Issue date: 9/2/09 Section: News

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Leaders of the U.S. Department of Energy and the FutureGen Alliance agreed today to a cooperative agreement that formalizes a plan for the future, as the alliance moves closer to breaking ground in Mattoon.

Michael Mudd, chief executive officer of the alliance, said the alliance hopes project construction could start sometime next year, if the stipulations in the new agreement are accomplished.

The $17.3 million agreement allows the alliance and the Energy Department to evaluate the plant's original design and find ways to decrease costs.

The alliance will have to develop approaches to financing the gap between construction estimates and the available money the group has to spend.

Mudd said the agreement creates an aggressive schedule for the alliance for the rest of this year.

"The pieces of the puzzle will be put together," he said.

Mudd said refining the plant's design and recruiting more members to the alliance would reduce construction costs, which is estimated to be around $2.4 billion.

After the Energy Department committed $1 billion in June to the project, the alliance agreed to recruit 11 additional members to help finance the rest of the project. The alliance currently has nine members.

Mudd said the project's future in Mattoon is dependent on the alliance's ability to convince energy companies, coal companies and the Energy Department that construction plans are solidified.

"Based on those discussions in the first quarter of next year, we will have to come to a mutual decision," Mudd said. "My job is to make sure it is a go decision."

Paul Thompson, chair of the FutureGen Alliance board, said the alliance's engineering team would consider technology features for the plant in the coming months.

He said the alliance would work with the Energy Department and Illinois to find sources of additional funding in order to prevent construction delays.

"As a result of these activities, we will move toward making a decision on moving forward … in early 2010," Thompson said.

The announcement of the agreement came after the alliance's board of directors hosted its regular business meeting in Mattoon. Typically, the board conducts its meetings in Washington D.C.

Kristina Johnson, undersecretary for the U.S. Department of Energy, met with the board before the agreement was announced.

Johnson said the FutureGen project has great potential as a flagship project to use coal without emitting large amounts of carbon dioxide into the atmosphere.

The plant would convert coal to hydrogen, with the carbon dioxide in the coal being stored underground and turned into gas to fire the plant.

Johnson said the design and development of the project would be a difficult task that requires a continued commitment from the alliance and the Energy Department.

"If we can tap into our collective innovation DNA that helped electrify this country at the first turn of the last century, we can do it again and we can do it here in Mattoon," she said.

Stephen Di Benedetto can be reached at 581-7942 or at sdibenedetto@eiu.edu.

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