Carbon Energy has signed a contract with Queensland Government-owned Ergon Energy, in a bid to kick-start its commercialisation plans.
The contract - worth $2 million per year - is for electricity produced at Carbon Energy’s 5MW syngas-powered electricity production facility, which is currently being constructed at Bloodwood Creek in the Surat Basin.
It is expected to generate enough power to supply approximately 4,000 homes per annum, with the first electricity expected to flow into the grid by the end of 2009.
The contract follows the success of Carbon Energy’s world-first trial of the underground coal gasification (UCG) technology developed in conjunction with Australia’s Commonwealth Scientific and Industrial Research Organisation.
Managing Director Andrew Dash says this is an exciting time for the Brisbane-based company.
“The establishment of the 5MW station is a major step towards full commercial production.
“However, it’s really only the first step. We intend to move forward quickly with plans for an additional 20MW power station at the Bloodwood Creek location in 2010,” he says.
“We see the 5MW as a proof of concept for power generation, and the experience gained will assist with the planned 20MW expansion.”
Dash explains that Carbon Energy is currently evaluating a number of alternatives for carbon capture and storage.
“Clean or low emission coal technologies typically depend on digging coal out of the ground, transporting it, then gasifying it above-ground prior to Carbon Capture, so our major advantage is that as the UCG process already converts the coal into a gas, it eliminates the need for the first three steps,” he says.
“The result is that the UCG process can reduce clean coal production costs by between approximately 30-50 percent and deliver a more environmentally friendly method of power generation than the traditional coal fired plants currently in operation.”
Completion of the 5 and 20MW power facilities will bring Carbon Energy significantly closer to its vision for regional South East Queensland.
It even has the potential to be among the first Australian companies to deliver a “low emissions” coal project, according to Dash.
“From a Queensland point of view, our power generation project supports the State Government’s aim of additional generation capacity being provided by the private sector. Additionally we will be creating jobs which will help the local economy,” he says.
Experience gained from the delivery of the planned Queensland stations will allow Carbon Energy to pursue key international markets, such as the United States.