Secretary of Energy to Announce $19.7 Million Grant to New Mexico for Clean Coal Plant

Project Will Help Meet President's Commitment to Clean Coal and Address National Energy Priorities

Santa Fe, NM - Secretary of Energy Spencer Abraham today announced that Peabody Energy's Mustang Energy Project has been selected to receive a grant from the Department of Energy under the second round of competition in President Bush's 10-year, $2 billion Clean Coal Power Initiative (CCPI).

The technologies developed under CCPI will help maintain abundant coal resources as a cornerstone of the Nation's future domestic energy portfolio, particularly for power generation. The priorities for this round of competition were technology advancements for gasification-based electricity production, advanced mercury control, and sequestration or sequestration-readiness.

"Peabody Energy is undertaking a vital challenge that has the very real potential of not only improving our Nation's energy security, but improving our environment as well," Secretary Abraham said. "The Peabody Mustang Clean Coal Project, including its unique Airborne Process, advances the President's Clean Coal Power Initiative by enabling us to make maximum use of coal, our most abundant energy resource. But the project is unique in that it also advances President Bush's Clear Skies Initiative by controlling harmful emissions from the plant, and doing so at a success rate we don't often see in an industrial setting."

The Peabody Mustang Clean Coal Project teams Peabody Energy with co-sponsor Airborne Clean Energy, along with Veolia Water North America, and Icon Construction, in a commercial-scale demonstration of the "Airborne Process" scrubber, regeneration system, and fertilizer production systems at the Mustang Energy Company LLC's 300 megawatt coal-fired Mustang Generating Station in Milan, New Mexico.

The $79 million project, for which the Energy Department will provide $19.7 million, will develop an innovative and cost-competitive multi-pollutant control process for achieving 99.5 percent removal of sulfur dioxide, 98 percent removal of SO3 (sulfuric acid mist precursor), 98 percent removal of nitrogen oxides, and 90 percent total system removal of mercury from plant emissions, while turning the byproducts into a high-quality high-value granular fertilizer.

The Clean Coal Power Initiative, initiated by President Bush in 2002, is an innovative technology demonstration program that fosters more efficient clean coal technologies for use in new and existing electric power generating facilities in the United States. Candidate technologies are demonstrated at full-scale to ensure proof-of-operation prior to commercialization.

Technologies emerging from the program will help to meet the President's new environmental objectives for America embodied in the Clear Skies Initiative, Global Climate Change Initiative, FutureGen, and the Hydrogen Initiative. Early CCPI demonstrations emphasize technologies that are applicable to existing power plants and also include construction of new plants. Later demonstrations will include systems comprising advanced turbines, fuel cells, gasification processes, hydrogen production, and other technologies. CCPI, an industry/government cost-shared partnership, responds to President Bush's commitment to increase investment in clean coal technology.

Successful implementation of CCPI will solve many of the environmental issues associated with fossil-fuel use and provide high-efficiency, low-cost, future generating capacity. Program benefits are expected to be substantial.

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R-04-330