The U.S. Energy Department has announced it is going ahead with phase 2 of central Illinois' FutureGen clean-coal project.

In announcing the agreement with FutureGen Industrial Alliance on Monday, Energy Secretary Steven Chu says the department is committed to demonstrating carbon capture and storage technologies.

The FutureGen Industrial Alliance is a group of coal and power companies planning to refit a coal-powered power plant in Meredosia with technology that removes carbon dioxide from coal and stores it underground. Carbon dioxide is a greenhouse gas linked to climate change. The project has $1 billion in federal funding.

The alliance and the Energy Department claim the project will help pave the way for other cleaner and more sustainable advanced coal-burning power plants.

Initial plans to build a plant near Mattoon fell through.