Powerfuel plc owns and operates the Hatfield Colliery in South Yorkshire through its subsidiary, Powerfuel Mining Ltd. The Hatfield colliery has access to approximately 100 million tonnes of British coal. Powerfuel also has consent to develop a 90 acre business park on land it owns adjacent to the colliery. The first 50 acres of this land will soon be available for occupation.

Powerfuel is probably best known, however, for its plans to build and operate the first commercial, large scale, coal fired power station with Carbon Capture and Storage (CCS) in Europe. This power station will be a 900MW (gross) IGCC power project which is designed to become a “coal minemouth” operation with around 90% carbon capture. The funding structure to support the project is currently being developed by another Powerfuel subsidiary, Powerfuel Power Limited.

While production of coal from the Hatfield Colliery dates back to 1920, Powerfuel has undertaken major investment to re-open the mine which recently returned to coal production following the development of a new working face in the “Barnsley” coal seam. Coal from the site is produced solely for electricity generation. All current coal production is being purchased by local power stations.

In 2003 the government gave consent, under Section 36 of the Electricity Act 1989, for the construction and operation of a 430MW IGCC power station on the site. An application has recently been made to increase the size of the plant to 900MW and consent for the larger plant is expected to be received shortly. The revised planning application is consistent with Powerfuel’s intention to develop the power project in two phases. Phase 1 will involve the development of a “syngas ready” CCGT power island which will operate on natural gas only. During Phase 2 the coal gasification island will be commissioned together with an associated carbon capture facility and the plant will commence operation as an IGCC.

A gasifier licence was signed with Shell in April, 2007 and a Letter of Intent has been signed with Air Products to build, own and operate the Air Separation Unit. Jacobs Consulting has been engaged to carry out a full FEED study which commenced in the summer of 2007 and a Letter of Intent has been signed with GE for the power train engineering equipment package. In addition, the EPC tender process for Phase 1 of the project is underway and discussions are taking place concerning gas supplies, power purchases, O&M etc. The site is conveniently located in South Yorkshire to provide access to the North Sea for storage of CO2 following capture. Indeed, the density of existing and planned CO2 emissions will certainly enable the development of a cluster of CCS projects in the Yorkshire and Humberside region.

The project has succeeded in contracting for an electrical grid connection for 2011 when Phase 1 of the project is due to be completed. All of the other activities currently taking place are consistent with the completion of Phase 2 by 2013.