Methane to Electricity Project to Recover Gas from Coal Mines to Produce Electricity, Reduce Greenhouse Gas Emissions and Support Sustainable Ski

Transcription

1 Methane to Electricity Project to Recover Gas from Coal Mines to Produce Electricity, Reduce Greenhouse Gas Emissions and Support Sustainable Ski Tourism For Global Methane Initiative Coal Technical Sessions March 14, Vancouver, Canada Magdalena AK Muir Associate Professor, Aarhus School of Business and Social Sciences and Nordic Centre of Excellence for Strategic Adaptation Research, Aarhus University & Adjunct Professor, John Hopkins University & Research Associate, Arctic Institute of North America

2 Introduction This presentation examines the methane to electricity project where mine methane is recovered and used to generate electricity. Given the value generated by the CO2 equivalent reduction, this project has implications for sustainable mining operations. It may also be a replicable model for the United States and internationally.

3 Coal Mine Methane Emissions According to the EPA, coal mining is the fourth largest source of US human-related methane emissions Landfills and agriculture account for larger methane emissions, and methane-to-energy projects have been installed in those industries. The Elk River Mine project is an example of what can be done in the mining sector.

4 The Parties Behind the Project Elk Creek Mine is owned by Oxbow Mining, a Koch energy company. The mine entered into the project to capitalize on a waste product. Aspen Ski Company provided funding. Vessels Coal Gas Inc. provided the technology to capture the methane and convert it to electricity. Holy Cross Energy, a local utility, buys the electricity.

5 Business Model for Project All of the stakeholders have entered into a partnership and will receive a share of the revenue of the electricity sold. Since ASC provided $5.4M of the $6M project costs, it receives the biggest share of revenue, an estimated 12 % annual rate of return on investment.

6 Aspen Ski Company Aspen Ski Company invested in a system that captures methane emissions that otherwise vented, and then uses this gas to generate electricity which is fed into the grid. The electricity generated is equivalent to annual electricity requirements of the ski resort, and eliminates three times the carbon that the ski resort creates each year

7 Elk Creek Mine

8 Elk Creek Mine Oxbow Mining LLC s Elk Creek Mine, located in Colorado s North Fork Valley, produces 5 million tons of high-quality bituminous coal annually. The coal from this underground mining operation has high BTU content and low ash, sulfur and mercury. Elk Creek s production makes it one of the top five producing underground coal mines in the US Elk Creek is expected to produce more than 60 million tons of coal from privately and federally leases over the next 10 years.

9 Holy Cross Energy Holy Cross Energy, formed in 1939, is a not-for-profit, member-owned electric cooperative utility providing electricity, products and services to more than 55,000 consumers. By purchasing the power from the mine, Holy Cross reduces the carbon intensity of their product by 10 %, while increasing their annual wholesale power cost by 1 %.

10 Elk Creek Methane to Electricity Project The project has 3 megawatts of baseload electricity. Three 1- megawatt piston engines sited at the coal mine capture methane at the Elk Creek Mine site. 25 millionkilowatt hours of electricity are generated annually. This is the largest coal mine methane to electricity project in the United States.

11 Elk Creek Mine Methane to Electricity Project Generator at the Elk Creek coal-mine methane to electricity plant

12 Elk Creek Mine Methane to Electricity Project

13 Elk Creek CO2 Equivalent Reduction This project generates enough electricity from the captured methane to eliminate 96,465 tons of CO2 equivalent every year, or removing 13,151 cars. To get an equal amount of carbon reduction from a solar energy project, Aspen Ski Company would need to invest $400 million.

14 Related Regulatory Developments Coal Mine Methane Bill proposed in 2012 in the Colorado state legislature to make coal-mine methane an eligible resource under the state s Renewable Portfolio Standard. The Bill was opposed by environmental organizations and the state s wind and solar industries, and ultimately failed.

15 Verified Carbon Standard Vessels Coal Gas, who provided technology for the Elk Creek Mine methane to electricity project, developed methodology for verifying Carbon Emissions Reductions from abandoned coal mines using the Kyoto Protocol s Clean Development Mechanism. This VMR000 methodology is a 2010 revision of CDM ACM0008, and is a Verified Carbon Standard.