AEP suspends carbon capture and storage plant in the US – Stantec awarded $30 million CAD carbon capture and storage contract in Saskatchewan

In a blow to proponents of clean coal technology and the prospects for carbon capture and storage (CCS) in the United States, American Electric Power (AEP) has decided to suspend plans to build a commercial-scale carbon-capture plant at its Mountaineer coal-fired generating facility in West Virginia. AEP, which for nearly two years had been successfully testing a chilled ammonia system provided by Alstom Power at the Mountaineer plant, said that the decision to terminate its agreement with the U.S. Department of Energy was based on the uncertain status of U.S. climate policy and the weak US economy.

The commercialization of CCS technology is vital if owners of coal-fueled generation in the US are to comply with potential future climate regulations without prematurely retiring efficient, cost-effective generating capacity. The problem AEP is facing is that as a regulated utility in the US, it is impossible for AEP to get regulatory approval to recover their share of the costs for validating and deploying the CCS technology without US federal requirements to reduce greenhouse gas emissions already in place. The uncertainty in the US regarding greenhouse gas emissions also makes it difficult for utilities like AEP to attract partners for financing.

Meanwhile, in Canada, SaskPower continues to move forward with the $1.24 billion CAD Boundary Dam Integrated Carbon Capture and Storage Demonstration Project in southern Saskatchewan. The Boundary Dam Project which will be among the first commercial-scale carbon capture and storage facilities in the world when it begins operating in 2014.

On July 15, 2011 SaskPower announced the award of a $30 million CAD contract to Stantec to provide engineering consulting services during the design and construction phase of the Boundary Dam Integrated Carbon Capture and Storage Demonstration Project.

Stantec is one of several major firms involved in the Boundary Dam project in Saskatchewan, which will see Unit 3 at Boundary Dam Power Station rebuilt and equipped with a fully-integrated carbon capture system that will reduce greenhouse gas emissions by one million tonnes per year. SaskPower approved the Boundary Dam project earlier this year and construction started in April, 2011. The new generating unit at Boundary Dam will have 110 MW of capacity. Carbon dioxide (CO2) captured at Boundary Dam will be sold for enhanced oil recovery operations. Sulfur dioxide (SO2) will also be captured and sold to manufacturers of sulfuric acid.