Under the pressurized oxy-combustion technology, being developed by UPA, coal is burnt at high pressures in highly purified oxygen instead of in air at normal pressure as in conventional coal plants.

ThermoEnergy said that new technology allows virtually all of the pollutants, including the CO2, to be captured before they are emitted into the atmosphere, and also increases the efficiency of power plants.

The new pressurized oxy-combustion technology will allow existing coal plants to meet both the US Environmental Protection Agency regulations.

"We are proud that the U.S. Department of Energy has recognized the potential of the efforts of our newly formed joint venture with ITEA," said Cary Bullock, Chairman and CEO of ThermoEnergy Corporation.

Unity Power Alliance managing director Robert Marrs said the DOE selection reinforces the promise of UPA’s pressurized oxy-combustion technology to create completely clean, coal-fired power plants.

"The grant will enable us to boost the efficiency of the technology and to improve its ability to capture CO2," Marrs added.

"The overall goal is to lay the foundation for a 50MW pressurized oxy-combustion power plant, which would be followed by a 320MW commercial power plant."

The DOE will provide the funding through its National Energy Technology Laboratory (NETL), which aims to advance technologies that can capture 90% of the CO2 from power plants at less than a 35% increase in cost of electricity.

The Massachusetts Institute of Technology (MIT) and the Georgia Institute of Technology will work alongside with UPA for the R&D program.