Competitiveness and Cost Sensitivity Study of Underground Coal Gasification Combined Cycle Using Lignite

To push the underground coal gasification (UCG) technology toward commercialization, its competiveness and cost components still need to be investigated. This paper compares the power generation cost of underground coal gasification combined cycle (UCGCC) with pulverized coal (PC) plants, integrated gasification combined cycle (IGCC), and natural gas combined cycle (NGCC). Cost sensitivity of the UCGCC as a function of coal seam depth and thickness was also examined. The results indicate that UCGCC is very competitive compared to PC and IGCC. Within the same assumed fuel price range, the power generation cost for UCGCC was $45–48/MWh, whereas it was $45–60/MWh for PC and over $100/MWh for IGCC. The generation cost of UCGCC was as low as NGCC at low natural gas prices, but UCGCC was able to provide a lower CO2 capture cost. Dependent upon the assumed fuel prices, the capture cost for the UCGCC was $27–28/tonne of CO2, whereas it was $47–58/tonne of CO2 for NGCC. It is also found that the cost of UCGCC decreased with the increase in coal seam thickness and increased with coal seam depth, but the effect of depth was not as pronounced as that of the seam thickness. An effective way to enhance the competitiveness of UCGCC is to use thicker coal seams.