RWE npower has announced plans to build a new £1 billion coal-fired power station that it says will reduce harmful emissions by 22 per cent.
Using new carbon capture and storage technology, the power station will be considerably cleaner than its predecessors, putting around two million tonnes less carbon into the atmosphere.
The new 1,600MW facility will replace an existing power station at Tilbury in Essex and is scheduled to come on stream in 2013.
"Coal is a vital component of the UK's future generation mix, but the environmental impact must be addressed," said Andy Duff, RWE npower's chief executive.
"A 'supercritical' coal plant on its own would result in a significant net reduction in CO2 levels, but we have also chosen to make the power station ready for carbon capture and storage technology.
He added: "At this time, there are still many financial, legal, regulatory and technical hurdles to clear on CO2 transportation and storage technology.
"However, it is too important to ignore and we are committed to further research and development and are assessing our next steps in this area."
This announcement follows news last month that RWE npower intended to spend £900 million on a new gas-fired power station, either in Wales or Nottinghamshire, and three new wind farms.
Around 80 per cent of the UK's electricity comes from coal and with a number of power stations due to close down, concern for the environment is not the only reason for the government's push towards renewables.