A newly signed memorandum of understanding (MOU) for the purchase of electricity produced by the Texas Clean Energy Project (TCEP) is an important step forward for what will be one of the world’s most advanced and cleanest coal-based power plants, funded in part by the U.S. Department of Energy (DOE).

Under the MOU, CPS Energy—a municipally owned utility serving San Antonio, Texas—will purchase electricity generated by the first-of-a-kind commercial clean coal power plant, starting in mid 2014. TCEP, a 400-megawatt integrated gasification combined cycle (IGCC) facility located about 15 miles west of Odessa, will capture 90% of its carbon dioxide (CO2)—approximately 3 million tons annually—more than any power plant of commercial scale operating anywhere in the world.

The captured CO2 will be used for enhanced oil recovery (EOR) in the West Texas Permian Basin, a process that both prevents the greenhouse gas from entering the atmosphere and enables more oil to be produced from regional oilfields. Additionally, the plant will use CO2 and a portion of the coal synthesis gas produced by the plant to make urea, a high-value chemical. Smaller quantities of commercial sulfuric acid, argon, and inert slag will also be marketed.

IGCC is a technology that turns coal into synthesis gas, and then removes most impurities before it is combusted to produce energy. EOR, which is a way to squeeze additional hard-to-recover oil from older fields, is an increasingly important contributor to U.S. oil supplies, currently accounting for about 13% of domestic production. The permanent geologic storage of CO2 is a vital component of carbon capture and storage technology, which many experts believe is a major option for helping reduce atmospheric emissions that could contribute to global climate change. DOE’s Office of Fossil Energy (FE) has been in the forefront of research and development advances in all of these areas.

TCEP was a third round selection under FE’s Clean Coal Power Initiative, a cost-shared collaboration between the Federal government and private industry aimed at stimulating investment in low-emission coal-based power generation technologies through successful commercial demonstrations. In January 2010, DOE awarded a cooperative agreement to Summit Texas Clean Energy to develop the 8-year project. The agreement spans the design, construction, and demonstration of an IGCC power plant that can co-produce high-value products and capture CO2. FE’s National Energy Technology Laboratory implements the Clean Coal Power Initiative and manages its projects.

CPS Energy signed the memorandum as one of their many efforts to protect the environment by using a clean energy plan that includes coal power. To balance low utility bills for their customers with environmental responsibility, CPS uses a diverse mix of fuels to provide energy. The utility’s current fuel mix is 39% nuclear, 41% coal, 5% natural gas and oil, 5% purchased power, and 10% renewable energy, including wind and solar energy and landfill-generated methane gas. The Texas Clean Energy Project helps CPS meet its goal of providing reliable energy to meet their customers’ increasing energy demand while maintaining a healthy environment.