March 5, 2009 / 6:45 PM / 11 years ago

AEP CEO says coal plants must be retrofitted

SANTA BARBARA, California (Reuters) - U.S. utilities will have to retrofit their fleets of coal-fired power plants to capture greenhouse gas emissions, while the nation adds more renewable, nuclear and other clean power sources to satisfy electricity demand, the chief executive of American Electric Power Co Inc said on Thursday.

AEP, the United States’ largest burner of coal for power generation, plans to retrofit its coal plants, retiring some of the oldest, to comply with an expected federal mandate for utilities to cut their carbon dioxide emissions.

“I’m an absolute believer that we need to retrofit the existing fleet while we move to energy efficiency, renewables, new nuclear,” CEO Michael Morris said in an interview on the sidelines of the Wall Street Journal ECO:nomics conference in Santa Barbara, California. “Then, ultimately, you retire the existing fleet.”

Coal-fired electricity generation cannot simply be taken offline at once, Morris said.

“I get frustrated at the notion of ‘shut them down now,’” he said. “You shut them down now, you think the U.S. economy is hurting now? You won’t even recognize the U.S. economy.”

AEP is testing a chilled ammonia carbon capture and storage technology, sometimes called “clean coal,” at a small facility in West Virginia. It plans to have a commercial-scale system in place by 2012, Morris said.

But expanding that technology to all of its coal-fired plants will be expensive.

Running a machine to strip out carbon dioxide will use up about 10 percent to 15 percent of a power plant’s electricity, Morris said. That, combined with the cost of designing and building the plant, could add 40 percent to the cost of energy.

And under a cap and trade system, “you are both buying credits in the market and deploying technology — you are probably raising energy costs by 100 percent,” he said.

In that scenario, AEP would likely seek to retire its older coal plants, which were built in the 1930s, he added.

Columbus, Ohio-based AEP delivers electricity to more than 5 million customers in 11 states.

Editing by Andre Grenon

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