By XIAO WAN (China Daily)
Updated: 2007-08-27 07:02

Coal mine and coalbed methane, viewed for years as a hazard requiring venting or extraction from underground mines to improve safety, will become a new energy source for power generation in North China's Shanxi Province, where the world's largest coal methane power plant is under construction to harness the rich resource.

Located in Jincheng City in southern Shanxi, the Sihe coal methane power plant will have an installed generating capacity of 120 megawatts by using 60 methane gas-powered generators made by Caterpillar, the United States heavy equipment and engine manufacturer.

Shanxi Jincheng Anthracite Coal Mining Group Co Ltd is the project developer, while Caterpillar will work with its dealer WesTrac China Ltd on product commissioning and support.

Upon completion of the plant at the end of this year, residents in Shanxi Province will benefit from improved environmental and economic conditions as well as enhanced mine safety.

According to a statement from Caterpillar, the Sihe project is expected to reduce greenhouse gas emissions by 4.5 million tons over a 20-year period and serve as a model for future Clean Development Mechanism projects in China using coalbed methane.

Methane is a gas 21 times more potent than carbon dioxide as a greenhouse gas. It is also highly explosive and must be extracted or vented during coal mining operations to ensure safe working conditions.

In the past methane has been vented into the atmosphere, contributing to greenhouse gas emissions. Capturing the gas and converting it into electricity will significantly reduce greenhouse gas emissions while also improving the capacity of the local power grid, Kate Wang, a Beijing-based Caterpillar spokesperson tells China Business Weekly.

The Sihe power plant is an excellent example of how to increase energy use in an environmentally responsible way, says James Connaughton, a top White House advisor on the environment.

"Caterpillar is a long-term investor in China, and we are excited to see that China has positioned methane gas capture and utilization as a priority," says Rich Lavin, Chairman of Caterpillar (China) Investment Co Ltd.

Following the Sihe project, Caterpillar will provide an additional 31 methane gas-powered generator sets with a combined capacity of 54 megawatts for another two plants in Jincheng City.

Methane power

According to a study by the US Environmental Protection Agency (EPA), there is a global power capacity of 2,979 megawatts that could be generated by burning coal mine methane and turning it into electricity. China alone has the potential for 1,365 megawatts, accounting nearly half the world.

Coal methane has been used to generate power for more than a decade in Australia, Germany, Japan, the United Kingdom and the US. There has also been rapid development in recent years in a number of other countries, including China, Poland and Ukraine, according to World Coal Institute.

According to the institute's 2005 data, there are about 50 projects operating worldwide at coal mines that have generating capacities ranging from 150 kilowatts to 94 megawatts. Together they have the capacity to generate more than 300 megawatts of electricity.

The largest is a power plant in Australia that uses coal mine methane supplied by the Appin, Tower and West Cliff collieries to generate electricity for the local utility grid. The project has 94 Caterpillar engines, each with a 1-megawatt capacity.

The potential for equipment sales used to convert methane to power is $8.7 billion globally, and China alone represents potential equipment sales of $3.8 billion, says the EPA study.

Caterpillar moves

To Caterpillar, China represents "a great opportunity for further development of additional coal methane projects", says Kate Wang.

The nation's 11th Five-Year Plan (2006 to 2010) emphasizes that building a recyclable economy is important to build a resource-efficient and environment-friendly society. The country has set a goal of reducing emissions of major pollutants by 10 percent during the five-year period.

Last year the National Development and Reform Commission, China's top economic planning body, drafted a five-year plan for the development of coalbed methane. Under the blueprint, China is to increase its annual coalbed methane output to 10 billion cubic meters in 2010.

As part of the second Sino-US Strategic Economic Dialogue, the two countries agreed to develop up to 15 large-scale coal mine methane capture and utilization projects in China in the next five years.

"The use of Caterpillar engines is a great example of how Caterpillar products and technology can be used to help China reach its environmental goals," says Wang.

"As the leader in the power generation industry, Caterpillar and its dealers have worked to help customers all over the world develop integrated power solutions. This coal methane project is unique because it is very large, but we are confident that this project will be successful," she says.

(China Daily 08/27/2007 page3)