Energy Dept. formally commits $1 billion in stimulus funds to FutureGen project

Energy Dept. commits $1 billion to FutureGen

CHAMPAIGN, Ill. — The U.S. Department of Energy on Tuesday said it has formally committed $1 billion in federal stimulus money to the recently retooled FutureGen clean-coal project, beating a deadline to use the money or lose it and kicking off years of further work that could finally see the project completed.

One of the companies involved, Ameren Corp., said the $1.2 billion project — which will include some private funding — still has a number of hurdles to clear.

The Energy Department said in a news release that it has signed new deals with the FutureGen Alliance — coal companies and other business it worked with on the project for years — and with Ameren. The department has said the money needed to be committed by Sept. 30 or it would be lost.

“Today’s milestone will help ensure the U.S. remains competitive in a carbon constrained economy, creating jobs while reducing greenhouse gas pollution,” Energy Secretary Steven Chu said in the release.

But Ameren made clear that the project still has many hurdles to clear before it produces even a megawatt of power or, as it’s intended to do, pumps any carbon dioxide underground for storage.

In its news release, the company said it will spend the next nine months working with The Babcock & Wilcox Company (B&W) and Air Liquide Process & Construction Inc. on engineering and design work needed to refit Ameren’s coal-fired power plant in Meredosia, Ill., with what’s known as oxy-combustion technology, and on an economic analysis.

If the project still appears to be technically and commercially sound, Ameren says it will then conduct environmental studies needed for federal environmental approval and seek changes in electric rates to recover its costs. If those steps go well, Ameren expects construction to start in 2012 and end in 2015.

“We are excited to move forward with our partners — B&W and Air Liquide — on the next step toward building a near-zero emission facility — a generating plant that will serve as an invaluable testing ground for these critical new clean energy technologies,” said Charles Naslund, president and CEO of Ameren Energy Resources Company, the holding company for Ameren.

FutureGen Alliance CEO Ken Humphreys said he expected the project to “substantially advance the science of” capturing carbon dioxide, a greenhouse gas linked to climate change, and storing it underground rather than letting it escape into the atmosphere.

Tuesday’s announcement had been awaited since the Energy Department in August announced radical changes in the FutureGen project. Long-standing plans to build a futuristic coal plant using another technology in the eastern Illinois city of Mattoon and store carbon dioxide underground there were dropped. Instead, the agency plans to refit the Meredosia plant and store carbon dioxide at a site to be determined.

The site is expected to be picked early next year, the Energy Department said Tuesday.

U.S. Sen. Dick Durbin, the Illinois Democrat who has backed the project, said Tuesday’s announcement — even with the remaining steps that must be taken — is a sure sign FutureGen will be built.

“If there was any remaining question as to whether FutureGen is really coming to Illinois, today we have the answer,” Durbin said.