American Electric Power Drops Carbon Capture Project

COLUMBUS, Ohio, July 15, 2011 (ENS) – One of the largest U.S. electric utilities has dropped its carbon dioxide capture and storage project, citing the “current uncertain status of U.S. climate policy and the continued weak economy” as contributors to the decision.

American Electric Power has terminated its agreement with the U.S. Department of Energy for funding of a commercial-scale carbon dioxide capture and storage facility at its coal-fueled Mountaineer power plant in New Haven, West Virginia.

The process is based on capturing the greenhouse gas carbon dioxide, CO2, and storing it in such a way that it does not enter the atmosphere, where it acts as a blanket, trapping the heat of the Sun close to the planet.

Demonstration-scale carbon capture and storage facility at American Electric Power’s Mountaineer power plant (Photo courtesy Alstom)

“We are placing the project on hold until economic and policy conditions create a viable path forward,” said Michael Morris, AEP chairman and chief executive officer.

Congressional inaction on climate change has reduced APE’s motivation to take on the project.

“We are clearly in a classic ‘which comes first?’ situation,” Morris said.

“The commercialization of this technology is vital if owners of coal-fueled generation are to comply with potential future climate regulations without prematurely retiring efficient, cost-effective generating capacity,” he said.

But on the other hand, Morris explained, “As a regulated utility, it is impossible to gain regulatory approval to recover our share of the costs for validating and deploying the technology without federal requirements to reduce greenhouse gas emissions already in place.”

The uncertainty also makes it difficult to attract partners to help fund the industry’s share, he said.

AEP and partner Alstom, a specialist in power plant CO2 capture processes, began operating a smaller-scale validation of the technology at the plant in October 2009, the first fully-integrated capture and storage facility in the world.

That system captured up to 90 percent of the CO2 from a slipstream of flue gas equivalent to 20 megawatts of generating capacity and injected it into geologic formations for permanent storage 1.5 miles below the surface of the Earth.

The validation project, which received no federal funds, was closed as planned in May after meeting project goals. It captured more than 50,000 metric tons of CO2 and permanently stored more than 37,000 metric tons of CO2.

Michal Morris (Photo courtesy AEP)

“With the help of Alstom, the Department of Energy and other partners, we have advanced CCS technology more than any other power generator with our successful two-year project to validate the technology,” said Morris. “But at this time it doesn’t make economic sense to continue work on the commercial-scale CCS project beyond the current engineering phase.”

In 2009, AEP was selected by the Department of Energy to receive funding of up to $334 million through the Clean Coal Power Initiative to cover part of the cost of a commercial-scale CCS system at Mountaineer.

The system would capture at least 90 percent of the carbon dioxide from 235 megawatts of the plant’s 1,300 megawatts of generating capacity.

The captured CO2, some 1.5 million metric tons per year, would be treated and compressed, then injected into geologic formations for permanent storage 1.5 miles below the surface.

Plans were for the project to be completed in four phases, with the system to begin commercial operation in 2015.

AEP has informed the Energy Department that it will complete the first phase of the project – front-end engineering and design, development of an environmental impact statement and development of a detailed Phase II and Phase III schedule – but will not move to the second phase.

Morris said, “The lessons we learned from the validation project were incorporated into the Phase I engineering for the commercial-scale project.”

The Department of Energy’s share of the cost for completion of the first phase is expected to be $16 million, half the expenses that qualify under the DOE agreement.

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