The US Department of Energy has signed an agreement with the FutureGen Industrial Alliance to build a prototype of a zero emission fossil-fuelled power plant.

The Alliance will contribute $250 million to the nearly $1 billion government-industry project, first announced in 2003, and includes American Electric Power, BHP Billiton, CONSOL Energy Inc, Foundation Coal, China Huaneng Group, Kennecott Energy, Peabody Energy and Southern Co.

The alliance plans to issue a site selection solicitation in early 2006, develop a short list of the most qualified candidate sites by mid 2006 and choose a final site in 2007 with operations due to commence in 2012.

The project will be based around coal-gasification and will also be designed to capture carbon dioxide and sequester it. The initial goal will be to capture 90% of the plant’s carbon dioxide, but nearly 100% may be possible with advanced technologies.

The FutureGen plant will be sized to generate approximately 275 MW.