
Magnetohydrodynamic (MHD) power generation involves the use of electrically-conducting fluids to generate electrical energy rather than solid conductors and rotating machinery. In essence, an MHD generator converts heat directly into electricity.
The concept behind an MHD generator is to move an electrically-conducting fluid through a nozzle in the presence of a magnetic field at extremely high speed. This is analogous to the copper coils rotating within a magnetic field in a traditional generator. The fluid is typically a gas/plasma heated by combustion but theoretically liquids can also be used (with an appropriately massive amount of power being applied to move them).
MHD was among the futuristic technologies promoted in the "Space Age" of the 1960s, but never came to fruition in actually producing electricity on a commercial basis. It seems that we simply have not gotten good enough at containing supersonic streams of gas and coal ash at temperatures approaching those on the surface of the sun. MHD research for electricity production was mostly abandoned upon the development of combined-cycle power plants based upon gas turbines using natural gas as fuel. Nuclear energy may have also been seen as a more suitable pursuit as well.

An article in the June 1969 issue of Popular Science discusses MHD, speaking of virtues such as increased efficiency, lower monetary expense, reduced air pollution, and increased reliability. Note that the MHD plant shown does not include a steam generator for subsequent operation of a steam power plant. Such a configuration would have a thermal-to-electrical efficiency of about 20%. Also, the mention of the turbine bearings as being the cause of the 30-40% efficiency of steam power plants reinforces the fact that this is a popular science publication. The 30-40% efficiency is imposed by the Second Law of thermodynamics – a heat engine working between a heat source and heat sink has an efficiency dictated by the difference in temperature between the heat source and sink, with the Carnot Efficiency being the theoretical maximum.
Burning the coal in pure oxygen simplifies carbon sequestration, denitrification, and desulfurization efforts. This results in an efficiency gain. Whether it is enough to overcome loss due to oxygen generation is a matter of further discussion.