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AEP CEO expresses interest in small-scale coal plants

The CEO of American Electric Power Co. Inc. at an industry conference March 28 expressed interest in small-scale coal plants, framing the technology as a possible distributed energy solution to preserve coal's declining share of the national energy mix.

Nick Akins, chairman, CEO and president of the Ohio-headquartered utility, also articulated support for an Obama-era cap-and-trade bill, which he said would have promoted carbon capture and storage projects.

During a presentation at the Energy Thought Summit in Austin, Texas, titled "Utility Transformation and Its Impact on Communities," an attendee asked Akins, "Is coal dead?"

"Coal is not dead," Akins responded. "I really believe, certainly from a diversity perspective, it's important for coal to be a part of the portfolio going forward.

"The issue really becomes, how are we going to really address the technical solution around carbon capture and storage?" he said. "As we go forward, you're going to see, in the end, more distributed solutions, and generation will become much different than it is today. The question is, will coal be one of those distributed solutions?"

Earlier this month, a top U.S. Department of Energy official said the federal government is developing a plan to build small-scale coal-fired power plants. Assistant Secretary for Fossil Energy Steven Winberg said smaller coal plants would better complement the electric grid and his agency could offer a cost-share funding opportunity for entities to compete for funding.

Akins said that in today's market, it would be "really very difficult, if not impossible" for AEP to build a new, full-size coal plant. That venture, which he described as a 40- to 80-year commitment, "certainly is a high-risk investment, and it's really very difficult to bet against technology."

Nearly half of AEP's generation capacity, at 47%, was coal-fired in 2017, according to the company. Akins said the industry is "going to see a continued reduction in the amount of coal that actually serves this country."

One way to keep that sector alive is by promoting carbon capture and storage, or CCS, Akins said. AEP supports congressional legislation from 2009, sponsored by then-U.S. Reps. Henry Waxman and Ed Markey, which the CEO said would have brought about "clear demonstration projects" of CCS technology.

That measure passed the House but was never voted on by the Senate. "I just wonder where we'd be today if we had really focused on those kinds of [CCS] solutions back then," Akins said.

If companies are trying to reduce carbon emissions and implement clean energy, then "this is the time to really be involved in this industry, and be able to focus on the regulatory solutions that enable that to happen," he said.

During his conference address, Akins presented AEP as an organization embracing what he called the aggregation of energy.

"Investors are not going to care about" traditional lines of demarcation as to who does generation, transmission or distribution, he said. "When you think about some of the issues that we're dealing with today, it's really about the combination of all these technologies, the ability to aggregate data and accumulate efficiencies to be able to answer the customer's needs in terms of where they use and what they use."

Texas regulators in January rejected the application of AEP subsidiary AEP Texas North Co. to install two utility-scale battery facilities but still spoke positively about the future of energy storage.

"How can we deploy these technologies and really improve the social awareness of the use of energy, but also improve society as a whole?" Akins said of initiatives such as storage and smart cities.

"The original social network was the electric utility industry," he said of AEP's ability to connect customers and meet their needs.