     informed decisions            – High Efficiency Lighting Program
     about what they can do        – The Residential Geothermal and Self-
     to reduce electrical            Generated Renewable Power Program
     consumption                     encourages smaller-scale, environmentally
                                     responsible generation




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                    Working With Our Customers
     Commercial/municipal/industrial customers
     • SaskPower’s Energy Performance Contracting Service is helping reduce energy-
       related operating costs through efficiency upgrades to health care, education, and
       office facilities

     • A commercial lighting program has been launched in partnership with electrical
       distributors, providing premium, high-performance energy efficient fluorescent
       lighting at the cost of standard equipment

     • This fall SaskPower will launch a retrofit program to assist municipalities reduce
       operating costs in ice rinks

     • A program to promote geothermal heating to commercial customers is underway

     • Development work has begun on an energy efficiency service for industrial
       facilities




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                 Working With Our Customers

     Demand Response
     • SaskPower is working on a program targeted at industrial customers to
       reduce the demand for electricity when requested by SaskPower
     • Demand Response initiatives are expected to offset 120MW peak demand

     Net Metering
     • Allows customers who generate their own electricity to feed excess power
       back to SaskPower’s system
     • Only environmentally friendly technologies are eligible
     • Provincial incentives available




77
       What it Means
     for Saskatchewan




78
                 Impacts of a Growing Economy
     Investing in Saskatchewan
     • SaskPower’s supply plan will deliver a modern, efficient, reliable and
       environmentally sustainable power system to the people of Saskatchewan

     • A stable supply of electricity is essential to help sustain the momentum of the
       provincial economy

     • Regardless of the supply options chosen, the costs associated with
       new/refurbished generation, transmission and distribution facilities will cause
       SaskPower’s expenses to increase

     • During the next decade, the current projected cost to fill SaskPower’s supply
       need while meeting regulatory requirements is $15 billion
        – SaskPower has firm plans for $8 billion of these capital expenditures, with action
          specific decisions pending on the remaining $7 billion

     • SaskPower will seek to minimize the impact of rate adjustments through
       conservation and productivity programs


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                                Closing Remarks
     • Saskatchewan’s short-term supply is secure and SaskPower is preparing
       for the medium and long terms
        − The necessary actions are already underway to ensure the appropriate infrastructure is
          in place to meet projected demand

     • Saskatchewan residents will benefit from a modern, efficient, reliable and
       environmentally sustainable power system, along with competitive rates
       today and into the future

     • Welcome input from the public and industry experts into the medium-term
       and long-term generation supply options

     • We are committed to an open, transparent supply planning process

     • As we have done for the past 80 years, SaskPower will work with the
       people of Saskatchewan to meet the province’s energy needs now and into
       the future



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