Representatives of the coal industry reacted strongly against the DoE last week, after it effectively canned a $1bn cutting edge project to demonstrate a clean coal power station.

The DoE issued a release on January 30th saying that it would not be funding key elements of a clean coal plant planned by the 13-company FutureGen Alliance.

The joint venture would have produced a 275MW plant demonstrating not only the separation and capturing of carbon dioxide underground as the coal was burned, but also the production of hydrogen from coal.

The DoE will now concentrate on funding the carbon capture and storage (CCS) aspect of clean coal, rather than the production of hydrogen from coal. It has issued a request for information to see how feasible it is to meet FutureGen's goals. It then plans to make funding available to plants who can support clean coal technologies. The FutureGen project will have to re-bid alongside other plants for the funding.

FutureGen still gets $156m of the $241 million that the DoE has proposed in the fiscal 2009 energy budget to demonstrate technologies for cost-effective carbon capture and storage for coal-fired power plants.

"The department was on the hook for 74 per cent of the total project costs," said DoE spokesperson Julie Ruggiero, who added that the project cost rose from $950bn in 2004-5 to $1.8bn in March last year. The restructuring will accelerate the commercial adoption of clean coal plants to around 2015-16, according to the DoE.

However, the FutureGen alliance hit back at the DoE's claims, releasing a fact check document that argued the Department's current estimated share of the costs was $1.1bn rather than $1.8bn. It added that the increase in costs was due to inflation in the price of raw materials rather than any problems with the project.

"This was the signature technology project to remove carbon safely from coal-based power generation," lamented Luke Popivich, spokesperson for the National Mining Association.

While the row over FutureGen continues, the US Senate will vote this week on two economic stimulation package. One was approved by the House of Representatives last week. The other, created by the Senate Finance Committee, includes tax breaks for energy-efficient residential improvements that lapsed last December, alongside support for the solar and wind industries that will otherwise expire at the end of this year.

The renewable energy industry is desperate to see the incentives extended, arguing that the burgeoning adoption of clean energy technologies will be put at risk this year unless investors can see a degree of certainty over the aupport they will receive.