A large-scale low-emission coal-fired power plant like the FutureGen, project, which is in jeopardy after the U.S. government pulled its support last week, is key to giving so-called cleaner coal technologies a chance against entrenched fossil fuel approaches, said Greg Boyce, CEO of coal giant Peabody Energy.

"Everything we have done is to accelerate the deployment of the first large-scale plant," he said at the Clean-Tech Investor Summit in Palm Springs, Calif., Thursday.

Peabody (NYSE: BTU), which was part of FutureGen, along with other coal and utility companies, also is involved in two similar large-scale "near-zero" emission plants: GreenGen in China and Coal21 in Australia.

Controversy over traditional coal-fired plants has been heating up. Among other incidents, New York Attorney General Andrew Cuomo in September subpoenaed five energy companies to determine whether plans to build coal-fired plants would result in previously undisclosed financial risks from greenhouse-gas emissions, and New Jersey filed a federal court appeal seeking review of an Environmental Protection Agency decision allowing a coal-fired plant in Pennsylvania. In addition, Interstate Power and Light Co. said Friday it would retire its coal-fired plants and switch to natural gas.

Because of all this, some companies have been pushing for new technologies to clean up coal’s dirty image (see Coal Under Fire and Peabody Energy Takes a Step Towards Green).

But even cleaner coal technologies are controversial, because coal mining has environmental impacts and analysts have said some of the technologies still are dirtier than other alternatives (see Cleaning Up Coal).

Still, as energy demand continues to rise, coal usage is only expected to increase. The U.S. Department of Energy expects world coal consumption to increase by 74 percent from 2004 to 2030, reaching 199 quadrillion Btu annually, according to its 2007 outlook.

"More than 155,000 megawatts of coal fuel generation is under construction around the world, representing over 500 million tons of annual coal use," Boyce said. Some industry insiders hope cleaner coal technologies can help meet the growing energy demand while lowering the impact on the environment.

FutureGen, for example, was designed to turn coal into gas and then to capture carbon-dioxide emissions produced from the process and stuff them underground.

Boyce said projects like FutureGen would help the industry as a whole figure out whether, and how, carbon sequestration could work.

Other technologies include converting coal into natural gas or fuel (see Peabody Energy Takes a Step Towards Green and Cleaning Up Coal).

But the question remains: Who will pay to clean up coal?

FutureGen, for example, is estimated to cost about $1.8 billion. The federal government was expected to pick up 74 percent of the tab, but reneged last week, citing spiraling price increases that have almost doubled from the original price estimate of approximately $950 million (see DOE Pulls Back on FutureGen's Reins, Clean Coal Firms Not Worried About FutureGen Setback and Picking a Fight with the DOE).