The concerns over global warming has forced governments and corporations to cut back on emission gases, with some interventions threatening the future of the coal industry. However, a new report released this weak reveals a potential lease for the coal market.
Fortune Business Insights, an Indian based data consulting firm, says the increasing demand for clean energy sources is a key factor driving the coal bed methane market, in an analysis contained in their report titled “Coal Bed Methane Market Size, Share and Global Trend Till 2026”.
Protests against fossil fuels have intensified in recent years, as activists push for stringent measures against activities contributing to the rising Earth temperatures, one of the early signs of global warming. The coal industry has been the target of the protests, resulting in some reduced financing for coal projects.
However, a new lease is offered in the form of gas projects which face less resistance from the environmental activists. Seen as a cleaner alternative, gas projects involve coal bed methane (CBM) recovery from underground coal resources during the mining operations. The extraction of CBM is carried out using vertical and horizontal drilling into the coal seams and eliminating the water content of the seam gas.
Botswana, with one of the world’s largest coal deposits, has already attracted coal explorers who want to tap in the gas industry. According to the report, plans for the development of a coal-bed methane gas-fuelled power plant in Botswana to beat electricity shortages will create growth opportunities for the market. It further highlighted the Botswana government initiative geared towards facilitating the development of the gas industry in the country.
“Since the Southern African nation has a significant energy shortage and generally relies on imported power to meet its power requirements. Therefore, the development of the power plant will bode well for the market,” reads part of the report.
This has created opportunities for CBM projects to set up operations in the country, lured by the vast coal reserves and the critical shortage of power supply.
At the forefront is Tlou Energy, proprietors of Lesedi CBM project, the most advanced gas project in Botswana. The company made impressive progress last year, achieving sustainable gas flows, while negotiations progressed well with the government, and investors showing keenness to plough their money following good prospects.
Tlou said it was confident that sustained commercial gas flows will be attained from the Lesedi pods. The gas explorer is currently locked in negotiations with the government after emerging as one of the two preferred bidders for the for the development of up to 100MW of CBM fuelled power plants in the country.
The move by the government to consider electricity supply through CBM powered plants comes on the back of challenges faced by the multi-billion-pula 600 MW Morupule coal power plant which has been fraught with problems since its commission.
The electricity and generation report for 2019 third quarter (Q3 2019) revealed that domestic electricity generation accounts for less than half of the total power distributed as Botswana continues to rely on power imports to meet demand.
The 2019’s third quarter gross domestic production (GDP) data, also reveals that growth in the water and electricity stumbled, registering at 2.4 percent decrease, slowed down by electricity which registered negative growth of 13.7 percent in the third quarter of the year after local electricity generation plunged largely due to reduced performance of the Morupule B Power Station which was not operating at full capacity.