Select Committee on Environmental Audit Memoranda


APPENDIX 7

Memorandum from ACMMO, The Association of Coal Mine Methane Operators

1.  INTRODUCTION TO ACMMO

  The Association of Coal Mine Methane Operators (ACMMO) represents 13 companies involved with the extraction and use of methane from disused coal mines to generate electricity. The Association has just been formed to represent what is a very young industry, but one with the potential of:

    —  making a significant contribution to the country's energy needs;

    —  substantially reducing greenhouse gas emissions.

  The development of Coal Mine Methane (CMM) capture and conversion could make a significant contribution to achieving the Government's target of 10 per cent of electricity being generated from renewable sources by 2010 if it is accredited as an eligible source.

2.  SUMMARY OF RECOMMENDATIONS

  Coal Mine Methane (CMM) is a hazardous waste gas which escapes into the atmosphere from abandoned coal mines.

  CMM is a major contributor to the UK's greenhouse gas emissions and its capture to generate electricity will significantly reduce the level of these emissions in a cost effective way within a relatively short lead time.

  CMM is a clean source of indigenous energy which, with the stimulus of RO status, could contribute additional 1 GW to the country's electricity requirements by 2010.

  Government policy is to use the renewables obligation as one weapon in the fight to tackle climate change. Coalfield-wide power generation from CMM would provide a powerful advance towards this objective.

  Methane from landfill sites is accorded renewable status and so contributes to the Renewables Obligation, but CMM has not so far been accorded this status.

  CMM provided to dedicated industrial burner tip users is exempt from the CCL but not the electricity generated from its use as clean fuel.

  In recognition of the significant reduction in greenhouse gas emissions that would result, as well as assisting the Government to meet its renewables target, CMM should be accorded green certificate status and be allowed to contribute to electricity suppliers' Renewables Obligation.

  Coalfield community regeneration is a Government priority; CMM helps to drive this policy forward at no cost to the Exchequer.

  Worldwide interest in ACMMO members' technology has been immense but, to develop totally the potential export market, the industry needs to establish fully a solid base in this country.

3.  COAL MINE METHANE (CMM)

  In a typical UK coal mine up to 80 per cent of the coal may be left behind when the mine is closed. The mining process causes the remaining seams to fracture and de-stress allowing the methane trapped in the coal to escape. This is either vented to atmosphere in a controlled way or escapes haphazardly to the surface. CMM reserves could continue to vent to atmosphere for over 50 years compared with an average life of 20 years for landfill methane.

  There are more than 900 closed deep coal mines in the UK from which it is estimated that a minimum of 300,000 tonnes of CMM, equivalent to 6.3 million tonnes of carbon dioxide, are seeping into the atmosphere every year.

  Aside from the environmental consequences of CMM escaping unchecked (see para 4.0), there is also a serious hazard implication with increasing amounts of gas seeping into people's homes and gardens in ex-coalfield communities such as Barnsley, Wakefield, Sheffield, Wigan and Whitehaven.

  In 1995, the village of Arkwright had to be demolished and residents rehoused after CMM was detected in their homes. A Department of the Environment report in 1996 stated that: "Mine gases may, therefore, be locally regarded as a serious problem meriting a specific response."

  Coal Mine Methane (CMM) is a hazardous waste gas which escapes into the atmosphere from abandoned coal mines.

4.  CMM AS A GREENHOUSE GAS

  CMM has a Global Warming Potential 21 times greater than that of carbon dioxide. At the current rate of escape into the atmosphere CMM is making a significant contribution to the UK's greenhouse gas emissions .

  The UK's emissions of gas from abandoned coal mines has a much greater impact on global warming than landfill gas in volumetric terms. If landfill gas qualifies for inclusion in the Renewables Obligation as is proposed, then so should CMM for the following reasons:

    —  Gas from abandoned coal mines has a methane content of around 70 per cent compared to a typical 45 per cent for landfill gas.

    —  The lifespan of a CMM vent is reckoned to exceed 50 years whereas a typical landfill is expected to deplete in about 20 years.

    —  There are many more sources of CMM and thus greater volumes escape to atmosphere.

  CMM is a waste product of former industrial activity. By capturing CMM and converting it into useful energy, the global warming potential is reduced by 87 per cent. An additional benefit is that it displaces the equivalent amount of natural gas, a true fossil fuel.

  The five projects now operated by ACMMO members already benefit the environment by capturing emissions equivalent to the removal of around 160,000 cars from the roads (based on US EPA data).

  In terms of the Renewables Obligation, CMM capture is closer to commercial development than currently available renewable technology except landfill gas. Inclusion could help the Government to meet the shortfall in renewable generation before offshore wind is developed commercially.

  CMM is a major contributor to the UK's greenhouse gas emissions and its capture to generate electricity will significantly reduce the level of these emissions in a cost effective way within a relatively short lead time.

5.  COAL MINE METHANE AS AN ENERGY SOURCE

  CMM is a sustainable source of energy derived from bacterial breakdown of organic materials similar to landfill gas. The UK's reserves of this gas should be sufficient to last for at least 25 years.

  CMM was used at several coal mines by British Coal as fuel for pithead water boilers and small scale power generation (Goode 1994).

  Since 1999, CMM has been captured and used for power generation and industrial fuel on a commercial basis in the UK. The five plants currently operating, supply methane sufficient for around 30MW of distributed generation. The electricity is supplied competitively to local industrial users.

  At Shirebrook, the CMM plant already produces enough power (9MW) to supply 10,000 homes. By the end of this year, a further 10 plants could be in operation bringing the total combined energy output to about 120MW.

  Creating greater demand for CMM, through making it eligible as a renewable source and removing the CCL from it, should enable the fledgling industry to extend its reach to smaller mines which are currently not commercially viable but which in total emit large quantities of greenhouse gas.

  Currently only the larger sites in the region of 6 to 9MW capacity are feasible for commercial development. This is because there are substantial costs involved in developing a site to access the gas and in constructing an extraction plant. The connection of the power generation equipment to the local electricity grid is also a significant cost factor. These costs need to be spread over as large an output as possible. Moreover, with low electricity prices prevailing in the market and the risks attached to this type of new gas supply, the price that the CMM operator can obtain for the gas is very much below market prices for Transco gas.

  A small number of sites with potential for a large output are available and these are likely to be developed by ACMMO's members without inclusion in the RO. However, the majority of potential sites are much smaller and will not be economically viable.

  If CMM is included in the sources for the Renewables Obligation, the realisable price for the electricity, and hence CMM fuel, will increase causing the economic threshold to fall to 2MW or even lower. This would allow a substantial proportion of these greenhouse gas emissions to be captured. The emerging CMM industry would then receive a significant increase in its profile, drawing in the investment needed to speed up the development of projects.

  As ACMMO member companies' research and development is extended to the majority of the 900 abandoned deep coal mines in the UK, it is possible that with the stimulus of Renewables Obligation recognition, as many as 30 currently uneconomic projects a year could be additionally completed. Thus, installed CMM generating capacity could, by 2005, approach 800MW, matching the capacity of live renewable projects at 31 March 2000, excluding large-scale hydro (ETSU Comm.)

  By 2010, with RO status, there could be an additional 300 projects in operation with a capacity of about 1 GW.

  CMM is a clean source of indigenous energy which could, with the added stimulus of RO status, contribute an additional 1 GW to the country's electricity requirements by 2010.

6.  MEETING THE GOVERNMENT'S RENEWABLES TARGET

  "The current policy on renewables is itself part of the Government's proposed programme to tackle climate change. . ." (DTI, October 2000)

  Significant installation of CMM capture technology in the UK would assist the Government, without public funding, to tackle climate change and to have a more realistic chance of achieving its target of 10 per cent of electricity generated from renewables by 2010.

  If CMM is not accorded renewable status then this target may be missed as other large scale technologies such as offshore wind power and biomass have long lead times and are not yet near to commercial. Also this hazardous waste gas will continue to contribute to greenhouse gas emissions from the UK.

  Government policy is to use the renewables obligation as one weapon in the fight to tackle climate change. Coalfield-wide power generation from CMM would provide a powerful advance towards this objective.

7.  POTENTIAL FOR CMM TO CONTRIBUTE TO THE GOVERNMENT'S TARGET

  Landfill gas has been deemed eligible for inclusion as a source for meeting the renewables obligation yet ultimately it is derived from the same process of decay of carbon based substances as CMM. Given that CMM emissions have a much greater volumetric impact on greenhouse gas emissions than landfill gas, it is anomalous that this otherwise unstoppable source does not qualify for renewable status.

  CMM is a waste product and it could therefore be deemed to fall within the scope of "renewable sources" as defined in section 62 of the Utilities Act notwithstanding the fact that it is derived from a fossil fuel, coal.

  Like landfill gas, CMM emissions:

    (a)  are a product of bacterial decay of organic matter;

    (b)  contribute to global warming today; and

    (c)  continue to seep out for many years.

  CMM should therefore be brought within the scope of the Renewables Obligation.

  Promoting power generation from this green energy source has the following additional benefits:

    —  CMM is a clean fuel derived from a hazardous waste gas created by former polluting activity which otherwise will escape into the atmosphere.

    —  CMM substitutes for natural gas, a fossil fuel extracted from sealed reservoirs underground.

    —  CMM projects could make a significant contribution to local renewable power generation.

    —  CMM capture reduces greenhouse gas emissions from the UK.

    —  CMM could help the Government to meet its year on year targets for electricity generation from renewable sources.

    —  Investment in economically deprived coalfield communities.

  Ministers already recognise the potential benefit as, in opening the Shirebrook Green Energy Park, the then Energy Minister, Helen Liddell MP, described the scheme as an innovative and positive use of a natural resource. In announcing the applications for the 9th Round of exploration and extraction licences, she stated that: "There are substantial environmental benefits if vent gas from abandoned coal mines can be fully exploited in the UK" (DTI News Release P/2000/343, 19th May 2000).

  Methane from landfill sites is accorded renewable status and so contributes to the Renewables Obligation, but CMM has not so far been accorded this status.

  CMM provided to dedicated industrial burner tip users is exempt from the CCL but not the electricity generated from its use as clean fuel.

  In recognition of the significant reduction in greenhouse gas emissions that would result, as well as assisting the Government to meet its renewables target, CMM should be accorded green certificate status and be allowed to contribute to electricity suppliers' Renewables Obligation.

8.  DIRECT SALES OF CMM EXEMPT FROM CLIMATE CHANGE LEVY (CCL)

  It is illogical that CMM sold direct to end users as burner tip fuel has been recognised by HM Customs and Excise as exempt from Climate Change Levy. The basis of exemption is by virtue of paragraph 3(2)(b) of Schedule 6 to the Finance Bill, which classifies CMM as a waste within the meaning of Part II of the Environmental Protection Act 1990. This would suggest that the Government does recognise the environmental benefit of CMM and simply needs to confirm its renewables obligation status.

9.  COALFIELD COMMUNITY REGENERATION

  One effect of the development of pithead CMM plants is that they contribute to the economic regeneration of deprived coalfield communities. Projects launched so far have already provided more than £14 million of inward investment to help kick start local economies in the East Midlands and Yorkshire.

  Coalfield community regeneration is a Government priority; CMM helps to drive this policy forward at no cost to the Exchequer.

10.  EXPORT POTENTIAL

  The SMEs which form this new and emerging industry have been participating in DTI sponsored export initiatives, to Poland and China, but lack the resources to take the newly developed technology into world markets. Recognition within the Renewables Obligation would provide a significant financial boost and would support the home market needed for these companies to credibly approach the regulatory authorities and power generators overseas.

  There is a great deal of potential in energy poor countries that are closing mines as natural gas replaces coal as the fuel of choice, and interest in the technology has already been shown from many export markets, with site visits from nationalised and private companies in potential markets including Russia, Romania, India, Australia, South Africa, China and the USA.

  Worldwide interest in ACMMO members' technology has been immense but to develop fully the potential export market, the industry needs to establish fully its base in this country.

11.   BIBLIOGRAPHY

    (a)  UK Experience in the Utilisation of Coal-Mine Methane, A J K Goode in Proceedings of the 1st Silesian International Conference on Coalbed Methane Utilisation, Katowice, Poland, October1994.

    (b)  Intergovernmental Panel on Climate Change, Report 1995.

    (c)  New & Renewable Energy, Prospects for the 21st Century, DTI (2 reports 2000).

January 2001


 
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