london (Platts)--31Jan2008

The US Department of Energy on Wednesday confirmed it is ending its
support of FutureGen, a $1.8-billion project designed to build a nearly
emissions-free coal-fired power plant, and instead provide funding for carbon
capture and sequestration technologies that could be used for integrated
gasification combined-cycle plants expected to be in operation by 2015.
DOE said its "restructured approach" will build on technological research
and development advancements in IGCC and CCS technology achieved over the past
five years and is expected to at least double the amount of carbon dioxide
sequestered compared with the FutureGen concept.
The agency's announcement comes a day after Energy Secretary Samuel
Bodman, in a meeting with members of the Illinois congressional delegation,
said DOE would withdraw its support from the $1.8-billion project because of
rising costs and technological advances. The decision comes just weeks after
industry partners selected Mattoon, Illinois, as the site for the plant. DOE
was to have provided $1.3 billion toward the project's costs.
"This restructured FutureGen approach is an all-around better investment
for Americans," Bodman said in a statement. "As technological advancements
have been realized in the last five years, we are eager to demonstrate CCS
technology on commercial plants that when operational, will be the cleanest
coal-fired plants in the world. Each of these plants will sequester at least
one million metric tons of carbon dioxide annually and help meet our nation's
rapidly growing energy demand."
Bodman also said DOE on Wednesday issued a request for information asking
for industry input by March 3 on the costs and feasibility of building clean
coal facilities that achieve the intended goals of FutureGen.
Following this period and consideration of industry comment, DOE said it
intends to issue a competitive solicitation to provide federal funding under
cooperative agreements to equip commercial IGCC--or other clean coal
technology--power plants that generate at least 300 MW, with CCS technology
aimed at accelerating near-term technology deployment.
The agency said the new approach would allow it to maximize the role of
private sector innovation, provide a ceiling on federal contributions, and
accelerate the administration's goal of increasing the use of clean energy
technologies to help meet the steadily growing demand for energy while also
mitigating greenhouse gas emissions.
Under this plan, DOE's investment would provide funding for no more than
the CCS component of the power plant, compared with FutureGen where the agency
said the government would incur 74% of rising costs. This would allow for
commercial operation of IGCC power plants equipped with CCS technology to
begin as soon as the plants are commissioned, between 2015 and 2016.
The FutureGen concept announced in 2003 planned the creation of a
near-zero emissions, 275-MW power plant that produced hydrogen and electricity
from coal on a smaller-than-commercial-scale, serving as a laboratory for
technology development.