According to the announcement, “Under this strategy, the U.S. Department of Energy (DOE) will join industry in its efforts to build IGCC plants by providing funding for the addition of CCS technology to multiple plants that will be operational by 2015.” The original strategy involved developing a single plant.

The announcement goes on to state, “DOE’s investment would provide funding for no more than the CCS component of the power plant – not the entire plant construction, compared with the FutureGen concept announced in 2003 where the federal government would incur 74% of rising costs.” The initial plan called for DOE funding for the entire cost of the plant.

The DOE also issued a request for information (due on March 3, 2008) seeking input on the costs and feasibility for development of carbon capture and storage (CCS) technology.

This morning the Washington post reported, “…the Bush administration might drop its support for a $1.5 billion coal-fired power plant designed to store greenhouse gases underground, citing mounting cost estimates and other possible technologies.” Later in the day Platts reported, “The US Department of Energy will likely divide some of its funding for the scrapped FutureGen power plant between a handful of carbon capture and storage projects…”

FutureGen CEO Michael Mudd responded via a press release by stating, “The Alliance remains committed to keeping FutureGen on track. We owe it to the people of Illinois, to the Alliance members who have contributed significant funds and resources to bring the project to this stage and to society which depends on technology to provide clean, affordable and secure energy.”

The reports of the redistribution of funds by the DOE seem to be accurate. In recent days there have been announcements of a variety of new clean energy projects including a partnership with the state of Hawaii, investment in cellulosic bio-refineries and funding for hybrid plug-in development in Michigan.

We’ll keep an eye on the DOE to see if any funds specifically slated for carbon capture and storage are announced in the near future.

In this video (click ‘read the rest’ to view) courtesy of E&E TV Future Gen Alliance CEO Michael Mudd explains the current situation.

The site selection for their experimental plant was seen as a major step forward for the project, which aims to start generating electricity in 2012. Within hours of announcing the selection a representative from the Department of Energy cautioned about spending on the project.

Deputy Assistant Secretary For Fossil Energy James Slutz made the following statements.

“As the Department of Energy (DOE) has discussed with the FutureGen Alliance for the past several months, projected cost overruns require a reassessment of FutureGen’s design.”

“DOE believes that the public interest mandates that FutureGen deliver the greatest possible technological benefits in the most cost-efficient manner. This will require restructuring FutureGen to maximize the role of private sector innovation, facilitate the most productive public-private partnership, and prevent further cost escalation.”

This is a obviously a statement indicating the project is going way over budget. The most telling message is the desire to, “…maximize the role of private sector innovation…” So not only is the project over budget but the DOE would also like the private sector partners to contribute a larger percentage of the funds required to continue.

We don’t know what this means with respect to the timeline of the FutureGen project. The Department of Energy will release details on the restructuring in January of 2008.