The FutureGen Alliance on Tuesday said it had signed a $17.3 million cooperative agreement with the Department of Energy that covers preliminary design activities through the end of 2009, allowing for the continued development of the Illinois gasified coal power plant and carbon capture initiative.

FutureGen Alliance CEO Michael Mudd said the agreement marked a milestone. “This agreement clearly signals our shared interest in realizing the potential of generating clean energy in Illinois,” he said.

Under the agreement, the alliance will work with the DOE and other partners to continue electric grid interconnect studies, work on securing environmental permits, define alliance operational activities, and update plant design and project cost estimates. The alliance and the DOE will make a decision on taking the project forward to final design and construction after these activities, in early 2010.

“This signifies a new beginning for our coordinated efforts to bring FutureGen to Illinois and underscores the commitment of all involved to making this project a reality. We will continue to do all we can on the state level to ensure this first-of-its-kind facility is built in Illinois,” said Illinois Department of Commerce and Economic Opportunity Director Warren Ribley.

The facility in Mattoon, Ill., will test and demonstrate coal gasification and carbon capture and sequestration technology in a single 275-MW commercial-scale facility. The public-private partnership project will initially capture at least 60% of carbon dioxide emissions with the goal of capturing 90% in the first years of operation.

Funding problems continue to plague the alliance, however. The DOE requires under a "provisional agreement" that the alliance expand to 20 members by year’s end and that each member contribute between $20 million and $30 million over the next four to six years. The alliance currently has only nine members.

Earlier this year, two companies—American Electric Power and Southern Co.—pulled out of the project, citing funding uncertainties.

Source: FutureGen Alliance, POWER