Underground coal gasification (UCG) is promising to be an important means of meeting the increasing energy demand in several countries. UCG is inherently an unsteady process since a number of parameters, such as the growth of the cavity, inherent variation in the properties of the coal along the seam, quantity of water influx, ash layer build-up, affect the rates of the homogeneous and heterogeneous reactions occurring therein. In the present study, UCG conditions have been simulated using laboratory scale borehole combustion experiments for three coals and wood block and the effect of some of these parameters is investigated using pure oxygen or oxygen and steam as the gasifying agent. It is shown that, unlike recent reports in the literature, product gas of reasonably high calorific value can be produced on a sustained basis without having to use highly superheated steam as the gasifying agent. Incorporating the results into an integrated underground gasification steam cycle (IUGSC) based power generation system with carbon capture and storage (CCS) shows that the net efficiency penalty for CCS is significantly less than that estimated for conventional systems. © 2012 Elsevier Ltd.