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In order to investigate the gasification performance of coal with high water content, a two‐stage fluidized bed gasification (TSFBG) system was systematically simulated by Aspen Plus to identify the effect of pre‐drying for coal with its initial water content varying from 10‐65 wt% on gasification performance, particularly energy efficiency. The results show that the energy efficiency based on lower heating value (LHV) (ηLHV) and higher heating value (HHV) (ηHHV) of feed coal are about 1.5%‐7% and 1.5%‐5% higher when coal is fed to the system directly without pre‐drying. For the TSFBG system, the higher the water content, the greater the energy efficiency reduction by pre‐drying. The analysis of energy allocations reveals that heat loss due to the pre‐drying of coal is mainly responsible for the decrease of energy efficiency in operations with pre‐drying. With an increase in the initial water content from 10 to 65 wt%, the ηLHV of the TSFBG system without the pre‐drying of coal using air/steam as gasification agent reaches its maximum of about 91% at an initial water content of 26 wt%. The ηLHV and ηHHV of the TSFBG system using oxygen/steam as gasification agent increases energy efficiency by about 1%‐2% compared to that using air/steam. For TSFBG using air/steam to gasify coal without the pre‐drying, the preferred initial water content of coal is below 50 wt%. [ABSTRACT FROM AUTHOR]