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AEP, Southern Co., Summit Texas to Get $3B in Federal Funding for CCS Demos

The U.S. Energy Department last week said it would fund three carbon capture and storage (CCS) projects with a value of $3.18 billion to accelerate their development: American Electric Power’s (AEP’s) proposed Mountaineer demonstration project; Southern Co.’s Plant Barry demonstration in Alabama; and Summit’s Texas Clean Energy Project in Midland-Odessa.

The investment of up to $979 million, including funds from the American Recovery and Reinvestment Act, will be leveraged by more than $2.2 billion in private capital cost share as part of the third round of the department’s Clean Coal Power Initiative (CCPI), the DOE said.

The projects were selected because they made progress toward a target CO₂ capture efficiency rate of 90% as well as toward a goal to increase electricity costs less than 10% for gasification systems and less than 35% for combustion and oxycombustion systems. All the projects could potentially capture and sequester more than 300,000 metric tons of CO₂—as required by the CCPI, the agency said.

The CCPI Round III was created in 2005 to reduce the time it would take would take for low-emission coal technologies to be ready for commercial use. The awards are the second installment of projects awarded under that round. Two projects were previously selected under CCPI Round III in July 2009 to receive $408 million in DOE funds: Basin Electric Power Cooperative North Dakota postcombustion CO₂capture project and Hydrogen Energy International’s California project for full capture using an “advanced” integrated gasification combined-cycle plant.

The Round III project selections announced last week included:

AEP’s Mountaineer Carbon Dioxide Capture and Storage Demonstration:

AEP plans, by 2015, to design, construct and operate a chilled ammonia process that is expected to effectively capture at least 90% of the CO₂ (1.5 million metric tons per year) in a 235-MW flue gas stream at the existing 1,300-MW Appalachian Power Company (APCo) Mountaineer Power Plant near New Haven, W.Va. The captured CO₂ will be treated, compressed, and then transported by pipeline to proposed injection sites located near the capture facility. During the operation phase, AEP plans to permanently store the entire amount of captured CO₂ in two separate saline formations located approximately 1.5 miles below the surface. The project team includes AEP, APCo, Schlumberger Carbon Services, Battelle Memorial Institute, CONSOL Energy, Alstom, and an advisory team of geologic experts. (DOE share: $334 million; project duration: 10 years)

AEP said in a statement that it would immediately begin negotiating terms with the DOE to receive $334 million to assist with the installation of the chilled ammonia. The funds requested by AEP were about half of the estimated cost of the system. The company disclosed that it was also in discussions with other potential international partners for the project.

AEP and Alstom began operating a smaller-scale validation of the technology in September at the Mountaineer plant. That system captures up to 90% of the carbon dioxide from a slipstream of flue gas equivalent to 20 MW of generating capacity. The captured carbon dioxide, more than 100,000 tons a year, is being 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, AEP said.

Southern Co.’s Carbon Capture and Sequestration Demonstration:

Southern Co. Services (SCS) will retrofit a CO₂ capture plant on a 160-MW flue gas stream at an existing coal-fired power plant, Alabama Power’s Plant Barry, located north of Mobile, Ala. The captured CO₂ will be compressed and transported through a pipeline, and up to one million metric tons per year of CO₂ will be sequestered in deep saline formations. SCS will also explore and utilize potential opportunities for beneficial use of the CO₂ for enhanced oil recovery. In addition to SCS, the project team includes Mitsubishi Heavy Industries America, Schlumberger Carbon Services, Advanced Resources International, the Geological Survey of Alabama, EPRI, Stanford University, the University of Alabama, AJW Group, and the University of Alabama at Birmingham. (DOE share: $295 million; project duration: 11 years)

Texas Clean Energy Project (TCEP):

Summit Texas Clean Energy, LLC will integrate Siemens gasification and power generating technology with carbon capture technologies to effectively capture 90% of the carbon dioxide (2.7 million metric tons per year) at a 400-MW plant to be built near Midland-Odessa, Texas. The captured CO₂ will be treated, compressed and then transported by CO₂ pipeline to oilfields in the Permian Basin of West Texas, for use in enhanced oil recovery operations. The Bureau of Economic Geology at the University of Texas will design and ensure compliance with a state-of-the-art CO₂ sequestration monitoring, verification and accounting program. (DOE share: $350 million; project duration: 8 years)

Sources: DOE, AEP