CMM Offset Generating Project Case Studies

Transcription

1 CMM Offset Generating Project Case Studies Presentation to the CAR Workshop November 9, 2010 Morgantown, WV Santosh Lakhan & Jeff Liebert Verdeo Group 2010 CAR Workshop Morgantown, WV Unlocking Carbon Value. 1

2 Verdeo Update: Projects Under Development The leading portfolio of methane projects in North America with environmental attributes Longwall Coal Mine Gob gas destruction feasibility assessment Longwall Trona Mine Gob gas destruction and utilization Oil/Gas Production Fugitive methane capture Longwall Trona Mine Gob gas destruction and utilization Coal Mining Company CMM/CBM to power generation Abandoned Longwall Coal Mine Carbon monetization of gob gas pipeline injection Longwall Coal Mine VAM oxidation Gas Production Leak Detection and Repair Longwall Coal Mine Gob gas and VAM feasibility assessment Longwall Coal Mine Gob gas destruction Verdeo Offices Mexican Landfills LFG gathering and destruction projects Oil/Gas Production Fugitive methane capture Oil/Gas Production Fugitive methane capture Coal Mining Company Portfolio feasibility assessment, gob gas field test 2010 CAR Workshop Morgantown, WV Unlocking Carbon Value. 2

3 On coal mines Verdeo targets methane, both post and premining Sources of Mine Methane Emissions Gob Vent Boreholes Ventilation & Bleeder Fans Pre- mine Degas Pre- mine Degas Wells Gob Gas VAM Mined Out Area Future longwalls Longwall being mined 2010 CAR Workshop Morgantown, WV Unlocking Carbon Value. 3

4 Varying methane concentrations result in only a select set of project types being applicable to each source Source of methane Ventilation Air Gob Vent Boreholes Pre- mining Degas % CH 4 (stable in flow & concentration) 40 80% CH 4 (fluctuates depending on mining) 70 90% CH 4 (relatively stable in flow and concentration) Applicable Project Types RTO/RCO Oxidation Higher methane concentrations make this an inefficient and costly mechanism for abatement Higher methane concentrations make this an inefficient and costly mechanism for abatement Incineration Methane concentrations are too low to be ignited and combusted in an incinerator While technically feasible waste of potentially high quality gas stream Power Generation using Lean Gas Engines Methane concentrations are too low to power lean gas engines Pipeline Injection Methane concentrations are too low for pipeline quality * * Longevity of gob wells and infrastructure costs (including piping to well) could make this economically unviable 2010 CAR Workshop Morgantown, WV Unlocking Carbon Value. 4

5 Verdeo has worked or is currently developing projects in each of these project types Ventilation Air Methane Oxidation Incineration Lean Gas Engine Power Generation Pipeline Injection Fan Oxidizers Extraction Pump Flare Containerized Lean Gas Engine Gas Conditioning Pipeline Vent Shaft Gob or Goaf Gob well Pre- mine Degas well Pre- mine Degas well Mine Caved in sections Plant Characteristics Regenerative Thermal Oxidizer (RTO) plants are relatively large comprising multiple modular RTO units Plant must be located more than 100 feet from vent or bleeder shaft evasé Plant can be relocated if needed RTO can be designed for an operational range as low as 0.2% CH 4 Incinerator can be integrated with existing extraction pumps Both extraction pumps & incinerators are portable & can follow mining activity & can also be used on a peaking basis Incinerators are designed to cope with fluctuations in methane concentrations Generating units are containerized increasing portability Modularity allows for plant to be scaled up and down depending on gas availability Engines can cope with fluctuating gas compositions Plants are large to capture economies of scale and are typically located closer to gas pipelines Requires significant gas gathering and collection infrastructure 2010 CAR Workshop Morgantown, WV Unlocking Carbon Value. 5

6 Varying methane concentrations result in only a select set of project types being applicable to each source Source of methane Ventilation Air Gob Vent Boreholes Pre- mining Degas % CH 4 (stable in flow & concentration) 40 80% CH 4 (fluctuates depending on mining) 70 90% CH 4 (relatively stable in flow and concentration) Applicable Project Types RTO Oxidation Higher methane concentrations make this an inefficient and costly mechanism for abatement Higher methane concentrations make this an inefficient and costly mechanism for abatement Incineration Power Generation using Lean Gas Engines Pipeline Injection * Longevity of gob wells and infrastructure costs (including piping to well) could make this economically unviable 2010 CAR Workshop Morgantown, WV Unlocking Carbon Value. 6

7 When fully operational the McElroy VAM project will generate approximately 380,000 offsets annually 2010 CAR Workshop Morgantown, WV Unlocking Carbon Value. 7

8 McElroy project roles and responsibilities Design and Development Construction and Commissioning Ongoing Operations Financing System integration Coal mining and CMM experience Project finance and management Air permitting Engineering and design capabilities RTO experience Project management System integration Carbon services Investment management CMM and VAM expertise Technology solution fabrication Plant construction Testing and commissioning Offset generation Offset monetization Investment management Project and Performance management Plant operation Maintenance Ongoing technical services Mining experience Engineering support Permitting and environmental support Site location VAM resource General safety and engineering support VAM resource General safety and engineering support 2010 CAR Workshop Morgantown, WV Unlocking Carbon Value. 8

9 Varying methane concentrations result in only a select set of project types being applicable to each source Source of methane Ventilation Air Gob Vent Boreholes Pre- mining Degas % CH 4 (stable in flow & concentration) 40 80% CH 4 (fluctuates depending on mining) 70 90% CH 4 (relatively stable in flow and concentration) Applicable Project Types RTO Oxidation Incineration Power Generation using Lean Gas Engines Methane concentrations are too low to power lean gas engines Pipeline Injection * Longevity of gob wells and infrastructure costs (including piping to well) could make this economically unviable 2010 CAR Workshop Morgantown, WV Unlocking Carbon Value. 9

10 The development of the CMM power project is being undertaken in three distinct sequential phases Feasibility Assessment Plant Design, Permitting and Interconnect Study Construction and Commissioning Understand mine power requirements and profile Assess gas availability, quality and volumes Determine potential technology solutions and applicability Estimate plant size and design based on gas availability, electricity demand and technology options Analyze the financial case for the power plant and determine success criteria Develop project structure and financing options Finalize plant design and operational characteristics Determine plant emissions profile and initiate permitting applications Undertake grid interconnect study to understand implications of introducing power to the grid Determine stand- by power requirements Negotiate off- take or tolling agreements Construct and commission plant according to finalized design specifications Ongoing operation and maintenance of the plant to meet availability and efficiency targets Expansion of the plant depending on the mine electricity needs and modularity of the technology solution 2010 CAR Workshop Morgantown, WV Unlocking Carbon Value. 10

11 Understanding the sources and sinks of energy was critical in conceptualizing the power plant Gas Supply Potential Generating Plant Capabilities Mine Power Demand Profile Analysis of mine methane in- situ reserves Determine drainage potential and CMM & CBM delineations based on mining plan and projections Build a gas supply profile with projections on volume and composition of supply Assess drilling and infrastructure requirements for gas supply e.g. compressions, gas treatment, piping Pre- technology selection Define plant generating characteristics based on gas supply and power demand analysis Post- technology selection Determine plant production characterizes and determine the potential for excess power sales to the grid or the need for supplemental grid power and backup/contingency provision Assess the need and implications of grid interconnect Identify power sources and sinks at mine facilities Build a mine power demand profile based on historic use and projections Assess possibility for shaping demand profile to better suit power generating plant capabilities or to avoid peak costs Daily power demand profile ILLUSTRATIVE Gas Composition Analysis ILLUSTRATIVE ILLUSTRATIVE Gas Production Volume Analysis ILLUSTRATIVE Equipment and Process Load Curves ILLUSTRATIVE 2010 CAR Workshop Morgantown, WV Unlocking Carbon Value. 11

12 Plant sizing was based on a detailed analysis of gas supply and mine electricity demand Gas Analysis Electricity Demand Analysis Plant Size Assessment 2010 CAR Workshop Morgantown, WV Unlocking Carbon Value. 12

13 The project is poised to enter the design and permitting stage of development Plant Description and Details: Project description: Generation: 20 MWe Location: Pennsylvania Fuel Source: Fugitive Coal Mine Methane Key Metrics and Considerations: Project Economics & Metrics: Number of lean gas engines: 5 Electrical efficiency: 39.1% Plant availability: 93% Projected grid prices: $65/MWh Key Stakeholders & Parties: Mining Company : Leading Appalachian & Powder River Basin, publicly traded, coal mining company Engine suppliers: GE Jenbacher (5 X 4MW) Key issues and risks: Plant availability and power output are dependant on the quality and quantity of methane supply Project economic viability depends heavily on strong power demand & pricing Depending on the size of the plant the GHG emissions from the plant could exceed 25,000 tco 2 e which could cause permitting issues 2010 CAR Workshop Morgantown, WV Unlocking Carbon Value. 13

14 Varying methane concentrations result in only a select set of project types being applicable to each source Source of methane Ventilation Air Gob Vent Boreholes Pre- mining Degas % CH 4 (stable in flow & concentration) 40 80% CH 4 (fluctuates depending on mining) 70 90% CH 4 (relatively stable in flow and concentration) Applicable Project Types RTO Oxidation Incineration Power Generation using Lean Gas Engines Pipeline Injection Methane concentrations are too low for pipeline quality * * Longevity of gob wells and infrastructure costs (including piping to well) could make this economically unviable 2010 CAR Workshop Morgantown, WV Unlocking Carbon Value. 14

15 Alpha s Coal Gas Recovery Project was recently validated as a GHG offset project Testing Program Commercial Expansion Equitable Pipeline Coal Gas Recovery Processing Plant Commercial Expansion 2010 CAR Workshop Morgantown, WV Unlocking Carbon Value. 15

16 Alpha s drilling program expanded their R&D test program achieving commercial scale DD Wells VV Wells Gob Wells Testing Phase 8 9 Commercial Expansion /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ CAR Workshop Morgantown, WV Unlocking Carbon Value. 16

17 Project will generate million offsets over the life of the project Total offsets produced: MMtCO 2 e CAR Workshop Morgantown, WV Unlocking Carbon Value. 17

18 Varying methane concentrations result in only a select set of project types being applicable to each source Source of methane Ventilation Air Gob Vent Boreholes Pre- mining Degas % CH 4 (stable in flow & concentration) 40 80% CH 4 (fluctuates depending on mining) 70 90% CH 4 (relatively stable in flow and concentration) Applicable Project Types RTO Oxidation Incineration Methane concentrations are too low to be ignited and combusted in an incinerator While technically feasible waste of potentially high quality gas stream Power Generation using Lean Gas Engines Pipeline Injection * Longevity of gob wells and infrastructure costs (including piping to well) could make this economically unviable 2010 CAR Workshop Morgantown, WV Unlocking Carbon Value. 18

19 First operating gob gas incineration installation on an active underground mine in the US 2010 CAR Workshop Morgantown, WV Unlocking Carbon Value. 19

20 Introducing the MDU - World s first off-grid, mobile integrated gob gas incineration and measurement system MDU (Methane Destruction Unit) 2010 CAR Workshop Morgantown, WV Unlocking Carbon Value. 20

21 Configured for rapid deployment and easy mobility Transportation Configuration Operational Configuration 2010 CAR Workshop Morgantown, WV Unlocking Carbon Value. 21

22 For fully financed, turn-key methane abatement or beneficial use projects please contact: 1600 K Street, NW, Suite 700, Washington, DC / Jeff Liebert Managing Director Phone: jliebert@verdeogroup.com Santosh Lakhan Director Phone: slakhan@verdeogroup.com Ben Apple Director Phone: bapple@verdeogroup.com Denver Washington, DC Austin 2010 CAR Workshop Morgantown, WV Unlocking Carbon Value. 22