Maltby provides Alkane with a rich seam

ALKANE Energy​, which mines methane gas from redundant Yorkshire coal mines, said it has made a good start to 2015 boosted by a strong performance at the former Maltby Colliery.

Maltby, near Rotherham, was finally closed last spring and Alkane moved into full production over the summer.

Alkane’s CEO​ ​Neil O’Brien​​ said:​ ​“Maltby, which is clearly our biggest site now, is performing ahead of our business plan. It’s going well. The reason the mine was closed was there was an excess of methane leaking off.”

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Elsewhere in Yorkshire, operations at the former Wheldale Colliery in Castleford were delayed by two months as new engines were brought on site, but Mr O’Brien said the mine is now running at full capacity.

“It’s a 10MW site. We installed new engines and yes we were a few weeks late, but it’s running really well now,” he said.

The two-month delay to the upgrade of capacity at Wheldale and Shirebrook, plus fewer than anticipated calls from National Grid, hit 2014 pre-tax profits, which fell slightly from £3.4m to £3.3m.

Wheldale is both a coal mine methane producer and a power response site, the name given to former mines that have no methane left but the mine workings are used to buy in gas to produce power to feed the grid.

Alkane said it is seeing the benefit of increased production in the current year.

National Grid calls on Alkane’s power response sites when there is a supply wobble, known in the trade as a “kettle blip” (when everyone puts on the kettle during the TV ad breaks), but Mr O’Brien said calls were down as a result of the firm being “slightly overpriced”.

“Our competitors underbid us, but we will leapfrog them in April. We are likely to see an increase in calls this year.

The next “kettle blip” is expected to happen on March 20 when a solar eclipse takes place at around 9.30am, which will cover up to 90 per cent of the sun in Yorkshire.

Alkane is expecting to be called on as solar power stations won’t be able to run during the duration of the eclipse.

The next blip could well take place during the night of May 7 when a close General Election is expected to keep many people out of their beds and glued to the TV until the early hours to find out the result.

“A General Election is a real problem for National Grid. If it’s a close result people could be sat there at 4am watching the TV,” said Mr O’Brien.

National Grid turns to suppliers like Alkane during these blips as it only takes 15 minutes for a power response site to generate power. A big power station takes four hours to run up, which makes it uneconomical if power is only needed for a few hours.

Alkane will open a new site in Yorkshire this autumn at the former Markham Main Colliery on the edge of Doncaster, where methane gas production is expected to be “very strong”.

Analysts at Liberum said: “Power output continues to expand as the group grows its power response business and 2015 has started well. Weak power prices are a headwind, but significant forward contracting mitigates this impact in the short term.”