General Electric Co and Shenhua Group Corp said that they plan to set up a joint venture to develop and promote clean coal technology.

GE in a statement said that a memorandum of understanding, signed as part of a wider US China clean energy cooperation pact aims to combine GE's expertise in gasification and cleaner power generation technology with Shenhua's expertise in building and operating coal gasification and coal-fired power generation facilities.

It added that the two companies hope to set up a company by mid-2010 to improve the cost and performance of commercial-scale gasification and integrated gasification combined cycle.

GE said that "This includes industrial coal gasification applications in China as well as jointly pursuing the deployment of commercial scale IGCC plants with carbon capture.”

IGCC plants heat coal to produce a synthetic gas, which then turns a turbine to generate electricity. They typically produce about 20% less carbon dioxide than conventional pulverized coal plants, which burn coal to boil water and create steam. IGCC is also referred to as coal gasification.

In addition, IGCC plants can produce more power than conventional generators with the same amount of coal.

Mr Steve Bolze president & CEO of GE Power & Water said that "Coal plays an important role in the economies of the US and China and gasification technology allows us to use this abundant and low cost resource in a much cleaner way.”

Mr Bolze said that "Additional commercial scale IGCC and carbon capture facilities are needed though to further develop the industry and provide an opportunity for cost reduction and certainty, and to develop a carbon sequestration service industry.”

(Sourced from Dow Jones Newswires)