The Southern Company project is the first time the technology, that converts coal into synthetic gas for electricity generation, will be commercially used.

It is expected to significantly reduce sulfur dioxide, nitrogen oxides and mercury emissions, when compared with conventional pulverised coal-fired power plants, and produce 20 - 25% less carbon dioxide emissions.

To launch the project representatives from Southern Company joined officials from the US Department of Energy, KBR and the Orlando Utilities Commission to break ground at the site.

"For more than a decade, we have been involved with DOE, KBR and other partners in the development of the Transport Integrated Gasification (TRIG) technology," said Southern Company chairman, president and CEO David Ratcliffe.

"We are excited about the opportunity to now apply this new technology to generate power more cleanly and efficiently using our nation's abundant coal reserves."

US Secretary of Energy Samuel W Bodman said the station represents a significant milestone in the President's Clean Coal Power Initiative, which aims to reduce emissions and improve the efficiency of existing and new coal-based power plants.

"Coal is America's most abundant resource and through a combination of government incentives and private sector support for advanced coal technologies, we are working to further harness America's technological strength in developing clean, secure, affordable and reliable supplies of energy," Bodman said.

The TRIG technology was developed by Southern Company and partners DOE and KBR. It has been proven to produce power, chemicals and transportation fuels from coal with less environmental impact and is compatible with high moisture, high ash coals that account for more than half of the world's coal reserves.

Further indicating the US push for clean coal technology was the verbal notice denying American Electric Power unit PSO's proposed Red Rock Coal Plant by Oklahoma Corporation Commissioners.

PSO has proposed to build the $US1.8 billion project with Oklahoma Gas and Electric and the Oklahoma Municipal Power Authority.

Yesterday the OCC issued a verbal notice to PSO that it would deny the application after concerns about the economic and environmental impacts of the plant, although official voting has not yet been completed.