batubara

1. Best Practices in CMM Utilization:
Achieving Near-Zero Methane Emissions from Coal Mine
Mining
Prepared For:
Workshop on Best Practice Guidance for Effective Methane
Drainage and Use in Coal Mines
Prepared By:
Clark Talkington, Vice President
ADVANCED RESOURCES INTERNATIONAL, INC.
Arlington, VA
9-10 March 2017
Ranchi, India

2. Outline
• Review of CMM utilization technologies
• Best practices in CMM project planning and development
• Best practices for CMM project implementation and operation
• Case study
• Conclusions

3. Best Practices in CMM Utilization:
Technology Overview

4. Utilization of drained CMM
• Technologies that use or destroy drained gas are the same as those
that use natural gas
– Power generation from internal combustion engines and turbines
– Boilers to provide heating and hot water (generally replacing coal)
– Natural gas pipeline injection
– Town gas (lower concentration and lower pressure)
– Flaring
– Chemical manufacturing
– Industrial burners (e.g., coal processing, fertilizer manufacturing, soda ash drying)
– Mine shaft heating (direct burner or closed loop oil/water heat recovery)
– CNG/LNG
• The technical challenge for CMM utilization projects is not the
technology; it is the successful integration with mining operations and
optimization of gas availability

5. • There is no hierarchy to
define the “Best” end-use
technology
• A project developer will be
guided by
• Markets
• Mining company
priorities
• Availability of financing
• Public policy priorities
End-Use options for CMM
Combined Heat & Power
Flaring
Regional and Export Gas Sales
Transportation Fuel
CNG Refueling Station
Chemical Feedstock
Methanol Production Plant
Power Generation
Power Plant with 500 kW Gensets
Cooling
Industrial Use

6. Best Practice CMM capture and use employs range of
degassing and utilization technologies to achieve Near-
Zero CH4 emissions mining
Source: U.S. EPA CMM Finance Guide (based on original drawing from the UNECE
Best Practice Guidance on Effective Methane Drainage in Use in Coal Mines

7. Over 200 CMM/VAM projects operational
around the world
The Global Methane Initiative (www.globalmethane.org) has identified more than 200
operational CMM/VAM projects at active and abandoned mines worldwide
Source: Global Methane Initiative database of CMM projects. Accessed October 2016.
http://projects.erg.com/cmm/
Power
generation
709 MW
of generation
capacity
Gas sales
2,716 million m3
per year
Annual
Emission
Reductions
29.4 million
tonnes CO2
equivalent

8. Mine Company
Management
Stakeholders Critical to Achieve Best Practice
Best Practices
Mine Management
Mine Staff
CMM Project
Developer
Mineral Rights
Holder
Mine Safety
Regulatory
Authority
Company
Shareholders
Environmental
Regulatory
Authority

9. Best Practices in CMM Utilization:
Planning, Developing, and Implementing a CMM Project

10. A great 20th Century philosopher once said . . .
Wise men say only fools rush in . . .
Elvis Presley 1961

11. Steps in delivering a CMM Project
1. Project due diligence – Is a project there?
2. Project risk assessment and management plan - What are the risks
and how can risks be mitigated?
3. Project structure – Who is taking the lead and how are the risks
and rewards allocated?
4. Project design – Identifying the supplier and hoping for reasonable
costs.
5. Financing – So how do we pay for it?
6. Operation – Up and running so it should be easy from here.

12. • Coal production history and forecast
• Current and future mining method, mine layout, geologic cross-sections,
understanding of vertical and horizontal stresses
• Credible geologic data including reliable gas content, permeability,
porosity, moisture content and ash content data for the mined seams
and surrounding strata
• Historic CMM and VAM production - if possible monitor current CH4
production for a reasonable period
• Topography, weather, site access, project access, project altitude
• Understand markets for CMM and market access
• Foundation evaluation for CMM plant
• Mine safety & health, occupational safety & health, construction,
environmental, and noise regulations and permitting
Project due diligence

13. Assess project risks
• CMM projects face many risks
– OPEX and CAPEX increase
– Regulations changes
– Market prices collapse
– Gas availability declines
– Mine closes
– Project developer and mine operator have disagreement
• Not all risks are equal – some have greater impact than others
• Know and understand the risks to develop effective mitigation
strategies
• Develop standardized risk assessment tool
63
-
-
6
16
23
29
17
14
17
4
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
InherentRisks
ResidualRisks
TotalActive Risks =
- 2 4 6 8 10 12 14 16 18 20
Reputation
Climate Change
Operation
Installation
Procurement
Design
Legal
Comm.& Fin.
Resources
Country
Strategic
InherentRisks
- 2 4 6 8 10 12 14 16 18 20
ResidualRisks
RISK DASHBOARD Very Low
Low
Medium
High
Extreme
;

14. Common CMM deal structure
Investors
CMM Project
MineCo Developer
Supplier
Developer Model
;
Gas &
Site
Access
$
$
Project is Special Purpose
Vehicle (i.e., “ring-fenced)
MineCo
Shareholders
$
$ + 
$
$
$

15. CMM project design
• Ensure site is accessible for deployment of equipment.
• Determine preferred end-use option(s) based on market analysis.
• Take steps to improve gas availability if necessary.
• If selling power to the electricity grid or CMM to the natural gas grid engage
utility and dispatch authority to ensure interconnect is possible and
power/gas can be dispatched.
• Develop a professional and transparent proposal process and issue
Request for Proposal to multiple equipment suppliers.
• Work closely with the chosen supplier to spec equipment and size the
plant.
• Plant should be designed to employ multiple end-use options to achieve
Near-Zero emissions.
• Obtain all necessary permits and authorizations.
• Ensure access to adequate funds for CAPEX and 1st year OPEX including
staffing

16. Financing CMM Projects
• Unless self-financed, securing 3rd party capital requires valid
revenue source from environmental or energy commodity markets.
– However, financially strong companies can finance off their balance sheets
• Equity
– Equity financing is generally easier to obtain than debt
– Investors expect high returns
• Debt
– Commercial banks reluctant to issue debt to CMM projects; Bilateral and
multilateral financial institutions more open to CMM projects
– For debt some banks have required 100% cash collateral
• Suppliers may be open to vendor financing.
• Project developers are expected to demonstrate significant “skin in
the game” to secure financing

17. Implementing & operating a CMM project
• 2-4 weeks is often budgeted for start-up and commissioning but expect longer –
there are always problems
• Establish a clear chain of command with defined responsibilities for all staff
associated with the plant
• Implement a formal liaison program between the mine and the CMM project
operator
• Invest in and implement a quality monitoring, surveillance, and maintenance
plan for the plant site, and address technical and operational problems quickly
• Implement a monitoring, reporting, and verification program for energy sales
and greenhouse gas emission reductions
• Establish a continuing education and training program for staff covering plant
operation and maintenance and occupational health and safety

18. It should be easy now, right?
“Everyone has a
plan until they get
hit”
Mike Tyson
• Gas availability declines
• Mine idles or closes
• Markets deteriorate
• Regulations change
• Equipment fails
• Staffing turnover
• Financing margins are called
• Mine management priorities
change

19. Best Practices in CMM Utilization:
CMM Project Development Case Study: Duerping Mine,
China

20. Case Study: Duerping Coal Mine, China
• Owned by Xishan Coal & Electricity Co Ltd, a subsidiary of
Shanxi Coking Coal Ltd (Jiaomei Group)
• Xishan Coal Field near Taiyuan City, Shanxi Province
• 1,600m above sea level
• Metallurgical coal mine
• Production capacity = 5 Mtpa
• 700 Mt reserves
• 50 year life
• Relative emissions = 17.7 m3/t (567 ft3/st)
• CH4 emissions increasing as mine goes deeper and
production increases
• Drainage system before project
– in place prior to project development
– Prior CH4 concentrations: 25-30%
– Drainage efficiency = 15%
• No CMM utilization prior to the CMM utilization project
*Acknowledgment to Sindicatum Sustainable Resources and Xishan Coal & Electricity Co.

21. Near Zero Emission Mining Objectives for the
Duerping Mine CMM Project:
4)
4)
4)
4

22. Approach for the Duerping Mine CMM Project:
Steps 1 and 2
Step 1: Determine Gas Availability
• Confirmed gas content data, structure of the coal matrix and permeability of
the coals
• Modeled CH4 liberation rates
Step 2: Improve Gas Quality & Quantity
• Enhanced methane purity
– Improved borehole sealing (2-stage)
– Regulated Suction
• Raised gas capture
– Increase orifice - plate size in the choke
– Improved borehole design and pattern
– Controlled extraction from sealed areas

23. Step 3: CMM project design
• CMM power plant
includes:
– Power generation - 12 MW
– 5000 m3 per hour enclosed
flare
– Closed loop oil-based heat
recovery system
– Passive vent
– Minimal gas processing:
dewater with knock-out pot
and chiller and use 2-stage
dust control
• Employed a conservative
approach for power plant
design
– Sized project at 80% of the
average CH4 flow
– Assume 80-85% availability
for gas engines

24. Step 4: CMM Plant Operation
• After start-up, implemented best
practices to maintain plant
operations
– Training for mine and SSR staff
– Team to worked with the mine staff
to maintain gas availability.
– Telemetry to monitor operations
remotely.
– Regular walk-throughs and
scheduled maintenance including
• Operational monitoring
– Constant observation to ensure
project is operating as planned
– Alarms and notice system alert staff
to problems

25. Step 5: VAM Plant
• Preparation
– Installed continuous emissions monitoring system for 3 years recording
CH4% data every 15 minutes
– Regular air flow data at the fan provided by mine staff
• Contracted with manufacturer in 2011
– One 35 m3/sec RTO
– One 20 m3/sec RCO
– Plant is destruction only
• Project registered as CDM project in November 2011
• Construction in 2012/2013
• Plant is currently idled due to low CDM prices

26. Sindicatum Sustainable Resources
Duerping CMM Power Plant
Duerping Phases 1&2
• 12 MW power using IC engines
• Flaring
• Waste heat recovery
• Passive vent
Courtesy of David Creedy, Ph.D. & Sindicatum Sustainable
Resources, Inc.

27. Duerping power plant & flare performance
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
2/09- 6/09 6/09-
10/09
10/09-
4/10
4/10-
10/10
10/10-
3/11
3/11-
10/11
10/11-
8/12
9/12-
12/12
1/13- 2/14 3/14- 5/15 6/15- 8/16
Cumulative CERs
Annual CERs

28. Best Practices in CMM Utilization:
Conclusions

29. • Every project is unique – can systemize general development approach but will
need to tailor each CMM project to the unique circumstances at that mine.
• Projects have many moving parts. Be prepared to face range of issues –
changes in mine operations, gas quality issues, grid issues, engine
maintenance, etc.
• A dedicated, experienced in-house engineering team ensures that technical
problems can be resolved quickly.
• Economics are improved significantly if flaring is included in project design and
there is a market for carbon offsets or other revenue drivers such as feed-in
tariffs.
• Automated data collection and processing increases accuracy, expedites
verification, and can save money over the long term.
• When modeling project finances, build adequate contingencies into the model.
• Even at a near-zero emission project, there will be some GHG emissions – it is
virtually impossible to eliminate all GHGs
Conclusions

30. Advanced
Resources
International
www.adv-res.com
Office Locations:
Washington, DC
4501 Fairfax Drive, Suite 910
Arlington, VA 22203
Phone: (703) 528-8420
Fax: (703) 528-0439
Houston, TX
11490 Westheimer, Suite 520
Houston, TX 77077
Phone: (281) 558-9200
Fax: (281) 558-9202
Knoxville, TN
603 W. Main Street, Suite 906
Knoxville, TN 37902
Phone: (865) 541-4690
Fax: (865) 541-4688
Thank You Clark Talkington
Vice President
+1 (703) 528-8420 (office)
+1 (703) 966-9755 (cell)
ctalkington@adv-res.com