Extracts from NATTA's journal
Renew, issue 150 July-Aug 2004

8. Mine Methane shafted

As the Energy Bill entered it last phase in the House of Lords in March, Lord Jenkin of Roding moved Amendment No. 132A proposing the application of the Renewables Obligation to coal mine methane (CMM).  He argued that it was clearly better to capture and use the methane vented from abandoned coal mines to generate electricity, since methane was 23 times more powerful per tonne than carbon dioxide as a greenhouse gas and the electricity produced could offset electricity produced from fossil sources.  On this basis Jenkin argued that  ‘it saves nine times more CO2 equivalent per kilowatt hour than is generated by wind power’. He added that ‘it had the potential to contribute perhaps up to 450 megawatts of generation  capacity by 2010, the equivalent of hundreds of large wind turbines’.

The government had in fact already exempted electricity from mine methane from the Climate Change Levy (see Renew 147), but there was also a case for giving it support under the RO, especially since other methane sources (e.g. landfill gas and sewage gas) enjoyed this.

Jenkins noted that  ‘In this country, investment in capturing and using coal mine methane is virtually on hold. In contrast, the German Government fully support this new carbon mitigation technology and the industry there is now booming. There is investment; it is expanding; the methane is being captured; and  more than 120 megawatts of power is now already in store there, using CMM.’

Jenkin’s negative use of windpower for his comparison was perhaps not wise. As he in fact noted, part of the opposition to CMM was that it was feared that RO support for CMM would inevitably dilute support for wind- which was the governments top priority in the renewables field. The Amendment sought to avoid that competition by calling for an extension of the renewables obligation from 10.4% to 11.4 % to make room for CMM. But this was not backed by the Minister, Lord Whitty, who said that the basic objection to the amendment was that it called for ‘coal mine methane to be treated as a renewable. It is not a renewable but a gas extracted from a fossil fuel. There is an argument about displacing support for other renewables, but there is also a legal and definitional point that we would not be able to obtain [EU] state aid approval, which would include the recycling of the fossil fuel fund, to support a technology under the renewables obligation, because it is not classified as a renewable under the renewables directive.’

As its exemption from the Climate Change levy indicated, the government welcomed the use of CMM but ‘the fact remains that coal mine methane cannot in the normal sense be regarded as renewable. Even when used for power generation it still emits carbon dioxide, so it cannot be said to be a clean fuel.’

On the issue of why Germany was able to use CMM but not the UK, he noted that  ‘the German approach to coal mine methane is not one that we or other member states are seeking  to follow, for the very reason that it effectively treats methane as a renewable, but not a renewable under the terms of the renewables obligation. The feed-in tariff, which is the mechanism used in Germany mine methane, is not state aid as the renewables obligation is regarded as being, specifically with regard to the recycling of the buy-out fund.’

Pressed on this point he commented ‘the Renewables Obligation has a specific aim- to develop long-term, carbon-free generation technologies to the point where they become economically viable in their own right. Offering the obligation more widely risks undermining that longer term objective. To extend it specifically to methane extraction  would be difficult to justify since you would then have to make a  further calculation regarding how much methane leaks naturally and how much is extracted by the process of recovery which would not otherwise have been emitted.’

Pressed again on why Germany was able to do it he responded ‘the German scheme does not include coal mine methane under a renewables obligation.... That is what would fall foul of the state aid rules, from which support for renewables has to have an exemption. It can only be those renewables that are referred to in the renewables directive,’  He added ‘the bit of the renewables obligation which would benefit coal mine methane concerns recycling of the fossil fuel fund. By any definition, that is clearly state aid. The feed-in tariff is not state aid because effectively no money is forgone or provided to the coal mine methane sector. Therefore, it does not fall foul of the state aid obligations’ and concluded ‘even if we could do what the Germans do, that is not what this amendment says. This amendment is calling for its use’  i.e. as a renewable. But he indicated that the DTI was looking at other possibilities.

Baroness Miller of Hendon was clearly unhappy at this outcome: ‘It may very well be that Amendment No. 132A  does not meet the definition of renewable obligation and the other points which the Minister mentioned. It may well be that we cannot do what the Germans seem to do. However, the Germans have gone right ahead with their industry in this way, while we are still thinking about it.’

Lord Jenkin obviously felt similarly: ‘In the mean time, firms that have been working on extracting, trapping and using coal mine methane in this country are now emigrating to Germany.... Here is a way in which the Government could hit directly at their CO2 target- the central thrust of the energy White Paper.  The renewables are a means to that end; they are not an end in themselves. The reduction of CO2 is the end to be achieved if we are to have an impact on climate change. Here is an equivalent source of CO2  which could be trapped and used and which would make a marked  contribution to that struggle, yet nothing has been done.  In a sense, the climate change levy was a sop. It removed a minor disincentive- that is all.’

But he withdrew the amendment.  Source: Hansard March 2