Big utility puts carbon capture technology to the test

NEW HAVEN, W.Va. -- At the Mountaineer power plant, more than 10,000 tons of coal are pulverized to a fine powder each day and combusted inside the fiery inferno of one of the biggest boilers on earth.

Nestled in the hills along the Ohio River's winding banks, this was a state-of-the-art coal burner when American Electric Power put it online in 1980. Thirty years and $650 million in air pollution control retrofits later, the 1,300-megawatt behemoth is still shiny and new compared to much of the utility's aging fleet.

Now it is poised for another facelift: reducing its 8.5 million metric tons of annual CO2 emissions in what will be a first attempt to both capture and sequester carbon from an existing U.S. coal plant at any significant scale.

As Congress debates putting a cap on carbon, the fate of existing coal burners looms large over utilities. Unwilling to lose billions in investments -- AEP alone has sunk more than $4 billion into air pollution scrubbers required by the Clean Air Act -- companies say they have no intention of retiring their current fleets anytime soon.

Carbon capture and sequestration (CCS) demonstration projects like the one slated for the Mountaineer plant are, experts say, vital to keeping their plants running while meeting a long-term cap.

"If we're going to keep the existing fleet operating, the ability to retrofit becomes increasingly important," said Sarah Forbes, a CCS expert with the World Resources Institute, a nonpartisan think tank.

Projections bear this out. Today, more than 300 gigawatts of coal-fired power units produce about a third of total U.S. greenhouse gas emissions, according to the Department of Energy. And even though today's average unit is about 40 years old, plants on the ground today will still be responsible for 80 percent of coal-based emissions in 2030, DOE projects. New plants will round out that number as the nation's coal-generating capacity grows to more than 400 GW.

AEP to coal: We just can't quit you

AEP especially, as the nation's largest coal burner at 77 million tons a year, has a lot at stake.

Michael Morris, AEP's CEO and chairman, foresees replacing only the oldest and dirtiest-burning of today's plants in favor of new units optimized for carbon capture.

"We will be stretching the lifetime of our existing fleet," he said. "It would be senseless to retire those plants because they are unable to address the issue of carbon."

The utility is expanding its renewable portfolio and its natural gas base. It faces litigation from environmental groups, and fossil fuels are in for an uncertain future. But none of that has convinced the company to quit coal. In 2017, the company projects, coal will still be 59 percent of its energy mix, down just slightly from 66 percent now.

"AEP will always be the nation's largest coal-fired generator," Morris said. "I think that the sooner we get the technology proven, the larger the worldwide demand will be."

That continued demand for coal is important to people in AEP's eastern region, which includes the coal mining and manufacturing states of Indiana, Kentucky, Michigan, Ohio, Tennessee, Virginia and West Virginia and is accustomed to some of the cheapest electricity rates in the country.

Yet only a handful of planned demonstrations -- globally, there are about 20 in various stages of progress -- will set the bar for exactly when and where CCS technology is deployed.

"There's an urgent need to demonstrate. I feel like it is proceeding quickly, but in the context of climate change, we need to move even faster," Forbes said.

Preparing to go commercial by 2015

Some are casting a wary eye on even those few. Bruce Nilles, who opposes all new coal-fired plants as head of the Sierra Club's Beyond Coal Campaign, is skeptical that carbon capture will be technically or economically feasible. He argued that rather than pursue expensive CCS plant-prolonging projects, utilities should be turning to cheaper and cleaner wind and natural gas generation.

Meanwhile, the company and its partners, including the technology's developer, Alstom Power, are optimistic about the prospects for post-combustion CCS, which describes the idea of capturing CO2 after the coal is burned -- the only option for most existing plants.

Both companies say they will be able to replicate the technology commercially by 2015. This will be after AEP has built a second, 235 MW commercial-scale capture plant on the Mountaineer site and after Alstom has tested the technology at a similar scale in partnership with Norwegian gas and oil company Statoil. Meanwhile, other major coal utilities, like Southern Co. and Duke Energy, will be trying out different technologies in parallel.

In many ways, the Mountaineer plant itself -- where the Statue of Liberty could fit inside the boiler unit -- was chosen because it provides a best-case scenario for how a CCS power plant retrofit might work.

The great mysteries of carbon storage

This whole lineup requires a few key resources that Mountaineer happens to have: scrubbers, space, steam and a stroke of geological luck. Its benefits also demonstrate the challenges in store for removing and sequestering carbon at all plants.

For the current Mountaineer setup, the process works like this: First, the gas is treated by chemical plants -- at Mountaineer they are as big as the electric generating unit itself -- to remove air pollutants such as sulfur dioxide and particulates from the flue gas, which also happen to poison the carbon capture reaction. This will rule out replicating carbon capture at some of AEP's oldest and most inefficient units, which will never get scrubbers. These will likely be retired.

Next, a small stream of the scrubbed gas is siphoned towards the newly built carbon plant. It sits between the sulfur dioxide scrubbers and the cooling tower, and itself has an enormous footprint that's bigger than a football field.

In fact, company engineers say that a lack of space available at some plants already brimming with add-ons and without room to expand will in some places prohibit carbon capture. Mountaineer happens to have a large, green field of empty space.

At the capture plant, the gas is cooled and run over chilled ammonia, which absorbs 90 percent of the CO2, before the now low-carbon stream is sent back out the smokestack. Now left with a carbon-soaked ammonia sponge, the slurry is reheated to release the CO2, and the ammonia gets recycled for another round. This process uses steam siphoned from the power cycle. If too much steam is required, however, the plant operations could become unstable, another potential limitation of the technology.

Next, the isolated CO2 gas is cleaned and compressed to very high pressures as it moves through 1,200 feet of pipeline. Because long CO2 transport pipelines don't exist in many areas and are expensive to build, CCS is today much more viable where the right underground storage sites exist at or near the plant property. At Mountaineer, AEP had already installed an injection well to test the geology.

The last step is to pump the CO2 into two deep aquifers, 1 1/2 miles below the property, where it is trapped under overlying rock. This part -- to the company, to nearby property owners, and to state and federal regulators -- is the biggest unknown in the entire process.

Right now, there are no clear rules to govern who is responsible for making sure the carbon dioxide stays underground and for how long, who will pay if something goes wrong, and what happens when the CO2 migrates beneath nearby properties.

The burden of costs

"Permitting is the biggest headache. You've got to establish something that doesn't create death by 1,000 cuts of regulation," said Bruce Braine, AEP's vice president of strategic policy analysis.

There also may be public opinion problems. Recently, nearby residents opposed and stopped a carbon sequestration test project in Ohio.

But in the end, the biggest hurdles are not technical or even regulatory. They are the huge costs of CCS, measured both in energy and dollar units.

At full commercial scale, Alstom says its chilled ammonia technology will need 15 percent of a power plant's total electricity production to run. This, the company says, will be a big improvement over the 30 percent energy needed by amine scrubbers, a carbon capture technology that is used for natural gas production today.

Still, for the entire Mountaineer plant, 15 percent of its power would still be 195 MW that no longer makes it to the grid. AEP would bear the cost of replacing this by building new generation capacity elsewhere.

There is still more progress that can be made. Further advances to cut the massive amount of energy to compress CO2 or ring out better efficiencies from the process might save even more energy, said Sean Black, post-combustion CCS product manager at Alstom.

An even bigger issue is the looming cost of capturing carbon. And there is a long way to go before it drops.

In regulated electricity markets, this cost will mostly be passed down to consumers in the form of higher rates. DOE's goal is that commercial post-combustion CCS should not raise the cost of producing electricity more than 35 percent. Yet existing off-the-shelf technologies right now translate into nearly a 100 percent increase, said Jared Ciferno, existing plant technology manager at DOE's National Energy Technology Laboratory.

Linking CCS to the carbon markets

The price tag of building CCS retrofit projects is also substantial. In August, AEP applied to DOE for a $334 million grant to fund just half the costs of the 235 MW Mountaineer project.

Right now, at the demonstration level, CCS costs more than $100 per ton of carbon, far more than projected carbon prices will reach anytime soon under cap-and-trade legislation. While technology experts expect the costs to drop by as much as half or more as it becomes widely deployed, how quickly that will happen is less certain.

To sweeten incentives for CCS beyond a straight carbon price, the House-passed Waxman-Markey bill provides $1.1 billion a year for research and hands out billions of dollars in free allowances to early adopters. Morris said that as soon as legislation is passed -- with a carbon price and the incentives -- the company will have all the push it needs to move ahead on its deployment plans, subject to approval by state utility regulators.

Ultimately, though, the decisions on how many and how quickly plants will be retrofitted depend on where the price for CCS meets the emissions reduction time frames and targets that get packed into climate legislation. As the bill moves in the Senate, these numbers are still a moving target, and many utilities, AEP included, are lobbying for more time in early years of the program.

"The economics of CCS and the economics of the [carbon] market are going to have to be linked," said AEP Vice President Braine.

Meanwhile, back at Mountaineer, inside the plant's central control room, walls filled with gauges monitor everything that happens inside. One small arrow amid them all reads "10.95%." That is how much CO2 is in the gas leaving the smokestack.

All of that money and all of the new equipment outside are for reaching one goal: to get that down to nearly zero.