Ameren's Coal Carbon-Capture Plant Gets $1 Billion From Obama

The Obama administration pledged $1 billion in stimulus funds to capture carbon emissions from a coal-fired Ameren Corp. power plant in Illinois, the biggest U.S. effort to show the polluting fuel can be made cleaner.

The FutureGen 2.0 project will revamp a 200-megawatt unit at Ameren’s plant in Meredosia, Illinois, Energy Secretary Steven Chu and Senator Dick Durbin, an Illinois Democrat, said in an e-mailed statement yesterday. Babcock & Wilcox Co. and a group of energy companies are participants in the plan.

The project replaces a stalled Bush administration plan to build a clean-coal plant from the ground up in Mattoon, Illinois. Instead, the new proposal calls for a network of pipelines to deliver carbon dioxide generated from burning coal to a repository in Mattoon that may serve as a storage site for other plants in the region.

The award will “help ensure the U.S. remains competitive in a carbon-constrained economy, creating jobs while reducing greenhouse gas pollution,” Chu said in the statement.

The project will demonstrate how carbon dioxide emissions from coal-fueled power plants can be captured from smokestacks and shipped for storage, the Energy Department said.

Coal generates about half of U.S. electricity and accounts for about 40 percent of its manmade emissions, which most scientists say contributes to global warming. Coal also is the most abundant fossil fuel source in the U.S.

The revised project remains a “boondoggle,” said Bruce Nilles, director of energy programs for the San Francisco-based Sierra Club.

‘Smarter, Cheaper Ways’

“There are smarter, cheaper ways to cut pollution without relying on 19th century fossil-fuel technology.”

Ameren rose 16 cents to $27.20 at 4:15 p.m. in New York Stock Exchange composite trading, and the St. Louis-based company has declined 2.7 percent this year.

FutureGen 2.0 is intended to retrofit a 200-megawatt unit at Ameren’s Meredosia plant with an “advanced oxy-combustion” technology, new boiler, and air-separation unit to capture 90 percent of the plant’s carbon dioxide emissions. It would also cut most emissions of sulfur and nitrogen oxides that cause smog and acid rain, as well as toxic mercury.

Testing the technology on the Ameren plant will help determine whether more coal plants can be retrofitted to continue operating economically, the developers said. The plant rebuilding and pipeline will create about 775 construction jobs, they said.

The Energy Department’s original plan for the project was to build a 275-megawatt plant that transforms coal into a gas to make it cleaner-burning. That project was dropped after cost estimates more than doubled the initial $950 million price tag. The accuracy of those estimates remained in dispute.

To contact the reporters on this story: Jim Snyder in Washington at jsnyder24@bloomberg.net; Christopher Martin in New York at cmartin11@bloomberg.net.

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