November 8 & 10, 2011

Mountaineer Commercial Scale Carbon Capture & Mountaineer Commercial Scale Carbon Capture & Storage (CCSII) Project Storage (CCSII) Project Phase I Phase I

Lessons LearnedLessons Learned

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AEP OverviewAEP Overview 5.2 million customers in 11 states Industry leading size and scale of

assets:#2 Domestic generation with 38,000 MW#1 Transmission with 39,000 miles#1 Distribution with 216,000 miles

Coal & transportation assetsOver 7,500 railcars involved in operationsOwn/lease and operate over 2,850 barges & 75 towboatsCoal handling terminal with 20 million tons of capacityConsume 76 million tons of coal per year

18,712 employees

6%6%22%66%

Other –(hydro,

wind, etc.)

Nuclear

Gas/Oil

Coal/ Lignite

AEP Generation Capacity Portfolio

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Mountaineer PlantMountaineer PlantLocated in New Haven WV Owned and Operated by Appalachian Power Company

Single Unit plant 1300 MWnet pulverized coal unit

Single Reheat Supercritical Steam Cycle, burns eastern bituminous coal

3515 psia 1000/1050 oF,(240 bar, 537/566 oC)

Full suite of emissions control equipment, ESP, SCR, Wet FGD and Trona for SO3mitigation.

Deep well characterization activity in 2002

20-MW CO2 capture and storage validation effort by Alstom and AEP in 2010/2011

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MT CCS II Project OverviewMT CCS II Project Overview

Purpose: Advance the development of the Alstom Chilled Ammonia Process (CAP) CO2 capture technology and demonstrate deep saline CO2 storage and monitoring technology at commercial scaleProject Participants

AEP, USDOE, Alstom, Battelle, WorleyParsons, Potomac Hudson, Geologic Experts Advisory Team

Location: Mountaineer Power Plant and other AEP owned properties near New Haven, WV

Preliminary cost estimate: $668 million50/50 DOE cost share up to $334M

Project Technical Objectives90% CO2 removal from the stack gasStore 1.5 million metric tons of CO2/yearDemonstrate commercial scale technology

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Sequestration: Battelle is Storage Contractor2 primary deep saline reservoirs~7,800 and ~8,200 feet below the surface~1,500,000 tons CO2 per yearPipeline system with off-site wellheads

Geologic Experts Advisory Group:Battelle, CONSOL, MIT, Univ. of Texas, Ohio State, WVU, VirginiaTech, LLNL, WV Geo. Survey, OH Geo. Survey, WV DOE, NETL, RWE, & CATF

AEP CCS Commercialization ProjectAEP CCS Commercialization ProjectNew Haven, WVNew Haven, WV

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3D Model of Capture System3D Model of Capture System

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3D Model of Capture System3D Model of Capture System

Capture System requires approximately 13 acres for the 260 MWe Project.

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CCS Equipment at MountaineerCCS Equipment at MountaineerOriginal Plant and 260-MWe Chilled Ammonia System

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COCO22 Transport & Storage SystemTransport & Storage System

Borrow and Jordan Tract sites are the targeted CO2 injection sites; East Sporn site is a back-up contingency site.

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ScopeScope

Capture SystemChilled Ammonia Process Equipment, Tie-in Duct, Storage Tanks, Buildings & Compression Equipment

80,000 cy Concrete9,500 tons Struc. Steel118,000 ft Piping127,000 ft Conduit/Cable Tray1.2-MM ft Electrical Cable

Storage SystemWells

(2) CO2 Injection wells(9) Deep CO2 Monitoring(4) Intermediate CO2 Monitoring(8) Groundwater monitoring

Pipeline 10 miles to furthest injection point

A total of 2.2-million craft labor hours for the capture and storage systems, at 1.2 and 1.0 million hours, respectively.

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MT CCS II Phase I MT CCS II Phase I Technical ApproachTechnical Approach

Chemical PlantsUniform product from a uniform feedstock

Stable production rate with consistent production schedules

Process variables minimized to reduce impacts.

Power Plants:Production based on demand

Cyclical based on weather, time of day, etc.

Frequent load adjustmentsBase load one day, load-following the next.

Variable feedstock (coal)Chemical composition, heating value, moisture content, etc.

vs.

vs.

vs.

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Minimize impact on existing unit. Variable coal supply, which impacts the SO3 and trace element consideration on the project.Avoid the impact of an additional emission source and the associated permitting implicationsTime pressures prevented some optimization opportunitiesIntegration Concepts Considered

Heat Recovery from Flue GasCO2 heat of compression recovery

MT CCS II Phase I MT CCS II Phase I Technical ApproachTechnical Approach

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Options considered:Anhydrous AmmoniaAqueous AmmoniaAmmonium Carbonate

Evaluation Results:Anhydrous Ammonia was selectedReduces Water balance issuesRMP considerations present as a result of Refrigeration System

Lessons LearnedLessons LearnedReagent StudyReagent Study

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CAP Exhaust options consideredExisting stackNew stack close coupled to process islandExisting plant hyperbolic cooling tower

Evaluation Results:Hyperbolic cooling tower option eliminated from consideration

Perceived technical and environmental risksExisting stack option and new stack options were both technically acceptableTeam initially recommended a new dedicated stack.

Uncertainties associated with modeling/permitting of a new stackFor treating higher percentages of flue gas, a dedicated exhaust point may be required as the technical difficulties surrounding mixing of flue gas streams and gas stream temperature becomes a concern

Return to the existing stack was basis for the estimate

Lessons LearnedLessons LearnedClean Flue Gas ExhaustClean Flue Gas Exhaust

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Lessons LearnedLessons LearnedWater ManagementWater Management

Grey water management is a significant challengeFresh water make-up for evaporation and losses do not require added make-up capacityTo make grey water marketable, there is a need to concentrate the ammonium sulfate content

Possible concentrate to solid ammonium sulfateConcentrate up to 40% ammonium sulfate solution, chosen as the best cost option for use as a marketable fertilizer.

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Lessons LearnedLessons LearnedMisc. Capture SystemMisc. Capture System

For the 20% slip stream, steam provided from the existing unit is feasible. For a 100% gas stream, a separate steam source will likely be needed.

Studied various steam source options. For this project size and this unit, steam was taken from the IP to LP crossover. Condensate return must be cooled for reintroduction to the existing power plant cycle if to the hotwell, or introduced back into the low pressure feedwater heater system. Introduction into the feedwater heater system was the basis of estimate.A buffer tank was included to prevent plant cycle contamination from the ammonium carbonate/ammonium bicarbonate reagent

Dedicated control room was recommended due to the complexity of the system and low level of interface needed between the existing unit and the carbon capture equipment

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Injection well pressures have large variation, and Injection pressures in the 1200 – 1500 psi range are expected early in the life of the target injection wellsMaximum injection pressure into the geological formations targeted for this project is expected to be 3000 psi. Compression to an intermediate pressure, followed by variable speed pumping to the final injection pressure offers the greatest flexibility and efficiency over the life of the system as compared to full compression to the maximum expected injection pressure.

Lessons LearnedLessons LearnedCOCO22 CompressionCompression

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Identified a new geologic horizon (lower Copper Ridge) for CO2sequestration which was previously not known as a storage targetThe deeper formations in this region (greater than 5,000ft) show low potential for large scale CO2 sequestration due to low permeabilityPreliminary simulation results show 1.5 million metric tonnes/year CO2injection for 5 years can be achieved with injection pressure lower than the fracture pressure of the formationGeophysical techniques such as surface seismic have limitations

Surface seismic cannot resolve thin horizonsMountaineer formations are only ~30ft in thickness

Drilling a deep well is always associated with uncertaintyUn-expected delays can occur during this process

Reservoir tests are crucial during the characterization processThe emphasis of the subsequent projects should be on obtaining more ‘injection data’Results from numerical models must be calibrated with real data

Lessons LearnedLessons LearnedCOCO22 SequestrationSequestration

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Future plans of CCS for AEP

Questions