The AES Corporation (A)

The AES Corporation, an independent power producer, faced a conflict between its strategy of using low-cost coal for electricity generation and its commitment to social responsibility, specifically regarding greenhouse gas emissions. For its Thames plant in Connecticut, which was projected to emit over 15 million tons of carbon over 40 years, the company evaluated four offset alternatives: promoting energy conservation through lighting retrofits, employing carbon scrubbing technology, implementing reforestation projects in tropical developing countries, or shifting its long-term strategy toward natural gas and renewables. While natural gas and renewables offered lower emissions, they presented higher operating costs or intermittency issues. Reforestation was identified as a cost-effective method to sequester carbon while providing additional social benefits.

• AES operated under a 'least-cost' strategy, identifying coal as the most viable fuel because it is "abundant and available from U.S. reserves for over 200 years" and less prone to price spikes than other fuels.
• The Thames coal-fired cogeneration plant in Montville, Connecticut, was projected to emit more than 15 million tons of carbon over its 40-year operational lifespan.
• AES evaluated carbon scrubbing technology but found it prohibitively expensive; for example, a system at the Shady Point plant for 4% carbon dioxide removal cost approximately $10 million, and other systems could cost between $50-300 million per plant.
• Reforestation in tropical developing countries was identified as a feasible offset option, with estimated costs between $1.5 to $8.0 million, leveraging faster tree growth and cheaper labor compared to domestic projects.
• While natural gas produces approximately two-thirds the carbon dioxide of coal, AES found it risky due to operating costs being "two to three times greater than that of coal" and vulnerability to fuel price swings.
• Renewable energy options were deemed less viable for large-scale base load power in 1987: wind was intermittent, solar had high capital costs of $2000 to $3000 per kilowatt, and hydropower was limited by the depletion of available dam sites.

APA

Trent, M. (1992). The AES Corporation (A). World Resources Institute. https://pdf.wri.org/bell/case_1-56973-122-5_full_version_a_english.pdf

Chicago

Trent, Marcy. The AES Corporation (A). World Resources Institute, 1992. https://pdf.wri.org/bell/case_1-56973-122-5_full_version_a_english.pdf.

Wikipedia

{{cite report |last1=Trent |first1=Marcy |title=The AES Corporation (A) |publisher=World Resources Institute |date=1992 |url=https://pdf.wri.org/bell/case_1-56973-122-5_full_version_a_english.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{trent1992aes, author = {Trent, Marcy}, title = {{The AES Corporation (A)}}, institution = {World Resources Institute}, year = {1992}, url = {https://pdf.wri.org/bell/case_1-56973-122-5_full_version_a_english.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }