WASHINGTON, DC - Today, the Department of Energy's Office of Fossil Energy announces the authorized start of the next phase of the FutureGen project with the FutureGen Alliance after agreeing to terms on the project phase known as Budget Period 1 (BP-1). In total, this phase of the FutureGen project is valued at $42.5 million and DOE is responsible for providing funding of $31.5 million. This funding will provide for the project's conceptual and preliminary designs, final site selection, and the negotiation of a site agreement. Additionally, the Department of Energy is responsible for completion of the NEPA process (at an approximate cost of $25 million).
In addition to providing this phase of project funding, the agreement also outlines updated overall cost estimates for the project.
Under the agreed-upon terms of the 74% government, 26% industry cost share agreement, the initial total project cost estimate was $950 million, with a government share of $700 million. While the scope and size of the project have not changed, the price of construction materials and equipment, labor, and other heavy construction expenses have significantly increased, driving the total estimated cost of the FutureGen project to $1.7 billion through 2016, offset by about $300 million in anticipated power revenue. The DOE portion of the net total project cost is expected to be slightly over $1 billion and the FutureGen Alliance share is expected to be just under $400 million.
Given this vast increase in projected cost, both DOE and the FutureGen Alliance will review progress and expenses before committing to funding for subsequent phases of the project.
FutureGen is a first-of-a-kind effort that, if successful, will demonstrate high-efficiency capture and storage of greenhouse gases, illustrating how the United States can use its 250-year supply of coal for energy in an environmentally sensitive way. In addition, the technologies that will be proven through FutureGen could be used by developed and developing nations throughout the world to reduce their greenhouse gas emissions. When completed, the FutureGen plant will be the world's first power plant to use coal for the production of electricity and hydrogen while capturing almost all carbon dioxide and criteria pollutants, leaving near-zero levels of atmospheric emissions.