AEP to Apply for Stimulus Funds to Advance Carbon Dioxide
Capture and Storage to Commercial Scale
American Electric Power (NYSE: AEP) will
apply for funding from the U.S. Department of Energy Clean Coal Power
Initiative Round 3 to pay part of the costs of installing the nation's first
commercial-scale carbon dioxide capture and storage system on its Mountaineer
coal-fired power plant in New Haven, W.Va.
AEP's application
will seek $334 million, about half the estimated cost of installing the system
that will use a chilled ammonia process to capture at least 90 percent of the
carbon dioxide from 235 megawatts of the plant's 1,300 megawatts of capacity.
The captured carbon dioxide, approximately 1.5 million metric tons per year,
will be treated and compressed, then injected into suitable geologic formations
for permanent storage approximately 1.5 miles below the surface. The system
will begin commercial operation in 2015, according to the company's application
for funding.
"Commercialization of carbon capture
and storage technology is an essential component in a successful climate
strategy for this nation, which relies on coal-fired generation for about half
of its electricity supply," said Michael G. Morris, AEP's
chairman, president and chief executive officer. "Coal is a low-cost,
abundant domestic fuel source, but its use is a significant source of carbon
dioxide emissions.
"First-movers like AEP who push the
commercialization of technology will face higher costs than those who wait for
others to act, costs that would be borne by our customers," Morris said.
"But without efforts like ours, the availability of solutions for reducing
carbon dioxide emissions from coal-fired power plants will be needlessly
delayed. It's an appropriate use of federal stimulus funds to spur the advancement
of this technology and to offset the financial penalty facing our customers and
our company for taking the initiative."
For this commercial-scale project, AEP is
forming a diverse technical advisory committee that includes recognized experts
in the field of geologic carbon dioxide storage. This group will include
participants from Schlumberger Limited, Battelle Memorial Institute, Lawrence
Livermore National Laboratory, Massachusetts Institute of Technology, The Ohio
State University, West Virginia University, The University of Texas, Ohio
Geological Survey, CONSOL Energy, and the West Virginia Department of Commerce
Division of Energy. Additionally, Schlumberger will work directly with AEP to
design and deploy the carbon dioxide storage system at Mountaineer.
AEP and Alstom
will begin operating a smaller-scale validation of the technology in September
at the Mountaineer plant. That system will capture up to 90 percent of the
carbon dioxide from a slipstream of flue gas equivalent to 20 megawatts of generating
capacity. The captured carbon dioxide, more than 100,000 tons a year, will be
compressed and injected into suitable geologic formations for permanent storage
approximately 1.5 miles below the surface.
No federal funds are being used for the
validation project.
American Electric Power is one of the
largest electric utilities in the
This report made by American Electric
Power and its Registrant Subsidiaries contains forward-looking statements
within the meaning of Section 21E of the Securities Exchange Act of 1934.
Although AEP and each of its Registrant Subsidiaries believe that their
expectations are based on reasonable assumptions, any such statements may be
influenced by factors that could cause actual outcomes and results to be
materially different from those projected. Among the factors that could cause
actual results to differ materially from those in the forward-looking
statements are: electric load and customer growth; weather conditions,
including storms; available sources and costs of, and transportation for, fuels
and the creditworthiness and performance of fuel suppliers and transporters;
availability of generating capacity and the performance of AEP's
generating plants; AEP's ability to recover
regulatory assets and stranded costs in connection with deregulation; AEP's ability to recover increases in fuel and other energy
costs through regulated or competitive electric rates; AEP's
ability to build or acquire generating capacity (including the ability to
obtain any necessary regulatory approvals and permits) when needed at
acceptable prices and terms and to recover those costs (including the costs of
projects that are canceled) through applicable rate cases or competitive rates;
new legislation, litigation and government regulation, including requirements
for reduced emissions of sulfur, nitrogen, mercury, carbon, soot or particulate
matter and other substances; timing and resolution of pending and future rate
cases, negotiations and other regulatory decisions (including rate or other
recovery of new investments in generation, distribution and transmission
service and environmental compliance); resolution of litigation (including
disputes arising from the bankruptcy of Enron Corp. and related matters); AEP's ability to constrain operation and maintenance costs;
the economic climate and growth or contraction in AEP's
service territory and changes in market demand and demographic patterns; inflationary
and interest rate trends; volatility in the financial markets, particularly
developments affecting the availability of capital on reasonable terms and
developments impacting AEP's ability to refinance
existing debt at attractive rates; AEP's ability to
develop and execute a strategy based on a view regarding prices of electricity,
natural gas and other energy-related commodities; changes in the
creditworthiness of the counterparties with whom AEP has contractual
arrangements, including participants in the energy trading markets; actions of
rating agencies, including changes in the ratings of debt; volatility and
changes in markets for electricity, natural gas, coal, nuclear fuel and other
energy-related commodities; changes in utility regulation, including the
implementation of the recently passed utility law in Ohio and the allocation of
costs within regional transmission organizations; accounting pronouncements
periodically issued by accounting standard-setting bodies; the impact of
volatility in the capital markets on the value of the investments held by AEP's pension, other postretirement benefit plans and
nuclear decommissioning trust and the impact on future funding requirements;
prices for power that AEP generates and sells at wholesale; changes in
technology, particularly with respect to new, developing or alternative sources
of generation; and other risks and unforeseen events, including wars, the
effects of terrorism (including increased security costs), embargoes and other
catastrophic events.
SOURCE American Electric Power
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