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Headquarters of Ameren Missouri

The Department of Energy on Tuesday announced agreements with Ameren Corp. and the FutureGen Industrial Alliance that formally commit $1 billion in stimulus funding to the revised FutureGen project.

The centerpiece of the new FutureGen is an idled oil-fired unit at Ameren's Meredosia plant in western Illinois that would be re-engineered to run on coal.

Nearly all of the plant's carbon dioxide emissions would be captured and stored deep underground at a yet-to-be-determined site in Southern Illinois.

Plans for the new FutureGen initiative were announced last month in Washington. Officials said Tuesday's agreements represent progress toward making it a reality.

"Today's milestone will help ensure the U.S. remains competitive in a carbon constrained economy, creating jobs while reducing greenhouse gas pollution," Energy Secretary Steven Chu said in a statement.

But the revised FutureGen project still has a long way to go, and wouldn't be complete until at least late 2015.

St. Louis-based Ameren said the agreement with DOE paves the way for it and its partners, Babcock & Wilcox and Air Liquide, to begin work on the conversion of Meredosia.

The first step would be determining whether the project is commercially and technically viable, Ameren said. If so, the company would require the Illinois Legislature to pass legislation to help recover costs.

Only then would the company's board authorize construction, Ameren said.

Meanwhile, the DOE and FutureGen Industrial Alliance are tasked with choosing a site in Illinois for the carbon storage and building a pipeline that would move than 1 million tons of captured carbon dioxide per year from the Meredosia plant.

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