Life cycle cost analysis of power generation from underground coal gasification with carbon capture and storage (CCS) to measure the economic feasibility

To achieve the 1.5 degrees C target of the Paris Agreement and China's carbon neutrality by 2060, large-scale emission reduction efforts should be implemented by the coal power industry in China. Hence, it is necessary to seek a more energy-efficient and low-carbon path for the coal power sector. Underground gasification combined cycle (UGCC) with carbon capture and storage (CCS) is regarded as a promising method of carbon-neutral coal gasification power generation, capable of effectively reducing greenhouse gas emissions and environmental pollution. However, the UGCC-CCS project has not yet been commercialized, and cost competitiveness is a crucial aspect that cannot be overlooked in addition to technological issues. Currently, few studies have looked into the external cost of environmental consequences. This paper presents a life cycle cost model to measure the economic viability of UGCC with and without CCS. The study established six different scenarios, and the research results were compared with those of IGCC power plants. The established cost model considers both the internal levelized cost of electricity and external environmental costs, covering all costs such as initial investment, operation, maintenance, processing, and final disposal expenses. The results indicated that under equidistant transportation conditions, the life cycle cost of the UGCC power plant is 61.80$/MWh, which is 21.06% lower than that of the IGCC power plant, with external costs accounting for 13.9%. After deploying CCS, the life cycle cost of the UGCC power plant increased by 18.96%, but the external costs accounted for less than 5%. It can be seen that the addition of CCS can effectively mitigate the impact of external costs on the life cycle cost. Additionally, the influence of syngas transportation distance on the life cycle cost was significant. When UCG was located near the power plant, the life cycle cost of UGCC can be reduced by 20.86%. Therefore, it is recommended to reduce internal costs further through technological innovation, such as utilizing thicker coal seams. Simultaneously, by imposing environmental taxes and implementing carbon emission trading, enterprises can be encouraged to minimize greenhouse gas and pollutant emissions, thereby controlling external costs. The conclusions and recommendations proposed in this paper may inspire the power sector to seek alternative coal-fired technologies.