The cogeneration of substitute/synthetic natural gas (SNG) and power from coal based plants with CO2 capture is an effective way to improve energy efficiency and to reduce CO2 emissions. In this paper, we evaluate the techno-economic performance of a SNG and power cogeneration technology with CO2 capture. Current localization level (the cost difference of a technology in different nations and districts) of each subunit of this technology is analyzed. The cost reduction potential of this technology is also predicted, and the role of technology localization and efficiency upgrade in cost reduction is investigated based on a range of learning rates and different coal prices from 90$/t to 150$/t. Results show that the unit investment of this cogeneration technology presented in our previous paper is around 1700$/kW currently and the investment of SNG synthesis, coal gasification and combined cycle unit comprises over 60% of the total investment. The equivalent SNG production cost is quite sensitive to coal prices and ranges from 0.15 to 0.50$/Nm(3). Through localization, the unit investment of this technology can be decreased by 30% currently. The key technologies including coal gasification, SNG synthesis and high performance gas turbine need further localization because of their relatively low current localization levels and big localization potential. Through cost learning, the future investment of the technology can be decreased to 700-1100$/kW, which may be competitive with the unit investment of IGCC technology with CO2 capture and even may be lower than that of the pulverized coal power plant with CO2 capture. Technology localization and efficiency upgrade will play important roles in cost reduction, which can contribute 300-500$/kW and 125-225$/kW to cost reduction, respectively. The results presented in this paper indicate that the coal to SNG and power technology with CO2 capture is a promising and competitive option for energy saving and CO2 abatement, and can be a support for policy making, technology options etc. (C) 2014 Elsevier Ltd. All rights reserved.