The FutureGen Alliance last week signed a $553 million cooperative agreement with the U.S. Department of Energy to work with Ameren Energy Resources to develop a pipeline and underground storage facility in Illinois to house emissions from an existing coal plant.

The revamped $1.2 billion project calls for an idled plant owned by Ameren in Morgan County, Ill., to be retrofitted with its carbon dioxide emissions moved through a newly constructed pipeline to a new underground storage facility.

The FutureGen 2.0 project would be the first to use oxy-combustion technology, which burns coal with a mixture of oxygen and carbon dioxide instead of air to produce a concentrated carbon dioxide stream that can safely be stored.

Around $1 billion in federal stimulus funds have been committed to the ­FutureGen project.

The plan relies on $75 million of bond financing through the Illinois Finance Authority, which would cover a portion of the pipeline costs and another $25 ­million in borrowing from the local government that would house the underground facility.

Under the agreement, the alliance will have primary management responsibility for locating, developing and operating a permanent storage site along with the required pipeline from the power plant. The pipeline will run from Meredosia, Ill., to a storage site that has not yet been selected.

The DOE in late 2007 chose Mattoon, Ill., as the site for a then-$1.5 billion pioneering coal plant that would harness the latest technology in the construction of a coal gasification plant.

The proposed facility — to be constructed by the companies that make up the FutureGen Alliance — would convert coal into hydrogen and electricity with about 90% of carbon dioxide emissions captured and stored safely underground.

The project stalled after the administration of George W. Bush pulled its financial support in early 2008 due to escalating costs and officials revised the plan.

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