Air Products cancels waste energy recovery project

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   Air Products and Chemicals, Inc. and AK Steel Corp. jointly announced that they have terminated work on the development of an energy project proposed for the AK Steel facility in Middletown, Ohio. The project would have used waste gas from AK Steel’s Middletown blast furnace to produce steam and electrical power. The project would have cost about $310 million and had been under development since 2008. The companies said that, despite a contingent $30 million grant from the U.S. Department of Energy, current and projected electricity costs do not justify the economics of proceeding with the project. If operational, it was expected to produce one million megawatt-hours of electricity per year.
The AK Steel-Air Products project was designated as a renewable energy resource under Ohio's renewable portfolio standard ("RPS") as part of Ohio Senate Bill 289, sponsored by Senator Bill Coley (R-Middletown), and enacted in April of this year. SB 289 strictly limited its application to qualifying projects in Butler County, where AK Steel's production facility is located. The designation would have allowed the project to generate renewable energy credits to help pay for the project. The size of the project had created some concern in the renewable energy industry that it may overwhelm the in-state REC market.
Ohio Senate Bill 315--a more comprehensive energy bill signed into law last month by Governor John Kasich--again amended the state's RPS to qualify certain waste energy recovery projects as renewable energy resources. A summary of SB 315, including a brief explanation of the section of the Ohio Revised Code that classifies "waste energy recovery systems" as renewable energy systems, is available here. A chart explaining Ohio's RPS is available here.
NOTE: UNVERIFIED BY A SECOND SOURCE

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Middletown News Members Profile Send Private Message Find Members Posts Visit Members Homepage Add to Buddy List Prominent MUSA Citizen Joined: Apr 29 2008 Location: United States Status: Offline Points: 1100	Post Options Post Reply Quote Middletown News Report Post Thanks(0) Quote Reply Topic: Air Products cancels waste energy recovery project Posted: Jul 03 2012 at 3:56pm
	Air Products and Chemicals, Inc. and AK Steel Corp. jointly announced that they have terminated work on the development of an energy project proposed for the AK Steel facility in Middletown, Ohio. The project would have used waste gas from AK Steel’s Middletown blast furnace to produce steam and electrical power. The project would have cost about $310 million and had been under development since 2008. The companies said that, despite a contingent $30 million grant from the U.S. Department of Energy, current and projected electricity costs do not justify the economics of proceeding with the project. If operational, it was expected to produce one million megawatt-hours of electricity per year. The AK Steel-Air Products project was designated as a renewable energy resource under Ohio's renewable portfolio standard ("RPS") as part of Ohio Senate Bill 289, sponsored by Senator Bill Coley (R-Middletown), and enacted in April of this year. SB 289 strictly limited its application to qualifying projects in Butler County, where AK Steel's production facility is located. The designation would have allowed the project to generate renewable energy credits to help pay for the project. The size of the project had created some concern in the renewable energy industry that it may overwhelm the in-state REC market. Ohio Senate Bill 315--a more comprehensive energy bill signed into law last month by Governor John Kasich--again amended the state's RPS to qualify certain waste energy recovery projects as renewable energy resources. A summary of SB 315, including a brief explanation of the section of the Ohio Revised Code that classifies "waste energy recovery systems" as renewable energy systems, is available here. A chart explaining Ohio's RPS is available here. NOTE: UNVERIFIED BY A SECOND SOURCE
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squeemy Members Profile Send Private Message Find Members Posts Add to Buddy List MUSA Resident Joined: Dec 23 2009 Location: Middletown Status: Offline Points: 125	Post Options Post Reply Quote squeemy Report Post Thanks(0) Quote Reply Posted: Jul 08 2012 at 3:29pm
	excellent news for two reasons: 1 - this project is no longer a threat to dilute the Renewable Energy Credits generated by non-carbon based energy producers like wind and solar. Should have been designated "Alternative Energy Credit" but more highly valued RECs were used to justify the expense. Lousy deal for everyone who breathes. 2 - project cancellation demonstrates AKS management can pull the plug on a project based on evolving market conditions. that's somewhat re-assuring as I remember days when that always wasn't the case.

John Beagle Members Profile Send Private Message Find Members Posts Visit Members Homepage Add to Buddy List MUSA Official Joined: Apr 23 2007 Location: Middletown Status: Offline Points: 1855	Post Options Post Reply Quote John Beagle Report Post Thanks(0) Quote Reply Posted: Jul 09 2012 at 9:13am
	-project cancellation demonstrates AKS management can pull the plug on a project based on evolving market conditions. that's somewhat re-assuring as I remember days when that always wasn't the case. Agreed. This clearly demonstrates that AKS is proactive rather than reactive (when it's too late). I have been buying AKS because I like their proactive stance not just on this past project, but also the way they are attempting to control more than one of their raw materials cost. More thoughts on AK Steel Stock
	John Beagle Middletown USA News of, for and by the people of Middletown, Ohio.

acclaro Members Profile Send Private Message Find Members Posts Add to Buddy List Prominent MUSA Citizen Joined: Jul 01 2009 Status: Offline Points: 1878	Post Options Post Reply Quote acclaro Report Post Thanks(0) Quote Reply Posted: Jul 09 2012 at 12:08pm
	I disagree with the motivation for this. It was driven by the leverage SunCoke provided on meeting the needs for electricity for AKS, so the asset needed to power would have been redundant. SC provided almost entirely the needs AKS has for power in the form of electricity. The recycling effort was cost prohibitive, as both AKS and SC did a feasibility analysis and determined the capital outlay did not produce a significant return on the COCE to warrant reselling the power recycled back to Duke. AKS has been proactive in cost optimization for years, and when the cost of raw material is cheaper to buy on "hedge" than make an acquisition directly, they always lean in favor of buy vs make, and have done since the A merger with K.
	'An appeaser is one who feeds a crocodile, hoping it will eat him last.' - Winston Churchill