Group of Eastern States Opened the First Carbon Auction Yesterday – History in the Making

Fri, 26 Sep 2008 13:39:28 -0400

Auction of Carbon Dioxide Emission Allowances Involves Participating States of the Regional Greenhouse Gas Initiative

Shaping up to be a state led effort, ten Eastern states yesterday launched the country's boldest effort yet to combat climate change, initiating a mandatory program designed to limit the amount of carbon dioxide that power plants can expel along the upper East Coast.

The Regional Greenhouse Gas Initiative (RGGI) opened with a landmark auction, accepting bids for permits that utilities must have for every ton of CO2 they emit from their carbon-heavy facilities.

It's the first required cap-and-trade program in the nation, imposed on 233 power plants, and supporters hope it will provide a model for a federal successor. Participating states stretch from Maine to Maryland.

And it’s attracting international attention. It's the first time that regulators are distributing nearly all of the pollution permits, called allowances, through auctions, unlike the European program, which was criticized for being excessively friendly to polluters when it awarded allowances for free. Under RGGI, nearly all of the auction revenue will be used for energy efficiency programs, a move intended to soften increased electricity costs sparked by the program.

The utilities in the 10 states have three years to collect enough allowances to match their emissions. And there are plenty of auctions in which they can bid on the permits -- four every year. Or they could tap into the secondary market and buy allowances from traders.

For now, the program is laying the infrastructure that could be used by groups considering their own cap-and-trade programs in the Midwest and West. And it could fuel action in Congress.

I applaud the RGGI group for their proactive leadership on the issue – one that sadly, the current administration, should have taken. Let’s hope we can get federal leadership with our new President leading the way.

Enviance Customer, American Electric Power (AEP), Making Headlines This Week

Fri, 05 Sep 2008 14:51:47 -0400

Installation of the world's first carbon capture and sequestration (CCS) system on a large, existing coal-fired power plant.

AEP, one of the nation's biggest electric power producers, is pushing the envelope once again. With the financial backing and vision to get big things done, they are installing the world's first carbon capture and sequestration (CCS) system on a large, existing coal-fired power plant. They are confident operations will begin in 2009.

Michael Morris, CEO of AEP said, “This technology is going to save the existing [coal] fleet and save the American electrical consumer trillions of dollars." He believes the U.S. coal fleet can have carbon capture and storage operational by 2015, a full decade before some climatologists warn all coal plants must stop spewing greenhouse gases or be shut down to prevent environmental catastrophe.

The technology Morris is referring to is a new chilled ammonia process developed by Alstom, a Paris-based maker of integrated power plants. Hopefully, the process will be able to grab carbon dioxide from a belching power plant stack at low cost and without sapping massive amounts of electricity -- the main barrier for existing models.

A government document from the Department of Energy cast doubt on the technology , but that is not stopping Morris from trying it on AEP's 1,300-megawatt Mountaineer plant in West Virginia and shooting the captured gas 2 miles underground on-site. Initially, the process will grab about 1 percent of the plant's C02 output, equivalent to 20 megawatts.

One problem: if Congress imposes a tight carbon emissions reduction regime before CCS technology is ready, the result could be very negative. It would force AEP to shut coal plants and buy electricity from outrageously expensive alternatives, according to Morris. It could kill the U.S. economy, he says.

Many would disagree with his assessment. Supporters of an extra-tough cap-and-trade bill say that a similar scheme worked to control acid rain and that the United States and the world can't afford to watch polar ice caps melt because of global warming.

Other activists are saying that American Electric Power needs to invest more in alternative energy, but Morris estimates that coal plants fitted with carbon capture technology will be much cheaper for his customers than power generated from wind and solar farms.

If Mountaineer is a success, the company will take the technology to a coal-fired unit in Oologah, Okla., in 2012 and try to capture 50 percent of the carbon dioxide there for use in enhanced oil recovery. Then, Morris said, he will begin retrofitting the largest generators in his fleet.

My opinion? The technology definitely needs to be tested and AEP seems to be the best company to do it. I applaud their efforts and vision to do more to address the global warming issue. We’re pleased that the Enviance System can help them with this massive project, as it no doubt will.

EHS Industry Solutions | Enviance Blogsite

Group of Eastern States Opened the First Carbon Auction Yesterday – History in the Making

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Enviance Customer, American Electric Power (AEP), Making Headlines This Week

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