Department of Energy Takes Another Step Forward on FutureGen Project in Mattoon, IL

U.S. Department of Energy, July 14, 2009

Washington, D.C. – The Department of Energy today issued a National Environmental Policy Act (NEPA) Record of Decision to move forward toward the first commercial scale, fully integrated, carbon capture and sequestration project in the country. The Department's decision is based on careful consideration of the proposed project's potential environmental impacts, as well as the program goals and objectives.

"The carbon capture and sequestration technologies planned for this flagship facility is vitally important to America and the world," said Energy Secretary Steven Chu. "This step forward demonstrates the Administration's commitment to developing clean energy technologies, creating jobs, and reducing emissions of greenhouse gases."

The Record of Decision and a cooperative agreement signed by DOE and the FutureGen Alliance allow the Alliance to proceed with site-specific activities for the project. Over the next eight to ten months, the Alliance will complete a preliminary design, refine its cost estimate, develop a funding plan, expand the sponsorship group, and, if needed, conduct additional subsurface characterization.

Following these activities, which will be completed in early 2010, the Department and the Alliance will decide whether to continue the project through construction and operation. Both DOE and the FutureGen Alliance agree that a decision to move forward is the preferred outcome and anticipate reaching a new cooperative agreement for the full project. Funding will be phased and conditioned based on completion of necessary NEPA reviews.

The Department of Energy's total anticipated financial contribution for the project is $1.073 billion, $1 billion of which would come from Recovery Act funds for carbon capture and sequestration research. The FutureGen Alliance's total anticipated financial contribution is $400 million to $600 million. The total cost estimate of the project is $2.4 billion, consequently, the Alliance, with support from DOE, will pursue options to raise additional non-federal funds needed to build and operate the facility, including options for capturing the value of the facility that will remain after conclusion of the research project, potentially through an auction of the residual interests in the late fall.

When fully operational, the facility will use integrated gasification combined cycle technology with carbon capture and sequestration into a deep saline geologic formation. It will be designed to capture 90% of the carbon emissions by the third year of operations but may be operated at 60% capture in the early years to validate plant integration and sequestration capability. This technology should sequester one million tons of CO2 annually when it reaches full commercial operations.

Download the press release

The Record of Decision can be found online at: http://www.fossil.energy.gov/programs/powersystems/futuregen/futuregen_rod_071409.pdf

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Exelon Joins Illinois 'Clean-Coal' Demonstration Plant

CNNMoney

(Adds comments from the FutureGen Alliance's CEO and government officials.)

By Mark Peters

Of DOW JONES NEWSWIRES

NEW YORK (Dow Jones)-The biggest U.S. nuclear-power generator joined the federal government's flagship initiative to clean up coal-fired electricity generation in the face of climate change, signing onto a project other utilities have abandoned.

Chicago-based Exelon Corp. (EXC) said Saturday it intends to join the FutureGen Alliance, a U.S. government-backed project to capture and store greenhouse-gas emissions from a coal-fired power plant planned for Mattoon, Ill. The company's participation could serve as a shot in the arm for a project that's already collapsed once before and suffered the defections of key corporate members even after being rejuvenated under the Obama administration last year.

Exelon has moved away from coal-fired generation in recent years, but the company sees the large role the fuel plays in producing electricity in the U.S. and says it wants to support efforts to cut emissions. Comprehensive federal legislation to fight climate change is stalled in the Senate, but Exelon's heavy reliance on nearly emissions-free nuclear power leaves it poised to thrive if nationwide rules to curb emissions are put in place, making it more expensive to emit carbon dioxide.

"It is critical that we explore the most promising technologies for reducing-- and even eliminating--harmful emissions at coal-fired power plants," John Rowe, chairman and chief executive of Exelon, said in a statement.

The company's participation comes after American Electric Power Co. (AEP) and Southern Co. (SO), two of the nation's biggest coal-burning utilities, pulled out of FutureGen to pursue their own projects to capture and store the CO2 emissions from coal-fired generation. Their exit left FutureGen without a U.S. utility among its members, leaving only large coal companies and foreign power companies. Alliance members include coal companies Peabody Energy Corp. (BTU) and BHP Billiton Ltd. (BHP), and utilities E.ON AG (EOAN.XE), which has operations in the U.S., and China Huaneng Group.

The Obama administration has worked to revive the project, committing more than $1 billion. This came after the Bush administration in early 2008 backed out of funding plans after costs almost doubled. Although it's a government- backed project, FutureGen still requires considerable private funding, with American Electric Power last summer saying its exit was a financial decision. FutureGen has indicated it would like to add several more partners to the project.

"Today's announcement will help to further discussions that the Alliance is having with other companies who have expressed interest in FutureGen membership," FutureGen Alliance CEO Michael Mudd said in a press release.

Illinois Gov. Pat Quinn and Sen. Dick Durbin (D., Ill.) noted in the same release that the company's backing comes ahead of a pending announcement from the Department of Energy on the next stage of the project, with final go-ahead dependent on the alliance bringing in more members and cutting costs. Final approval will release $1.1 billion of federal stimulus funds to restart the project.

FutureGen envisions the construction of a power plant that would capture and permanently store underground CO₂ emitted in combustion. The plant would test the technology on a commercial level, a critical step for an approach that hasn't been tried on a large scale. Coal-fired plants provide nearly half the nation's power while having the highest CO2 emissions among various generation sources. Developing a commercially viable means to clean up coal-fired power generation is seen by many as a vital--and politically expedient--way to limit climate change.

Quinn, Durbin and Rowe in their statements nodded to project's location in the company's home state, where it owns both generation and a large power-delivery utility.

"Exelon is very familiar with the needs of our state," Durbin said. "Because of that connection to Illinois, they bring a lot to the table as the FutureGen Alliance and the Department of Energy enter into the final stage of negotiations. I am confident that this is the first of many new members--from Illinois and around the world."

-By Mark Peters, Dow Jones Newswires; 212-416-2457;

(Mark Long and Jane Hexham in New York contributed to this article.)

(END) Dow Jones Newswires
01-30-10 1658ET
Copyright (c) 2010 Dow Jones & Company, Inc.

Link to the article.

OFFICIAL STATEMENTS: July 14, 2009

Senator Dick Durbin's Statement Regarding Release of FutureGen Record of Decision

Illinois Department of Commerce and Economic Opportunity Director Warren Ribley reacts to DOE's issuing of Record of Decision

OFFICIAL STATEMENTS: June 25, 2009

Senator Dick Durbin's Statement Regarding FutureGen Alliance

OFFICIAL STATEMENTS: June 12, 2009

To read official statements from Senator Dick Durbin, Congressman Tim Johnson, Congressman Jerry Costello, Congressman John Shimkus and Director Warren Ribley, please view the links below:

(Download PDFs):
Senator Dick Durbin's, Congressmen Tim Johnson's, Congressman Jerry Costello's and Congressman John Shimkus' Statements

Illinois Department of Commerce and Economic Opportunity Director Warren Ribley reacts to FutureGen announcement

To read the official statement from U.S. Secretary of Energy, Dr. Steven Chu, please view the link below:

Secretary Chu Announces Agreement on FutureGen Project in Mattoon, IL
U.S. Department of Energy, June 12, 2009

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