The New York Times reported today that American Electric Power has decided to put aside plans to build a full-scale carbon-capture plant at its Mountaineer coal-fired power plant in West Virginia because of inadequate economic and regulatory rationale.
The company has had operated a successful carbon capture pilot at the site for the last two years. The full-scale carbon-capture plant would have been operational in 2015 and would have captured and stored approximately 1.5 million metric tons of CO2 per year. It was intended to remove up to 90 percent of the CO2 from a 235 MWe portion of the power plant’s flue gas, according to AEP.
The Times reported that company officials were dropping plans for the full-scale plant, which would have cost $668 million, because they thought state regulators would not let the company recover costs by charging customers.
The $668 million price tag may seem high, but the Department of Energy had pledged to cover half of it. The remaining $334 million is nearly equal to AEP’s first-quarter 2011 earnings. The company expects to earn about $1.1 billion this year.
The chairman of AEP said “We are placing the project on hold until economic and policy conditions create a viable path forward.” But it’s not immediately apparent why the investment in carbon capture wouldn’t be “viable,” unless it simply fails to meet the company’s standard investment criteria. It would modestly depress the company’s profitability over the life the the plant. In exchange, the company, a major operator of coal-fired power plants, would be able to stake out a leadership position in carbon capture and sequestration.