Uncaptured carbon: A planned tenfold scale-up of carbon capture at this West Virginia power plant is on hold until stronger policy incentives arrive.
American Electric Power’s recent decision to scrap plans to capture and sequester carbon dioxide at a West Virginia power station is just the latest in a string of cancellations of carbon capture and storage (CCS) projects. The moves have dimmed the prospects for carbon-free power generation from coal. However, a handful of CCS projects are moving forward—including one in Mississippi that broke ground in December—so it might be too early to completely write off the technology.
The U.S. Department of Energy’s goal is to start five to 10 large CCS projects within the next five years. The DOE believes those projects could drive down the cost of CCS, which currently boosts generation costs by at least 44 percent—but the incentives it’s offering have clearly not been sufficient to entice utilities. Low natural-gas prices have eroded coal’s cost advantage, while a national policy to penalize carbon-dioxide emissions has yet to materialize. As a result, utilities have been unwilling to pursue CCS, even with the DOE footing half the bill. “The federal incentives offered to move the technology forward just aren’t working,” says Kurt Waltzer, a carbon storage expert with the Clean Air Task Force, a nonprofit environmental consulting firm based in Boston.
For example, Columbus, Ohio-based AEP walked away from a $334 million federal grant to cover half of its proposed CCS installation. The plan was to capture at least 90 percent of the carbon dioxide from a portion of the flue gases at its 1,300-megawatt power plant in New Haven, West Virginia. The 1.5 million tons per year of captured carbon dioxide was to be permanently stored in geologic formations below the plant. But expected supports did not come through. The U.S. Senate rejected a cap-and-trade bill last year (AEP supported the legislation), while Virginia and West Virginia’s public utility commissions refused to pass along all of AEP’s costs to ratepayers.
Basin Electric cited cost as a primary factor in its December decision to walk away from a similar CCS retrofit. The Bismarck, North Dakota-based rural electricity cooperative had secured $100 million in DOE funding for a $287 million project to capture a million tons of carbon dioxide annually at its coal-fired power station in Antelope Valley, North Dakota.
Utilities moving forward with CCS projects are closing the gap by selling their carbon dioxide to enhanced oil recovery operations, which inject carbon dioxide into oil wells to help push more oil to the surface. Such operations currently provide about 5 percent of U.S. domestic oil production, and could ultimately double U.S. oil reserves, according to a report last year by MIT’s Energy Initiative.