AES has been granted permission by the authorities in the US state of Indiana to build a new gas-fired combined cycle plant and convert an existing coal-fired power plant to run on natural gas.

The Indiana Utility Regulatory Commission has approved a request filed by AES subsidiary Indianapolis Power & Light (IPL) to invest $600 million into a new 650 MW CCGT power plant near Martinsville and $36 million to convert two units at the Harding Street power plant totalling 200 MW from coal to natural gas.

AES said in a statement that the two projects would enable IPL to meet future energy needs and reduce reliance on coal. The combined cycle project will start construction in late 2014 and is expected to start operating in 2017. The conversion of the Harding Street units will start in late 2015 and be completed by early 2016.

IPL will fund the projects through equity (45 per cent) and debt (55 per cent).