Abstract The growing environmental consciousness in developed countries has already had a considerable effect on power station construction and operation. Mitigation of ‘acid rain’ has led to widespread retrofitting of bolt-on equipment to reduce emissions of sulfur and nitrogen oxides. This results in increased capital charges, lower efficiency and hence increased power production costs. The next generation of coal-fired power and cogeneration plants need not suffer these penalties. Technologies based on fluidized bed combustion are proving that it is possible to be both cleaner and cheaper. Gasification combined cycles are coming into commercial operation and will provide still greater environmental benefits. Alongside these, hybrid schemes such as the CRE Topping cycle, hold the prospect of efficiencies which may ultimately exceed 50%. Another environmental concern is climate change, to which CO2 emissions from power plants may contribute. Such emissions will be reduced by the use of high efficiency clean coal technology, but in case this is insufficient to meet required CO2 emission reductions, options for the abatement of CO2 from power plants have been studied. Carbon dioxide abatement schemes have been devised based on gasification combined cycles, which offer removal and disposal of 90% of the CO2 produced. The corresponding increase in electricity cost is in the range 30–50%.