The aim of the paper is to identify whether and to what extent an exploitation of abandoned mine methane (AMM) is economically viable in the Upper Silesian Coal Basin (USCB).
Nowadays coal mining in many countries is in a crisis because of imposing decarbonization policy on one hand, and displacement of energy based on hard coal by energy based on renewables on the other. It turns out that methane accumulates in significant amounts in abandoned underground coal mines’ pathways, galleries and gobs. Hence, both electricity and heat production (combined heat and power – CHP) from AMM could improve the economic situation of post-mining areas and provide clean energy. Moreover, utilization of AMM exploited by boreholes drilled from surface could increase safety in neighboring working hard coal mines. However, existence of these advantages is determined by economic calculation.
Firstly, I identified the factors influencing the level of investment costs and the size of revenues. In both cases I left the popular deterministic assessment and I decided to use stochastic approach, which allows a better reflection of reality by taking into account the variability and unpredictability of the future price of electricity, heat, drilling and other factors. Calculation is based on real data acquired from the local electric power industry. The analysis was possible by using the Monte Carlo method and @Risk program from the Palisade’s package – Decision Tools. Eventually, I prepared sensitivity and scenario analysis to identify which factors have the greatest impact on the profitability of such projects.
Abandoned mine methane may soon become a valuable source of income for the mining areas struggling with many socio-economic problems and become a bridge between coal-based energy system and clean energy resources.