AEP pulls plug on project to capture and store carbon dioxide from coal-fired power plant

American Electric Power Co. announced today that it is canceling a federallly funded project to commercialize the technology of capturing and storing carbon dioxide from coal-fired power plants. The announcement is "a major setback to a technology that is seen as key to fighting climate change," Gabriel Nelson of Environment & Energy News reports. "Other plants are being equipped with carbon capture technology, but few projects are as far along or ambitious as AEP's project." (Read more, subscription required)

AEP said in a news release that its work on carbon capture and storage is "on hold" and cited "the current uncertain status of U.S. climate policy and the continued weak economy as contributors to the decision." It said the project at its Mountaineer plant in New Haven, W.Va., had reached a new phase, expanding it to most of the plant's capacity and pumping carbon dioxide underground, and "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." (Read more)

"Utility commissions in West Virginia and Virginia balked at the suggestion of passing the cost of a CCS retrofit through to ratepayers," Jean Chemnick of E&E reports, citing John Coequyt, the Sierra Club's senior climate and energy representative. "The problem is keeping new coal-fired electric generation from being built in states across the country, he said, because regulators are concerned that they will eventually require costly carbon retrofits. . . . He added that AEP might have timed its announcement to come in advance of EPA's proposed power-plant standards," due by Sept. 30. "Luke Popovich, a spokesman for the National Mining Association, said AEP's decision showed the shrinking appetite for capping carbon emissions in today's economic climate. Instead of retrofitting with costly technologies like CCS, he said, regulators should consider the improvements to emissions that could be achieved through efficiency upgrades and other means, like gasification." (Read more, subscription required)