Canada’s national grid draws more than 80% of its power from emissions-free sources – a category encompassing everything from nuclear to hydropower to wind power. By comparison, the U.S. grid is under 40% emissions-free, providing Canada with a durable competitive advantage as the world looks to reduce carbon emissions and build up a low-carbon economy.
This remarkable Canada-wide figure is set to climb to 90% by 2030, due to a federal phase-out of traditional coal-fired electricity that will cut carbon pollution by an estimated 12.8 million tonnes. Coal-reliant provinces like Alberta, Saskatchewan and Nova Scotia will need to find replacement sources of electricity, and fast.
For the southern Saskatchewan town of Estevan, coal has been king since the town’s founding. Often referred to as “Energy City,” the area around the town is home to a coal mine that feeds multiple local coal-fired power plants. With an economic transition away from coal now looking all but inevitable over the next decade or so, some entrepreneurs are looking to tap another local energy source lying underneath the ground: geothermal energy.
The most popular method for harnessing geothermal energy involves the use of steam from hot water located under the earth’s surface to spin a turbine to generate electricity. Unlike other countries located along the hot-earth zone known as the Pacific Rim of Fire, Canada has been slow to tap this nascent emissions-free source of electricity.
But things are looking rosier for the geothermal industry of late, with a private Saskatchewan company, DEEP, currently building the country’s first geothermal power plant outside of Estevan.
The company has already completed drilling the 3,530 metre test well, which will eventually generate five megawatts of power from the hot sedimentary aquifer below. That’s enough electricity to power 5,000 homes and offset 27,000 tonnes of carbon dioxide a year, according to DEEP.
Slated to begin operations in 2021, the project will create 100 jobs during construction. Even more excitingly, the power plant has the potential to steadily expand outwards. It will eventually generate up to 200 megawatts of clean power and create more jobs in the future. Many of the same skillsets used in the oil and gas sector overlap significantly with geothermal development, offering substantial employment opportunities for workers looking to transition out of the volatile oil and gas sector.
The project was able to move forward after SaskPower announced a power purchase agreement with DEEP in 2017 that established a set purchase price for the plant’s electricity. The province also needed to introduce a new permitting structure to even allow for geothermal drilling to begin. Both the province and the federal government have also provided targeted support to get the project off the ground, including a $25.6 million federal investment in early 2019.
As the project moves closer to completion, DEEP is also looking into the possibility of using the still-hot waste water generated for heating local greenhouses and other businesses. There’s also the potential for extracting valuable rare earth elements and precious metals from geothermal brines.
Like all of us, Estevan looks to an uncertain future. By finding the opportunity in the transition to a low-carbon economy, it seems as if the town might be able to proudly keep its title as Energy City after all.