Page 4 - AsiaElec Week 34

AsiaElec COMMENTARY AsiaElec
Gas struggles to gain ground in India’s power sector
Gas is gaining traction as a residential and transportation fuel, but is struggling to compete with low-cost and abundant supplies of coal in the power industry
INDIA
WHAT:
India wants to increase gas consumption to 15% of the energy mix by 2030
WHY:
The country is the world’s largest emitter of SO2 and gas could help to reduce urban pollution
WHAT NEXT:
With little political support for gas- red power, coal will remain dominant throughout the next decade
INDIA has touted natural gas and renewable energy as the answer to mounting urban air pol- lution, but structural ine ciencies within the power sector and a lack of support for gas as a generation feedstock should help coal keep its pole position for years to come.
A new report by Greenpeace has found that India is the world’s largest emitter of anthropo- genic sulphur dioxide (SO2), with more than 50 SO2 emitting hotspots. National emissions amount to 4,586 kilotonnes per year, ahead of Russia’s 3,683 kilotonnes and China’s 2,578 kilotonnes.
Greenpeace senior campaigner Pujarini Sen called the situation an “air pollution emergency”, adding: “ is report makes it clear that we can- not give coal power plants a free hand to continue polluting and keep leading to health emergency situation in India due to air pollution.”
The government has pinned its hopes on diversifying its energy sources, setting a target of expanding gas’ share of the energy mix from 6.2% at present to 15% by 2030. Prime Minister Narendra Modi’s government has also set a tar- get of increasing the country’s renewable energy capacity to 175 GW by 2022.
India is making strides in expanding the country’s gas consumption, with state-run gas utility GAIL (India) unveiling a new ve-year investment plan for the country’s gas grid. However, a continued focus on pushing gas use within the residential and transportation sectors is doing little to help dethrone coal as the fuel of choice for most new thermal power plants (TPPs).
Infrastructure ramp-up
State-run gas utility GAIL will invest more than INR450bn ($6.29bn) over the next ve years to expand the national gas grid as well as its city gas distribution (CGD) network.
e company is building more than 5,700km of gas pipeline, chairman Ashutosh Karnatak told the company’s annual general meeting on August 20, adding to its existing 11,000km of operational pipeline. GAIL handles around two thirds of the country’s natural gas sales.
Karnatak said INR320bn ($4.47bn) would go towards laying pipeline, with another INR120bn
($1.68bn) earmarked for developing CGD net- works. e company said it was seeking to build 400 compressed natural gas (CNG) stations and deliver 1mn residential piped gas connections over the next ve years.
e company is building a 2,655-km pipeline from Jagdishpur in Uttar Pradesh to West Bengal and Odisha.
“Around 1,050 km of pipeline projects along Varanasi-Dobhi-Patna/Barauni, Aurai- ya-Phulpur and other last-mile connectivity were completed during the 2018-19 scal,” Kar- natak said.
While the company’s efforts are certainly laudable, and will help reduce a reliance on LPG for cooking and heating, the investment roadmap highlights a lack of focus on replacing coal with gas in power generation. e problem for the cleaner burning fuel lies in how much cheaper coal is.
India set the price of domestic gas production at $3.69 per per million British thermal units ($102.07 per 1,000 cubic metres) from April 1, while S&P Global Platts has calculated that the average price of coal for the rst seven months was $2.75 per mmBtu ($76.07 per 1,000 cubic metres).
King coal
India has an abundance of coal, with extensive deposits situated in the north-east of the coun- try. e fuel provides half of India’s commercial primary energy and is the dominant feedstock for power generators.
US think-tank the Brookings Institution released a report on the country’s power sector earlier this year and predicted that coal would remain the dominant fuel up to and beyond 2030 owing to its cost advantages.
The Indian power system’s built-in ineffi- ciency and rigidity make any changes to the feedstock mix a challenge. The report noted that state-level power distributors buy electricity from generators, predominantly through power purchase agreements (PPAs), which treat all power the same regardless of source. at power is then sold to end-users at regulated prices, forcing distributors to sell below break-even prices and reducing their ability to reinvest in
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w w w . N E W S B A S E . c o m Week 34 27 •August•2019