We have the power to help begin a new eraBy the end of the...

We have the power to help begin a new era

By the end of the decade the North East may be beginning a new coal era, even as the UK switches off its last coal-fired power station. PETER McCUSKER reports

LAST year was a record one for coal-fired power in UK with its contribution to the nation’s electricity mix shooting to 43% from 30% in the previous year.

Coal’s global price had plummeted due to competition from US shale gas and UK operators subsequently opted to burn this cheaper, imported coal.

This won’t last as emissions regulations will lead to the loss of 10% of UK coal-fired power capacity by 2015 and possibly all coal-fired incineration by 2020.

But far from this being the end of the UK coal story there is the possibility that by the end of the decade it may be entering a new era with the potential to create hundreds of new jobs in the North East.

Newcastle-based Five-Quarter has launched a new drive to fully commercialise the potential of the earth’s remaining 850 billion tonnes of coal.

They are amongst a host of global teams now working on commercial-scale Underground Coal Gasification (UCG) schemes, using directional drilling techniques from the shale and oil industries.

One Australian company, Linc Energy, has recently attracted the attention of Russian billionaire and Chelsea FC owner Roman Abramovich.

Abramovich, who made his money in the oil industry in the 1990s, visited its UCG demonstration facility in Chinchilla, Queensland, late last year and is rumoured to be interested in taking a stake in the technology.

Earlier this month London-based Wildhorse Energy announced it had signed a deal with E.ON Hungary which it says marks a defining transition in UCG’s story.

A spokesman for Wildhorse said: “The agreement between E.ON and ourselves is the first big step in commercialising this technology in Europe – which could have a huge impact on the energy dynamic of the region due to the historic high dependence on Russian gas imports.

“The agreement sets out a feasibility process ahead of the establishment of Europe’s first UCG commercial demonstration project.”

It was in the Durham Coalfield in 1912 that the first UCG trials were conducted.

Prof Dermot Roddy, a director of Five- Quarter, said: “The UK was the originator of UCG technology, when Sir William Ramsay conducted exploratory experiments in the Durham coalfield in 1912.

“World War One put a stop to these and UCG was later neglected in the UK while its abundant domestic reserves of oil and gas were exploited. But the use of directional drilling technologies, an increased emphasis on energy security, and rising oil and gas prices has led to a renewed surge of interest. The technology is now maturing and reserves have been accessed with extended reach wells penetrating more than 20km laterally at depths of over 400 meters.”

In the UK, the Coal Authority has granted 18 UK licences to companies keen on using UCG to access some of the UK’s remaining reserves.

Five-Quarter, which was spun out of the Newcastle University, has the licence for a 400sq km area of the North Sea, stretching from the mouth of the River Tyne up to the Scottish border.

One of the UK’s major oil and gas industry players has also entered the UCG market.

Clean Coal Limited was formed five years ago by Rohan Courtney OBE, who helped to turn Tullow Oil into one of Britain’s biggest companies.

It has secured five UCG licences including one off the North East coast at Sunderland.

During the UCG process oxygen and steam are pumped through a directionally-drilled borehole oxidising the coal.

As the supply of oxygen is limited, the coal is partially oxidised, forming a gas that still retains around 80% of the original energy content of solid coal.

This syngas – a combination of hydrogen carbon monoxide, carbon dioxide and methane – is then recovered from a production borehole and can be used in power generation or conversion into transport fuel.

The proposed UCG gasification plants will all come with a carbon capture and storage facility, with Five Quarter aiming to pipe the CO2 back underwater.

The carbon dioxide which is left in the gasified seams is being explored as one storage option and some C02 recycling schemes are using the carbon dioxide for enhanced oil recovery in subsea oil and gas fields.

The reason for the closure of the UK’s coal-fired power plants is that power generated from coal is the highest emitter of carbon dioxide, at a rate of around 850g per kWH.

The Government is aiming to set a limit of around 400g per kWH by 2020 and eventually reduce it down to around 50g per kwh.

Despite some concerns over the UCG process the UK Underground Coal Association say concerns over possible groundwater contamination and subsidence can be mitigated through careful site selection, project design, and monitoring.

The spokesman said: “There is a host of issues that you need to take into account – and this is where site selection is crucial. UCG can be used to utilise poor quality coals, deep coals, and seams with unfavourable geology but is best suited to deep coal seams over 500 metres – both on and offshore.

“As an energy source, in a world where energy is becoming increasingly scarce, UCG is an ideal answer. In the UK alone, the British Geological survey compiled a report showing that we have a minimum of 7bn tonnes of onshore coal suitable for gasification.

“In effect, using UCG means we have the capacity to provide energy for the UK for the next 300 years at current consumption.”

The Department for Energy and Climate Change said: “These reserves have the potential to provide security of future energy supplies long after oil and natural gas are exhausted. “

Roddy believes Five-Quarter will need to raise around £200m to get its project up and running. It recently received £15m from the UK Government to support its ambitions.

Five Quarter says 75% of the North East’s coal reserves are still underground and as it presses on with its plans to use this to generate low-carbon power, a whole new industry could be created in the region with the potential to create thousands of new North East jobs.

http://www.nebusiness.co.uk/business-news/energy/2013/03/27/we-have-the-power-to-help-begin-a-new-era-51140-33058709/