Duke, Ind. Gov. mark start of work on plant

Daniels also said the Duke Energy plant would boost southwestern Indiana's economy after years of hard times.

Earlier this year, the U.S. Department of Energy halted a futuristic low-pollution coal power plant called FutureGen announced only months before for Mattoon, Ill., after costs soared for that $1.8 billion project.

That plant was supposed to be virtually pollution-free and produce both electricity and hydrogen--while its carbon dioxide, a leading greenhouse gas, was to be captured and stored deep underground.

Last week, the New York Power Authority and NRG Energy Inc., canceled a $1.5 billion coal-gasification plant in New York, saying it would not produce affordable electricity.

NRG's President and CEO David Crane went further, saying that the project was "in many ways, ahead of its times."

Protogere said Monday that the Charlotte, N.C.-based company believes the Edwardsport plant is all the more important in the wake of cancellations of those and other so-called clean coal power plants.

"We think it's just in time. We have to find ways to burn coal cleanly," she said.

Unlike traditional coal-fired power plants that burn coal to produce electricity, coal gasification converts coal into a synthetic gas that's processed to remove pollutants such as mercury and sulfur.

That gas is then burned in a traditional turbine power plant to produce electricity.

In May, Duke Energy announced that the plant would cost $365 million more than previously expected and boosted its request for a rate increase to state utility regulators.