The Estevan area could become home to a new clean coal power plant, if the billion-dollar project goes ahead, SaskPower says.

On Monday, the Crown-owned utility said it had decided that if the project now being studied gets the green light, it will be located at the existing Shand power station site near Estevan.

The proposed power station has been called a near-zero emissions plant.

It would completely eliminate pollutants such as sulphur and ash and would sequester — perhaps by pumping underground — most of the carbon dioxide it produces.

Scientists believe the increase of man-made carbon dioxide in the atmosphere is causing the Earth's temperature to increase to historically high levels.

If successful, the new Shand project would be the first clean coal plant in the world to be built on a utility scale.

SaskPower had also been looking at building the plant in the Coronach and Willow Bunch area, but on Monday said the Shand location had been selected.

A decision on whether to proceed with the project will be made next year. If SaskPower gets the go-ahead, the plant would begin operation in 2011.