In the context of CO2 capture and storage, the oxyfuel technology provides a promising option applicable in centralised power production schemes. This technology is based on combustion with pure oxygen instead of air and the flue gas mainly consists of CO2 and H2O. The work presented in this paper is focused in the application of the oxyfuel technology in a lignite-fired power plant. Significant design issues are the required extended flue gas recirculation in order to provide the ballasting effect of the absent N2 and moderate the furnace temperatures. Therefore, a modified design of heat exchange surfaces of the oxyfuel steam boiler was formulated and was compared to a conventional air-fired boiler. A typical modern Greek air-fired power plant has been used as reference. The dominating factors that affect the dimensioning of the oxyfuel boiler are the higher radiative heat transfer – due to the high concentrations of CO2 and H2O in the flue gas – and the different flue gas mass flow, compared to a conventional air-fired boiler. For the determination of the thermodynamic cycle characteristics, simulations were made with the use of a thermodynamic cycle calculation software [Stamatelopoulos GN. Calculation and optimisation of power plant thermodynamic cycles, VDI-Regulations, Series 6, Nr. 340. Braunchweig, Mechanical Engineering Department; 1996 [in German]].