When it was first announced in 2003, FutureGen was billed as a $1 billion prototype for the coal-burning power plant of the future, combining electricity and hydrogen production with the near elimination of harmful emissions. So the U.S. Department of Energy's (DOE) decision late last month to back out of the project, which was meant to build an advanced coal-gasification plant designed to sequester its carbon dioxide emissions underground, is once again fueling debate over the future of clean-coal technology in the United States.

Some energy-policy analysts say that technology development and changing priorities have simply made FutureGen obsolete. In fact, they say that the DOE's plans to instead finance carbon-capture equipment at commercial power plants could actually accelerate the implementation of the clean-coal vision that FutureGen once represented. "The fact that the [FutureGen] project was cancelled reflects budgetary issues more than a lack of confidence in the technology," says Alex Klein, a senior analyst tracking developments in power generation for the consultancy Emerging Energy Research, based in Cambridge, MA. "If the government does, in fact, concentrate its efforts on capture and sequestration, it will be just as significant a development for the industry as if FutureGen went forward."

In a statement released last week, U.S. secretary of energy Samuel Bodman explained that FutureGen had become too expensive. Indeed, FutureGen's predicted price tag has gone from $950 million in 2003 to $1.5 to $1.8 billion today. The DOE had agreed to foot 74 percent of the bill, leaving just over a quarter to the FutureGen Alliance, a consortium of primarily coal-fired utilities.

FutureGen was also overtaken by public concern over rising greenhouse-gas emissions and the emergence of rival commercial projects. Utilities have proposed more than 50 Integrated Gasification Combined Cycle (IGCC) power plants, which are similar in design to FutureGen. Both technologies convert coal into a mixture of hydrogen and carbon monoxide. The commercial IGCC plants burn the mixed gases, producing a more concentrated (and thus easier to capture) stream of carbon dioxide than conventional power plants do. In contrast, FutureGen's design would remove the carbon before the combustion of pure hydrogen in more efficient but as yet unproven ultrahigh-temperature turbines, further reducing the energy penalty caused by carbon capture.

Since the commercial plants are based on existing equipment, they are considerably cheaper to build than FutureGen would have been. For example, utility giant American Electric Power estimates that the 629-megawatt IGCC plants that it wants to build in Ohio and West Virginia would cost about $2.5 billion each, including carbon capture, which is at least 27 percent cheaper per megawatt of power produced than projected costs for FutureGen.