AEP: Carbon Capture and Storage Harvard Case Solution & Analysis

By October 2010, American Electric Power, the biggest coal-fired, electric utility in the United States, had been operating a carbon capture and sequestration pilot plant for one year. Using a proprietary, Alstom cooled ammonia technology, AEP sequestering and was catching 90% of the carbon dioxide in a small waste stream at its Mountaineer plant in West Virginia. As part of its bigger carbon reduction strategy, AEP was establishing construction of a $680 million demonstration plan, partially financed with DOE money. Mike Morris, AEP's chairman, was frustrated that Congress had not passed a cap-and-trade bill, and was worried how he would recover AEP's share of the vast investment. Could he find partners in this cutting edge demonstration, or at least, add it to his utility rate foundation?

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