Cogeneration/IPP Development in the Virginia Coalfields: Coal and Natural Gas Availability

Abstract

This study attempts to quantify the potential for cogeneration and independent power production (IPP) development based on local ruel availability in the Virginia coalfields. An estimate of available fuel is determined from interviews with a sample of the region's largest coal and natural gas producers. They were asked specifically what quantity of coal or gas they would be willing to provide under long-term contract to such local facilities. Certain assumptions on price and fuel quality were prnvided. The study demonstrates that, given the right price conditions, substantial coal supplies could be available to such a local cogeneration/lPP market. Surveyed producers indicated about 4.5 million tons per year might be available. These producers represent 82 percent of Virginia's coal production. The major factors arfecting their willingness to provide this coal include: (1) the desirability of long-term contracts; (2) the flexible coal quality specifications such plants would accept; and (3) the dedicated, local market that would help secure them from the uncertainty of distant markets and rail transport costs.