Alkane Energy PLC
10 October 2002



10 October 2002



                               Alkane Energy plc
 


              Minister opens a new Green Energy Park in Yorkshire



Alkane Energy plc is pleased to announce that the official opening of the
Wheldale Green Energy Park by Mr Brian Wilson MP, Minister of State for Energy
and Construction, took place today.



The Green Energy Park is built on the derelict site of the former Wheldale coal
mine, where coal mine methane (CMM) had vented freely to atmosphere since the
closure of the pit in 1987.  Alkane engineered a complete new seal for the mine
shaft and now captures this gas and supplies it to Scottish & Southern Energy
plc for on-site electricity generation.



CMM is a dangerous gas that escapes into the local environment from cracks and
fissures in the ground and pollutes the global atmosphere.  It is an explosive
gas 23 times more damaging than carbon dioxide in terms of global warming.  It
can continue to escape into the atmosphere for more than 50 years after a mine
has been closed. Alkane's green projects therefore benefit the environment and
also bring inward investment and jobs to coalfield communities.



Alkane is the UK's leading commercial producer of CMM from abandoned coalmines
and the pioneer of this new industry in the UK.  Using its unique technology, it
has already opened Green Energy Parks in the East Midlands area and another site
in Barnsley where CMM is supplied to Rexam Glass as fuel for one of its
furnaces.



Commenting on the official opening of the Wheldale Green Energy Park, Executive
Chairman of Alkane, Dr Cameron Davies said:



"We are delighted with the Wheldale project which showed that the commercial
extraction of CMM is viable as a source of alternative energy.  The Government
has already recognised that this new industry reduces the UK's output of
greenhouse gas emissions and is a valuable source of green energy.  However, we
continue to lobby for this form of greenhouse gas capture to be treated in a
similar manner to landfill and sewage methane by inclusion in the Renewables
Obligation."



Mr David Sigsworth, Generation Director, Scottish & Southern Energy plc said:



"We are very pleased with the efficient operation of the 10MW Wheldale
distributed power station and the on-site methane extraction plant.  Scottish &
Southern Energy is committed to the development of green energy in a variety of
forms, and we consider coal mine methane to be an important element of that
commitment."







For further information contact:


Alkane Energy plc
Dr Cameron Davies, Executive Chairman                  Tel: 01623 827927

Binns & Co PR Ltd
Judith Parry/Sophie Morton                             Tel: 0113 242 1171





Editors' notes:



*        Alkane Energy plc was listed on the main market of the London Stock
Exchange in December 2000.  To date, the company has developed five Green Energy
Parks in the East Midlands and Yorkshire.



*        Since 1996, Alkane has accumulated a widespread portfolio of 28 licence
areas covering abandoned and operating mines in England, Scotland and Wales.
These DTI petroleum licences give it exclusive CMM production rights over a
total area of 5590 km(2), the largest licensed acreage relating to potential CMM
extraction in the UK.  There are nearly 400-abandoned coal mines on this acreage
with CMM and coal bed methane potential.



*        The company has begun investing in a CMM capture-to-electricity project
at the Prince of Wales Colliery, the last deep mine in West Yorkshire, following
its recent closure.  The company has worked closely with UK Coal, since closure
plans for this mine were first announced, to design the plant and install the
required gas extraction pipe work in the drifts before they were finally sealed
in September.  It is anticipated that this Green Energy Park will commence
operations during 2003.



*        In the light of the very low electricity price that is expected to
continue in at least the medium term, Government support is crucial to the
development of this new industry.  ACMMO, the Association of Coal Mine Methane
Operators, therefore continues to lobby for renewable status for this green
technology, because the capture of methane from any source whether it is
landfill, sewage or a coal mine benefits the planet and the local environment.



*        There are more than 1,000 abandoned coal mines in the UK, which ACMMO
estimates may add up to 13.8 million tonnes per annum to its greenhouse gas
emissions.  The International Panel on Climate Change has assessed methane as
having a Global Warming Potential (GWP) 23 times higher than that of CO(2).



*        Full exemption from Climate Change Levy was incorporated in the Finance
Act 2002 and EU state aid clearance for implementation is expected early in
2003.  This measure corrected the anomaly that CMM supplied direct as gas was
exempt but electricity generated from it was subject to this carbon tax.



*        The Government has set targets in the Utilities Act 2000 by which
electricity producers will be obliged to produce at least 10% of their
electricity from a renewable energy source by 2010.  CMM generated electricity
could help achieve this target.



*        Germany granted renewable status to CMM along with landfill and sewage
methane capture technologies in the Renewables Act 2000 (EEG law).  The result
is that CMM generated electricity can be sold at a premium of about 5p per KWh
to the wholesale price, making methane capture projects as small as 0.5 MW
economically viable.   In the UK, CMM generated electricity must be sold at the
wholesale price of about 1.7p per KWh at which level only large plants like
Wheldale are economic.


                      This information is provided by RNS
            The company news service from the London Stock Exchange
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