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FutureGen to build 'clean coal' plant in Illinois

The $1.8 billion facility will demonstrate a novel technology to fight global warming.

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A solution to America's energy challenge – turning its coal reserves into a clean fuel – is a step closer to reality.

A government-industry alliance announced Tuesday that it would put a $1.76 billion "clean coal" power plant in Mattoon, Ill. By 2013, the plant is expected to start cranking out 275 megawatts of electricity from gasified coal while emitting almost no pollutants and only 10 percent of the carbon dioxide from today's coal-fired plants. The taxpayer-supported project, called FutureGen, joins a global race to develop clean-coal technology.

But it comes at an odd time for the utility industry. Even though the United States agreed this past weekend to pursue an international greenhouse-gas reduction pact, the US government has announced no plans or guidelines for future regulation or taxation for carbon. Facing such uncertainties and escalating costs to build power plants, utilities have scaled back their construction plans, especially for plants powered by coal. The dozen or so proposed plants using clean-coal technology similar to FutureGen – called integrated gasification-combined cycle or IGCC technology – represent less than half the number of plants on the drawing boards just six months ago, analysts say.

"Until there's a carbon policy framework that makes it clear for industry how they can take advantage of the edge IGCC has in carbon emissions over conventional power, this new technology faces the same go-slow approach," says Alex Klein, senior analyst at Emerging Energy Research, a Cambridge, Mass., energy market research firm.

That slowdown could make FutureGen even more key to the future of IGCC technology. If the US is to use its massive coal reserves – estimated to last roughly 200 years – FutureGen-style gasification technology will be vital, many analysts say.

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