Arizona Public Service Co. has landed a $70.5 million Department of Energy grant to try to feed algae with the carbon dioxide coming from its coal-fired electricity plants.

The grant will support the utility's carbon sequestration project at its Cholla Generating Station in northeastern Arizona, the Phoenix Business Journal reports. The project calls for the plant feed its carbon emissions to an algae pond, and that algae will be converted to biofuel.

The grant comes from the DOE's roughly $1.4 billion Clean Coal Power Initiative, which has also seen applications from Duke Energy, NRG, Southern Co. and American Electric Power Co., among other utilities (see Duke Leaves Clean Coal Group).

Most of those carbon capture and sequestration projects involve storing carbon emissions in underground caverns (see Carbon Capture: Possible Solution Part I, II, III and IV).

That's generally seen as the cheapest way to store carbon, and it's also the only method to be tried out at potentially commercial scales to date (see Vattenfall to Trap Carbon Emissions).

Underground storage is also the focus of the FutureGen Alliance, a multi-utility carbon capture project recently revived by DOE (see DOE Gives Go Ahead for FutureGen to Be in Illinois).

The DOE has also given $27.6 million to 19 projects seeking to determine the risks of storing captured carbon underground (see Feds Pump Cash Into Carbon Storage).  

Using algae to absorb carbon emissions is a more novel approach, though at least one other project of its kind is seeking DOE funding. Algae-to-biofuel company Origin Oil said last month that it was seeking grants for a project that would see captured carbon fed into algae ponds.

OriginOil named the DOE's Idaho National Laboratory and materials science company Media and Process Technologies as partners, and said it would seek grants from a smaller, $100 million pot of DOE money aimed at more experimental carbon capture and storage technology.

One ton of algae should be able to absorb about two tons of carbon dioxide through its life cycle, OriginOil CEO Riggs Eckelberry said at the time. The trick will be to get the captured carbon from smokestack to algae pond. OriginOil intends to spend about $1 million on an initial test phase and up to $20 million or so on a working demonstration project, he said.

Of course, making fuel from algae is harder than it may look, although about 57 companies are busy trying it out. The costs of harvesting algae making it a challenge to produce fuel at prices that can compete with petroleum-based fuel (see Coming Soon: $2 a Gallon Diesel From Algae?).

Learn how to differentiate your company through greener product lines at Greening the Supply Chain on September 17 in Boston.