Coal  

Eskom invests  optimism and money in UCG clean coal technology

(Published in Mining magazine June 2014 )

By Stef Terblanche

The prospect of killing several birds with one stone is generating much excitement and optimism over at Megawatt Park these days. The “stone” in question being a clean coal technology known as underground coal gasification, or UCG.

The “birds”  are the efficient extraction of South Africa’s vast previously unminable, deep-lying or low-quality coal resources, substantially reducing costs, and scoring environmental points by applying clean coal technology. If applied it will more than double South Africa’s coal resources and extend the life of coal as an energy source far into the future.

For a country heavily dependent on coal-fired power generation with associated very high levels of harmful CO2 emissions, any technology that allows for cleaner power production with additional benefits will always be good news. For state power utility Eskom gassifying the vast coal reserves underground and turning it into electricity may offer an opportunity to address its carbon emissions problem, mitigating its dependence on coal and its supply shortfall.

Some uncertainties

For the past decade Eskom has been developing its UCG technology at a cost of R1bn. In 2007 it commissioned a pilot plant that successfully proved the technology concept qualitatively at its Majuba power station in Mpumalanga, the company says. Eskom is now entering the final five years of the research and trial phase at a further R1bn cost and hopes thereafter to start rolling it out in commercial operation. But even if successful, it will take up to eight years to get the first commercial plant operational.

As with any new venture though there are pros, cons, uncertainties and some remaining hurdles.

Not that UCG is all that new. The process was conceived in the late 1800s and the technology has been researched for the past 70 years in the former Soviet Union/Russia, where it has also been in commercial operation for more than 50 years. However, this technology has not yet reached commercially mature status anywhere else.

While there are distinct potential benefits involved for South Africa and Eskom, some issues remain less clear for now, says Dr Mark Van der Riet, Corporate Specialist for Research, Test and Development at Eskom’s Sustainability Group who has been closely involved with the project.

“Eskom regards UCG as still requiring some crucial quantitative scientific research before being commercially viable. There are unanswered questions about groundwater effects, the leachability of the ash left underground, effects of subsidence and so on at the commercial scale.”

“The benefits are that it will enable South Africa to access the unminable three-quarters of our coal resources that conventional coal mining ignored,” says Dr Van der Riet.

Coal reserves

The International Energy Agency (IEA) distinguishes between proved reserves of coal that can be extracted economically with current technology, and the total amount of coal in the ground. Most of the world's coal reserves are deep underground and not safe or economical to mine, but with UCG these reserves could increase by up to 70%.

According to the Department of Energy South Africa has 30bn tonnes of coal or another 50 years of proved coal supply left. However, Dr Van der Riet estimates conservatively that in addition South Africa has 45bn tonnes of unminable coal reserves that are suitable for UCG.

Eskom anticipates a shortage of as much as 40 million metric tons of coal a year after 2018, while it will need some 60 million metric tons of coal by 2020 to overcome fuel shortages. While South Africa is diverting its energy mix to include more renewable and nuclear energy, the country will remain dependent on coal for years to come.

Globally however the pressure is on power producers to move away from coal. In North America, Japan, China and the EU new emission regulations could force many coal-fired power plants out of business in the next decade as maintaining compliant coal-fired power stations could become very expensive, Dr Lesley Sloss of the IEA’s Clean Coal Centre in the UK told a UCG conference of the Fossil Fuel Foundation (FFF) in Johannesburg in August. New plants will have to meet even more stringent requirements. And last year the World Bank introduced a new directive to limit financing of coal-fired plants.

Adapting to high efficiency low emission technology would allow coal to remain in the energy mix in a carbon-restrained future, she said.  This is where UCG and the vast potential supply of previously unminable coal in South Africa come into the picture.

How it works

The process appears deceptively simple but is a complex one. It starts with the drilling of a matrix of boreholes into the coal seam.  Sealed wells are created with the use of continuous steel casings that are cemented in place and a link is created between them through the coal seam.

The coal is ignited by air being pumped into the link. As the coal burns the process produces a synthetic gas comprising predominantly carbon monoxide, hydrogen, methane, hydrocarbons (gas, liquid and solid), carbon dioxide and moisture. This primary process is termed gasification.

There is also a secondary combustion process required to generate heat that will drive the gasification process which is sometimes assisted by the injection of steam.

The Majuba project

As with almost all of Eskom’s coal-fired power stations its Majuba plant was built next to coalfields that could supply it. However, upon completion it was discovered that the underground coal seams were geologically faulted, rendering the mining of most of the coal uneconomic.

This realisation coincided with the findings from Eskom’s concept studies on UCG, leading to the idea of using Majuba to test and develop UCG, leading to the establishment of a pilot plant that started operating in January 2007 and ran for 4 ½ years. Eskom believes the pilot plant has successfully proven that the technology works.

The Majuba pilot plant consumed about 100 tons of coal per day at a production rate of 15,000 normal cubic metres per hour.

According to Dr Van der Riet Eskom has already cold-commissioned a gas pipeline and burning system for a 15,000Nm3/hr co-firing demonstration for which several regulatory approvals were required.  The last outstanding one is the water use licence.

Dr Van der Riet says UCG has the potential to supply base load or mid-merit generating capacity in the 2020 timeframe from the Majuba coalfield in Mpumalanga.

“We have a 5-year research programme to still complete, and at the end of this anticipate that the technology will be ready for commercial development.”

Available technology

Fortunately for Eskom advanced UCG technology has already been developed in countries such as Russia and China, both BRICS partners of South Africa, allowing South Africa to fast-track its own programme. China currently runs the world’s biggest UCG programme involving some 300 researchers. In the last two years 100,000 tonnes of coal has been gasified there.

According to Dr Van der Riet Eskom chose to license its UCG technology from Ergo Exergy Technologies Inc. in Canada, which incorporates the expertise gained in the former Soviet Union’s  UCG operations.

“As a result we can leapfrog the technology path as quickly as possible and learn from their experience,” he says.

UCG is being developed in Alaska, Canada, China, Hungary, India, Italy, New Zealand, the UK and Pakistan, among others, while pilot UCG plants have also been operated in Australia, New Zealand, the EU and the USA. But, says Dr Van der Riet, none of these are on a commercial scale yet.

According to Van der Riet there are no other operating UCG sites at present in South Africa, but Sasol has shown interest in collaborating with Eskom on its UCG research sites; Africary has announced its intention to  build a commercial UCG plant in Theunissen in the Free State; and Exxaro, with technology partners Linc Energy, are in the concept evaluation phase.  There are also numerous other UCG developers still engaged in the pre-concept phase, he says.

Risks and challenges

Eskom says that as with adaptation of any technology UCG also carries risk and, in anticipation of potential risks, it has developed mitigating strategies. Incremental learning is ensured and risk exposure reduced by adapting the technology in a phased manner with clear milestones. But, says Eskom, the apparent conceptual simplicity of UCG obscures its technological complexity

Regarding the safe application of UCG, Eskom is pursuing further scientific research on operating risks such as the effect on groundwater.  But critics and opponents of UCG warn of nightmare scenarios involving polluted water, sinkholes and runaway underground fires that could threaten nearby human populations.

“Setting fire to coal underground could answer our energy prayers, or start an environmental disaster on a bigger scale than ever before,” declared the New Scientist in March this year.

Opinions on the danger of underground fires vary. Eskom says fuel, heat and air is required for the underground coal to burn. But with the coal seam being naturally under water, the risk of fire is reduced as there is no oxygen present unless it is deliberately compressed - to overcome the enormous pressures underground - and injected.

However, in Pennsylvania in the US the town of Centralia is today a ghost town as a result of an underground coal fire that has been burning beneath it since 1962, while similar underground fires occur in South Africa’s Witbank region due to close proximity to the surface and uncontrolled ingress of air.  Neither incidents are however related to UCG, but have taught UCG valuable lessons on where not to use UCG, says Dr Van der Riet.

Mr Dick Kruger, Deputy Head of Techno Economics at the Chamber of Mines explains that in former years coal miners extracted 40% of the coal in an area and left behind 60% as pillars. “When oxygen gets to these pillars, they start burning.” Kruger says the empty cavities left below ground could potentially also cause sinkholes.

Kruger says he is more concerned about what happens to the groundwater. Eskom says subsidence and groundwater quality is continuously monitored on its UCG site. However, in Queensland, Australia one such project was shut down because of issues related to groundwater pollution.

Eskom furthermore says to limit environmental risks the UCG wells are cased with steel, cemented continuously down to the coal seam, and geophysical logging is performed to ensure well casing integrity.  But the Extreme Energy Action Network said in an article that Majuba has experienced at least two casing failures (or ruptured wells) which required “rehabilitation strategies”.

“Our pilot plant did have a casing failure, and did contaminate the surrounding soil.  We contained the process successfully, remediated the surroundings, and now monitor the aquifers for any sign of contamination.  In these events we learnt that our early warning monitoring system works, as did our remediation strategies,” says Dr Van der Riet.

Benefits

Apart from the benefits in respect of utilising previously unminable coal reserves, utilising clean coal technology and reducing costs, UCG is also a viable alternative to natural gas and oil as fuels due to escalating prices and diminishing availability. Costs are cut as it reduces steps in electricity production.

Eskom estimates that a nominal 2,000MW UCG mine and Integrated Gasification Combined Cycle power station would typically create more than 1000 permanent jobs, excluding contractors.

Industry experts are hoping UCG will produce power at a cost much less than imported liquefied natural gas (LNG), but speculate it will possibly come at double the current cost of shale gas production in the US. The speculation can only be confirmed with actual operational numbers, but no-one is publishing these, says Dr Van der Riet.

Regulating UCG

Regulating UCG is another global challenge, especially when it comes to aligning policy with the pace at which the technology is being developed. Several countries like Australia and Canada are busy drafting policy and regulations. In South Africa regulations governing prospecting and mining rights for UCG have been included in the Mineral and Petroleum Resources Development Act (MPRDA) Amendment Bill

In the final analysis, says Dr Van der Riet, Eskom has proven “UCG works in a coalfield that the conventional miners had declared as unminable”. 

“We have done extensive engineering design.  We have engaged a multi-disciplinary team of experts from around the world to interpret and understand the technology.  We remain convinced that the next 5 years of research will answer the remaining questions we and our colleagues have, and that UCG will indeed offer South Africa a unique and compelling energy future.”

“However,” he says, “UCG will get no free ride – it must compete with, and beat, all other electricity generating technologies for it to be relevant in the country in 5 years’ time.”