The purpose of this program is to develop a commercial, atmospheric, natural circulation, fluidized-bed steam generator designed essentially as a package boiler, i.e., shop assembled and capable of shipment by rail. It must be capable of firing coal while meeting all environmental standards without the use of auxiliary SO/sub 2/ removal equipment and be competitive with other methods of coal firing in industrial practice. Testing of the two-dimensional cold flow model has allowed visual review and analysis by video tape recordings of the free plate area effect on distribution. Experimental techniques for testing have been developed and the effect of the immersed tube bank on bed fluidization has been noted. The three-dimensional model test program will be used as the final proof test to establish criteria for the Sub-Scale Unit. Design of the Sub-Scale Unit has progressed such that most of the equipment has been specified and selected. Initial site preparation at KDL, Windsor, has been accomplished. Preliminary engineering studies of the demonstration plant facilities have begun. Alternate conceptual design configurations of the plant are being studied as well as for the larger industrial unit. The fluidized-bed boiler design criteria and preliminary engineering information is being gathered.