Economic modelling for coal bed methane production and electricity generation from deep virgin coal seams

An investigation of the economic potential for recovering methane from virgin coal seams for electricity production at a study area in South Wales, UK, is presented. Utilizing the coal bed methane gas to fuel a CCGT (combined cycle gas turbine) will offer a low carbon option compared to fossil fuel fired power generation for the study area. Cost effectiveness is analysed using both technical and economic data allowing for integration connecting the various sub-processes to the surface processes up to the production of electricity. The model considers both reservoir conditions and engineering factors to calculate the EUR (enhanced ultimate recovery), the CAPEX (capital expenditure) and the OPEX (operational expenditure) of the coupled CBM-CCGT process. The projected UK Navigant gas prices and the DECC electricity prices are then used to estimate the LCOE (levelised costs of electricity) and obtain the financial performance of the coupled CBM-CCGT process. Calculation results showed that the probable cost of electricity (LCOE) amounts to 37 £/MWh and the return on investment could be in the excess of 77%. For the selected study area, the coupled CBM-CCGT process could potentially be an economic option for power generation.