The Washington, D.C.-based FutureGen Alliance today named Mattoon, Ill., as the site for a planned $1.5 billion next generation clean coal project.

Mattoon beat out another site in Illinois and two locations in Texas for the near zero emissions coal-fueled power plant.

"This decision represents the culmination of years of hard work and dedication, and we are honored that the FutureGen Alliance and the U.S. Department of Energy have entrusted us with this groundbreaking project," said Illinois Gov. Rod Blagojevich.

"FutureGen's 'near zero emission' coal-gasification technology holds great promise to revolutionize our nation's coal industry and ensure that coal continues to be an integral part of our energy future while reducing the greenhouse gases that cause climate change."

The alliance is a public-private venture with most of the backing coming from the U.S. Department of Energy.

Alliance members include American Electric Power Service, BHP Billiton Energy Coal, China Huaneng Group, Consol Energy, E.ON U.S., and Peabody Energy.

The plant, expected to be online in 2012, will be designed to generate electricity while capturing and permanently storing carbon dioxide underground.

The FutureGen project will also produce hydrogen and byproducts for possible use by other industries.