Coal company Peabody Energy plans to help build China's first coal-fired power plant that will use carbon capture and storage to avoid nearly all emissions.

The $1 billion project, dubbed GreenGen, is being led by a team of Chinese equity partners. Groundbreaking will take place in early 2008, with operations forecast to start in 2009.

The plant will be located near Tianjin, southeast of Beijing, in an area near a concentration of chemical facilities that could possibly use GreenGen's syngas power and byproducts.

GreenGen will begin with a 250-megawatt capacity, ramping up to 650-megawatts by the final phases. It will have the capacity for hydrogen production, too, but advanced carbon dioxide capture for coal processing will be the focus. Coal is used to power nearly 75 percent of the country's electricity.

Managing partner China Huaneng Group is the project's majority partner; Peabody, in contrast, will own a 6 percent stake. Other partners include China Datang Corp., China Huadian Corp., China Guodian Corp., China Power Investment Corp., Shenhua Group, China National Coal Group and State Development and Investment Corp.