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Underground coal gasification in South Africa

Last week I attended several meetings in Johannesburg, South Africa, relating to underground coal gasification (UCG). The meetings were organised by the inimitable Rosemary Falcon of the Fossil Fuel Foundation (FFF), an organisation of 3,500 members which runs in a non-profit manner to promote clean coal issues in South Africa.

Coal is a mainstay in South Africa, providing 94% of the country’s electricity and as much as 30% of the petrol, diesel and other liquid fuels. The country is about to bring in a carbon tax which could be extremely expensive for organisations such as Eskom, the major power producer, and Sasol. Recent studies have shown that the potential for CCS in South Africa is below 1.5%. A J Kinghorn (also known as “Rocky”) gave an extremely honest overview of the energy situation in the RSA at the moment, describing Eskom as being in a “precarious financial situation”. The price of electricity in RSA, although starting relatively low, has trebled in the last decade and is likely to double in the next 5 years. New environmental regulations on emissions of sulphur and nitrogen from coal plants, which should start to apply within the next few years, will add even further cost to electricity. If the electricity price does double, then many industries will fail, collapse or simply leave the country. In response to this possibility, many companies are now investing in diesel generators, small scale gas generators, solar panels and wind turbines, spreading their investment across numerous energy alternatives, in order to ensure that they will have consistent power in coming years.

The UCG workshop began with an overview by myself on the global trends and challenges for coal, concentrating on where UCG may fit in the energy mix. The meeting continued with an excellent range of papers covering everything from technical studies at bench scale through to full-scale projects, regulatory issues and the need for standardisation and information exchange within the UCG industry. Perhaps the best received paper was that of Krzysztof Stanczyk, GIG, Poland, who gave an excellent overview of TOPS (Technical Options for Coupled UCG and CCS) project. The TOPS project is worth 20 million euros and is being run by GIG in collaboration with an impressive number of international organisations and bodies, including Imperial College and the University of Glasgow. The pilot plant has been established in an abandoned seam at the Barbara mine in Upper Silesia, Poland. The project has fired around 10 t/day during 2-3 months over the summer of 2014 in 5.5 m thick seams at a depth of 430m. The results of the test are still coming in, but the next phase will be 10-20 times larger, at around 20 MWth. The operators are looking for a suitable location via a feasibility study, with an aim to make the plant either a boiler burning UCG gas, co-combustion of UCG gas with coal in an FBC system (to provide combined heat and power), a gas turbine or a gas engine. Krzysztof’s paper was extremely well received by the mixed audience as many of the delegates were delighted to see such raw data and information being given freely in a public forum. Many of the current UCG projects are effectively highly guarded secrets with little information making it into the public domain.

Johan Van Dyk of Africary (African Carbon Energy) provided details of a proposed UCG project which hopes to kick off in RSA in 2015 and be operational by 2017. The proposed project is a collaboration between many established companies. UCG is seen as ideal for this site as it is efficient (25% lower CO2 emissions from the same volume of coal than conventional pulverised coal combustion). The system also uses 90% less water which, in areas such as RSA, is very important. The project will create new jobs, will prove a technology which will be viable in economically depressed areas of SA, away from current mines, and is much cleaner than fracking.

Mark van der Riet, Eskom, talked about the Majuba UCG system in RSA which has been licensed from Exoenergy in Canada. The plant is a matrix of wells, rather than the 2 well system used in most UCG projects. It was one of 27 sites in RSA which have been identified by RSA as suitable for UCG. Mark highlighted a particular challenge facing the plant: the regulators require research on potential emissions etc before permitting a project. However, this research requires that the project be allowed to operate in order for the research to be carried out. So the plant must comply with regulations before it can be operational but the regulations cannot be determined until the plant has been operational long enough to determine what regulations are applicable. Thus the plant is sitting in a vicious circle limbo situation.

Wietsche Roets, Dept of Water and Sanitation, expanded on this, emphasising that it is clear that a site-specific licence will be required. In the past it has taken up to 8 years for such water licences to be approved but it is hoped that things will work faster for Eskom. However, it is still the case that more evaluation is required to set resource quality objectives and that there will be site-specific concerns such as watercourses, biota and so on.

Alan Golding of Analytika Holdings, Botswana, gave an overview of the energy situation in the country. Botswana has 212 Bt of coal resources and only 3.5 Mt/y is used, for internal consumption. Several potential UCG sites have been identified and 3 companies have taken out licences.

Neil Scott, a lawyer from Australia, gave an overview of the legislative challenges for UCG – tenure, operational impact (environmental) and royalties/taxes. Queensland has developed its own UCG legislation, categorising UCG as “mineral F” in the Mineral Resources Act. There are no operational regulations as yet, although these are being planned and are likely to be in the form of site-specific permits. The future for UCG in Australia may be more optimistic than elsewhere since regulations are already in place and more are being developed. Plus there are increasing gas shortages on the eastern seaboard which would be a good market for UCG gas.

Julie Lauder of the UCG Association gave a clear over view of the UCG industry and the challenges it faces. Her message was clear – those involved need to work together and to exchange information more freely. The industry also needs to establish guidance and guidelines on:

– Licensing and regulations

– Resource classification

– Public engagement

– Best practice, industry consensus on standard operating procedures

– Industry-wide objectives.

The documentation on UCG is sparse and so investors, governments and the public are wary. The IEA CCC report Underground coal gasification, CCC/151 by Gordon Couch (2009) is one of the best sources of information available (download for free from our bookstore, http://bookshop.iea-coal.org.uk/reports/ccc-151/82191). But the industry need to work together to be “proactive as a collective” to achieve their joint aims.

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