Plans to construct a first-of-its-kind cogeneration plant in North America at AK Steel’s Middletown Works in Ohio have fallen through.

The proposal to build a $310m cogeneration plant, to capture waste gas from the blast furnace of the steel plant and convert it to steam and electricity, on the site of AK Steel Corp.’s steel mill in Ohio, US has been cancelled.

It was developed by Pennsylvanian firm, Air Products.

“It’s unfortunate it didn’t work out, but also it’s strictly economics,” said Barry Racey, AK Steel spokesman to the Middletown Journal. “Cogeneration is a good technology and it’s good for the environment and it’s good as an alternate way of generating electricity and steam, in our case.”

However, at today’s electricity prices and future projections, it’s cheaper for AK Steel to buy electricity than it is to generate it.

“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,” AK Steel and Air Products said in a statement with the release.

The cogeneration plant would have joined hundreds of millions of investment being poured into Middletown related to AK Steel.

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