Evaluating the costs and achievable benefits of extending technologies for uneconomical coal resources in South Africa: The case of underground coal gasification

 

 

M Zieleniewski^I; A C Brent^II

^IGraduate School of Technology Management, University of Pretoria
^IIGraduate School of Technology Management, University of Pretoria; and Sustainable Energy Futures, Natural Resources and the Environment, CSIR

 

 

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ABSTRACT

As the South African economy relies heavily on its coal resources, these resources should be utilised and managed in the best possible manner. Underground coal gasification (UCG) is one of the leading technologies used where conventional mining techniques are uneconomical. UCG delivers gas suitable for synthesis, production of fuels and electricity, or for home usage. The method is perceived as being environmentally friendly and safer than traditional mining. The study summarised in this paper was conducted so as to create a simple model that would allow for the evaluation of UCG process-related costs versus expected benefits in a wider context and under different circumstances. The parameters of the model are: feasibility definition, i.e. maximum possible gas calorific value, based on geological surveys and gasification agents for a predefined need; direct process-related costs that are derived from the expected capital and operational expenditures and compared to the value and volume of the gas produced; and assessment of externality costs, i.e. the indirect economic value of environmental, safety and health benefits. The externalities concept should encourage governmental agencies to consider further investment in UCG technology as a vehicle for delivering, potentially, high savings in terms of the reduction in the costs of environmental damage resulting from gaseous emissions into the atmosphere, specifically expenditure on national health.

Keywords: underground coal gasification (UCG), externalities, cost benefit model

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Received 13 September 2007
Revised 24 October 2008