Analysis of Cost Competitiveness of Coal-to-Gas: A Case Study

Abstract

The cost of enterprises that supply Coal-to-Gas (CTG) or coal gas enterprises includes manufacturing costs, selling expenses, overhead expenses, taxes and dues, and financial costs. This study analyzes the cost composition of CTG based on actual production and financial data of a typical coal gas enterprise. The results demonstrate that in the current stage, financial cost accounts for a huge portion of the cost of coal gas enterprises, reaching over 40%. This high proportion of financial cost is a result of costly primary investment and high bank interest, which imposes great restrictions to the sustainable development of the coal gas enterprises. The large-scale development of coal gas enterprises is heavily reliant on support from government policy and the construction of a pipeline network by the government.