Our Coal Our Future – Future opportunities for brown coal


The increasing scarcity and cost of energy sources such as oil and gas presents opportunities for a new range of commodities and exports derived from brown coal, a resource that is a major contributor to Victoria’s economy. These medium and long-term opportunities exist in addition to electricity generation, which is the current predominant use of brown coal in Victoria.

Australia has one of the world’s largest deposits of brown coal and almost all of Australia’s brown coal is found in Victoria. The State’s brown coal is estimated to total 430 billion tonnes in situ, with an estimated potential economic resource of 33 billion tonnes located in the Latrobe Valley, 160km south east of Melbourne. Victoria’s four major power plants are located in the valley and mine over 65 million tonnes of brown coal annually. This in turn generates more than 85 per cent of the State’s electricity for its 5.3 million residents and businesses (Figure 1).

Currently, “run of mine” coal is not exported due to its reactivity and high moisture content. It is predominantly used to feed mine-mouth power generation facilities to service the domestic power market. Accordingly there is no global market price for the “run of mine” product at present.

The State’s power demand is projected to increase over the next decade and beyond. Victoria’s dependence on brown coal for electricity production will continue, assisted by the commercialisation of new low emissions coal technologies.
New opportunities for brown coal

Due to the rapid changes in global energy demand, rising oil prices and strengthening commodity markets, the opportunities for major investment in utilising Victoria’s brown coal have increased, not only for domestic markets but also for the rapidly expanding markets in the Asia pacific and beyond.

Technology to convert coal to liquid or gaseous fuels has been available in various forms since the 1920s, but costs had rendered it uncompetitive. The new market dynamics for commodities such as diesel, urea, methanol and its derivatives and the adoption of new low emissions coal technologies is now providing opportunities for brown coal, as a low cost feedstock to compete with traditional feedstocks (such as oil, gas and black coal) commonly used to produce these commodities.

In addition to opportunities to convert brown coal to tradable commodities, the adoption of suitable drying technologies is expected to enable brown coal to be exported in its own right and compete directly in black coal markets as an energy and feedstock resource.

It is predicted that Victoria’s brown coal resources will have the following development pathway through the application of different technologies (Figure 2).
Potential products derived from brown coal

The following alternative products present exciting challenges and opportunities for Victorian coal.
Solid fuels and products

Brown coal in raw form can be used for boiler fuel in power generation. Value can be added with drying technologies to transform the product into high energy content briquettes and pellets that may compete with black coal as an exportable fuel.

Chars and cokes may potentially be derived from brown coal for pyrometallugical applications, to produce reductants and carburising chemicals and as a general carbon source for other applications.

Calcium loaded char has applications in water & waste treatment and as an ion-exchange medium. In the future, brown coal may even be refined into a purer form of carbon for use in production of a myriad of carbon products including carbon fibres, carbon anodes, activated carbons, filter aids, pigments, graphite lubricants and conductors and formed carbon materials.
Coal Seam Methane

Coal Seam Methane (CSM), found naturally in coal seams, has potential use in the reticulated gassupply, for the generation of electricity and for theproduction of derivative products.

In Australia, CSM is extracted from black coal but can also be extracted from brown coal as has been done on a large scale in the United States (Powder River Basin).

Brown coal deposits in Victoria have potential for CSM extraction but exploration is required to test the potential productivity of reservoirs. Issues including coal porosity and groundwater extraction need to be considered in new developments.
Gaseous products and hydrogen

Gasification of coal to produce synthesis gas (syngas, a mixture of predominantly carbon monoxide, carbon dioxide and hydrogen), can convert solid coal into a gaseous feedstock that is a precursor to a range of other products (Figure 3). The process can also facilitate the separation and sequestration of carbon dioxide.

Victoria has had a long history of brown coal gasification – which provided town gas in the Latrobe Valley before natural gas from Bass Strait became available in the 1960s.

Hydrogen, one product that can be derived from syngas has potential to be used directly as a fuel gas, in fuel cell technologies, stationary power production and for use in vehicles.

Underground coal gasification also has emerging potential to produce syngas and may be able to exploit low quality, economically un-mineable deeper coal seams by in-situ coal gasification (underground) with relatively low capital investment. For this process to become a viable large scale industry, issues surrounding the predictability and controllability of syngas for certain applications need to be managed as do any potential environmental risks.
Figure 3.
Figure 3.
















Liquid products

Liquid products from coal can be produced either from syngas via gasification or by the direct liquefaction of brown coal.

Through the syngas pathway, liquid fuel products such as diesel, methanol, fuel gasoline blends, and high octane gasoline extenders can be produced (Figure 3).

The direct liquefaction pathway generally produces lower quality products such as synthetic crude oil which with further processing may be used to produce fuel oil, diesel, motor fuel blends, kerosene, heating oil etc. Non-fuel products may also be produced including solvents, polymers, surfactants, lubricants and a suite of other carbon-based chemicals.
Waxes, resins and polymers

A range of waxes may be produced using products derived from brown coal, as well as phenolic resins and plastics, composites, low strength structural and building materials.
Agricultural products

Raw brown coal can be used as a soil conditioner by providing a source of humus for potting mixtures and market gardens and as an admixture to other fertilisers and soil conditioners.

Syngas manufactured from coal can be used to produce ammonia, the key pre-curser to nitrogenous fertilisers. At present these fertilizers are more commonly made from oil and natural gas based feedstocks.
New technology research
Figure 4. Expenditure by mining businesses on research
Figure 4. Expenditure by mining businesses on research and development in Victoria 1995-96 to 2005-06 ($millions) (DPI, At a Glance 2008, Victorian Minerals and Petroleum Industries)

Investment in research and development in the mining sector in Victoria is at an all-time high (Figure 4). In 2005-06, mining businesses outlaid more than AUD$145 million on research and development in Victoria, equivalent to 8.6% of total R&D expenditure by mining businesses in Australia and more than 4.9% of total expenditure on research and development of all businesses in Victoria.

The Victorian Government provides direct support for industry-led low emissions coal technology development through the Energy Technology Innovation Strategy (ETIS).

The Department of Primary Industries’ Energy Technology Innovation Division works alongside local and international industry partners, major research bodies, academia and investors to prepare these technologies for market uptake and commercialisation.

Through these partnerships, the strategy seeks to balance both the environmental and economic impacts of climate change.
Looking to the future

Coal is abundant, affordable, available and reliable and is vital to the world’s sustainable energy needs. World energy demand, consumption and prices are dramatically increasing as is the price of metallurgical and thermal coal.

With coal being integral to Victoria’s economy, the use of drying, gasification and liquefaction technologies will enable the State’s brown coal to be used to produce key commodities such as diesel, urea, petrochemicals and hydrogen, as well as exportable coal, and in so doing substitute for the conventional feedstocks such as oil, gas and black coal.

With support from the Victorian Government, these technologies as well as carbon capture and storage opportunities can open direct export markets for the State, whilst ensuring reduced carbon emissions to meet the global greenhouse gas challenge.

http://new.dpi.vic.gov.au/earth-resources/investment/our-coal