The economics of coal liquefaction. Part 1 a probabilistic approach

British Coal is developing a process for the production of transport fuels from coal and has built a pilot plant at Point of Ayr, in North Wales, to test its technical feasibility. The project is supported by the European Commission, the UK department of Energy, Ruhrkohle Oel und Gas, and Amoco. Among the project objectives is the preparation of reliable cost estimates for the production of coal-derived liquids. These provide an economic basis for further process development. This paper contains a description of the probabilistic risk assessment model, using discounted cash flow techniques, developed to assess the economic viability of commercial scale operation. An example is given that shows that a straightforward application of the current technology has a reasonable probability of being viable by the year 2015. However, this result is necessarily dependent on many assumptions, including, for example, future oil and coal prices.