Alkane predicts bright future from coal mine methane

12 September 2002 – A pre-tax loss of à‚£ 113 000 ($176 000) for the first half of 2002 did not deter UK coal mine methane developer Alkane from predicting a bright future for the company.

“Recent action by the UK Government shows that Coal Mine Methane (CMM) is being accepted as a form of alternative energy and a way of eliminating a highly toxic greenhouse gas,” said Executive Chairman, Dr Cameron Davies. He added that lower UK power prices had led Alkane to be more selective in its site development programme.

Alkane has four operating sites and plans to add six new sites by the end of 2003.

The government has exempted CMM from the Climate Change Levy and EU state aid clearance is expected early in 2003. This will enable Alkane’s customers to obtain a premium price for the electricity generated from CMM a proportion of which will be passed back to Alkane, potentially increasing turnover at the relevant sites by around 15 per cent.

The Government has also indicated that methane from abandoned mines is to be treated as a priority for inclusion in the ‘Projects’ section of the Emissions Trading Scheme (ETS). Inclusion in the ETS would enable the company to sell the carbon emissions reductions achieved at its sites into the emerging market for carbon emissions. This could represent a significant additional income stream for the company in future years.

The lower electricity prices and bank interest rates saw Alkane predicting that 2004 will now be earliest that a financial return will be possible from its roll out programme.

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