The DOE issued a statement that it will support the FutureGen project with funding. The FutureGen site is in Mattoon, IL. The DOE issued a Record of Decision that clears the way for the FutureGen project to continue with site specific work to further the project development.

A National Environmental Policy Act (NEPA) study of the environmental impact of the project had to be conducted. The DOE has issued the NEPA for the FutureGen project and the project is approved to proceed with construction. The project is estimated to have a total cost of $2.4 billion. The DOE has committed $1 billion in Recovery Act funds for the FutureGen project and the FutureGen Alliance has generated $400 to $600 million. The FutureGen Alliance must seek additional funding to fill the gap between the estimated cost of completion and the funds currently committed.

During the next ten months, the project will conduct further planning and engineering, update its cost estimate and prepare to begin the detailed engineering and construction phase. At the end of this ten month period, a decision will be made to either abandon the project or continue the project. The project will be funded in phases.

On January 30, 2008 the DOE announced a “Restructured FutureGen”. On June 24, 2008, the DOE announced a financial assistance funding opportunity. The deadline for submission of applications for the “Restructured Futuregen” funding opportunity was October 8, 2008. The DOE and NETL have not released any information about the number of applications that were received prior to the deadline.

There are many requirements for a project that is submitted for DOE FutureGen classification and funding. One of the key requirements is that the project be a “commercially viable size”. This is characterized by the requirement that the project produce 1 MM tpy CO2. There are many other requirements defined in the DOE Funding Opportunity Announcement Document No. DE-PS26-08NT00496.

The FutureGen project must be followed through with successful funding of projects by the DOE. The DOE support for solids gasification and carbon capture and sequestration (CCS) is crucial for first-to-market projects in this industry. DOE selection for FutureGen will add credibility to the project and open doors that may not have otherwise been accessible. The support is necessary, because of the difficulty in getting lenders to invest in the projects. The technology is proven and the projects are commercially viable, but the sheer capital investment makes it difficult to close on debt financing in a free market system.

DOE support of solids gasification projects during the early phase industry life cycle will provide early first-to-market projects with a chance for funding. These projects in turn will prove the commercial viability of the industry and future projects will have much easier access to capital.

FutureGen is a good example of the challenges of letting government agencies be involved in engineering and building projects with a time span longer than one year. FutureGen was first created in 2003 when the Department of Energy (DOE) announced plans to build the first zero emissions power plant in the U.S. The project was billed as a state-of-the-art project that would use the latest clean coal technology to generate electricity with zero emissions. FutureGen was expected to foster improvements in technology in the areas of hydrogen production, CO2 capture and sequestration and other processes related to coal gasification.

The project would be a collaboration of the DOE and public corporations in the coal production business, coal gasification processing, power generation and other related businesses. Private sector companies would participate as the FutureGen Alliance, a consortium of thirteen of the leading companies involved in coal and power production in the United States. These companies made significant investments in resources and capital in FutureGen.

The DOE spent a lot of time and money publicizing FutureGen. DOE representatives even participated in private sector conferences and delivered presentations about FutureGen. The site selection was to be a bid process similar to cities bidding to be host of the next olympics. In May 2006, there were 12 sites in seven states that had submitted proposals to be selected for FutureGen. As of July 2006, the number of sites was reduced to four: Mattoon and Tuscola in Illinois and Jewet and Odessa in Texas.

On December 18, 2007, the FutureGen Alliance announced the site chosen for FutureGen was Mattoon Illinois. Shortly thereafter at the end of January 2008, James Bodman, DOE Energy Secretary announced that the DOE was scuttling the FutureGen project after four years of publicity and work by government agencies and public corporations. The official word from the DOE is that there is concern about escalation of material, equipment and labor cost. A valid concern, but it’s never stopped the U.S. government before.

The DOE took their marbles and went home, but the State of Illinois and the FutureGen Alliance are not giving up on the project. The most recent information is that the Illinois Congressmen and women are committed to the dream and continue to fight for FutureGen. The State of Illinois and the FutureGen Alliance are continuing to move forward with plans to build FutureGen at Mattoon.