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AEP Sustainability Report: Carbon Emissions Rise 1.5%, Revenues up 4.8%

American Electric Power’s total CO2 emissions rose just shy of 1.5 percent from 2010 to 2011, while revenues rose 4.8 percent over that time period, according to the company’s 2012 combined annual report and corporate sustainability report.

In 2011, AEP emitted 136 million metric tons of carbon, up from 134 million metric tons in 2010. Revenues rose from $14.4 billion to $15.1 billion over that time period.

AEP’s NOx emissions rose 4.8 percent from 2010 to 2011 – the same as revenues – while its SO2 emissions stayed static over that time period. In 2010 AEP emitted 125,000 US tons of NOx. That figure rose to 131,000 US tons in 2011. The company’s SO2 emissions flatlined at 416,000 US tons over that time period.

In 2011, AEP says that the EPA introduced two regulations – the Cross-State Air Pollution Rule and the MATS rule – that “profoundly” affected its business and approach to emissions. AEP has invested $7 billion to upgrade plants and reduce SO2 emissions by 73 percent and NOx emissions by 80 percent since 1990, the report says. The additional regulations will raise energy rates at a consumer level, the company argues.

It blames a lack of certainty in U.S. climate policy, as well as the weak economy, for its decision last year to abandon plans for a commercial-scale carbon capture and storage facility at its Mountaineer coal-fired in West Virginia. AEP found that the 20 MW pilot facility captured more than 51,000 metric tons of CO2 between September 2009 and its closing in mid 2011.

AEP’s combined report includes details of the company’s fuel usage, and AEP is predicting a large decline in the proportion of its power derived from coal over the coming years.

In 2011, 78 percent of the company’s power came from burning coal. Next year AEP predicts this figure will drop to 63 percent, and by 2020, to 50 percent. The lion’s share of this drop-off will be accounted for by an increase in the company’s natural gas power, which AEP predicts to rise from 11 percent in 2011 to 24 percent of its power in 2012. By 2020 natural gas will account for 27 percent of the company’s generating capacity (see graph below).

Demand response and energy efficiency is predicted to rise from accounting for none of AEP’s power in 2011 to 7 percent in 2020. In January, AEP reached an agreement to acquire BlueStar Energy Holdings, a utility and provider of energy efficiency services. As well as providing electric supply for retail customers in Ohio, Illinois and other deregulated electricity markets, BlueStar also provides energy efficiency and demand response services nationwide through BlueStar Energy Solutions.

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