Why Ujjwala scheme is losing battle against traditional fuels in rural India
On the face of it, Pradhan Mantri Ujjwala Yojana has accomplished a lot. More than 7 crore households have received subsidised cooking gas connections under the scheme. More than 82% of have bought refills in the last year. In Haryana, the best performing state, 97.5% of households have returned for a refill in a year. The government claims that, on average, the rate of refill is high — 6.5 cylinders a year against 8 by households with non-subsidised LPG connections. But a ground-level assessment of the scheme shows several teething problems, from delays in delivery of cylinders and subsidies to continued preference for food cooked on firewood or cow dung cake. The scheme was launched three years ago on May 1, 2016, in Uttar Pradesh’s Ballia district. Under Ujjwala, the government provides the gas cylinder, regulator, and the pipe for free. An executive at an LPG dealership in the district, who did not want to be named, said the beneficiaries of the scheme do not regularly refill their LPG cylinders because of the high price. “We have to force them to get a refill by warning them they will lose their connections if they don’t,” he said. A survey in February by Research Institute for Compassionate Economics, an Indian non-profit research, found that over 90% of Ujjwala beneficiaries still use old means of cooking. One reason for this is the stiff upfront payment for buying a refill. “Refilling a cylinder costs almost half the average monthly per capita expenditure in rural India, according to a National Sample Survey Office 2013 report, and if used exclusively, the average rural household would likely go through a cylinder each month. It’s possible that poor households do not refill their cylinders often because of the expense,” the report said. Also, solid fuels don’t cost much and are readily available. Households with cattle make dung cakes, while those that own land use agricultural waste or tree branches for firewood. Public land and forests are also a source of free wood. States with lowest rate of refills are generally those with easier access to forests. Guddi Devi of Ballia district, a beneficiary, said she uses the LPG cylinder sparingly. “For daily cooking, we use the chulha, but when guests are there, we use the LPG cylinder to make tea and snacks,” she said. Devi uses two or three cylinders a year. Official data shows that some parts of India are well below the national average of 82% refill rate. “LPG is considered unsuitable for making traditional items such as litti and rice or madua ki roti in Bihar or bajra or makke ki roti in the northern states. Chulhas are considered to add taste and flavour to such food,” an HPCL executive who served as a district nodal officer in a northern state said. LPG marketing companies have held more than one lakh ‘LPG Panchayats’ across the country to dispel these notions. “It’s difficult for these households to pay even the subsidised price, let alone buy cylinders at market price,” says Anil Srivastava, nodal officer in Ballia for state-owned gas majors IOC, HPC and BPC. LPG cylinders in Ballia cost Rs 782, and subsidized cylinders Rs 485. Households also complain of the time taken for the subsidy transfer. Many families, especially those below the poverty line, don’t have spare cash to wait for the subsidy to be transferred to their accounts beyond a few days. The subsidy amount, pegged at Rs 210.64 per cylinder with 14.2kg of LPG, is supposed to be transferred within five days after a refill is delivered. But in practice, it takes longer as rural dealers take time to send confirmations to the respective oil companies before starting the long payment process. An oil ministry official said the introduction of 5kg cylinders addresses the problem of affordability. Ujjwala households can now swap their normal cylinder for the smaller ones so the upfront payment becomes affordable. The 5kg cylinder costs Rs 184.34 after a subsidy of Rs 74.76. Ujjwala was launched with a target of giving free LPG connection to 5 crore BPL households by March 2019. The target was later raised to 8 crore by 2021 and now envisages giving all households a connection. The scheme has helped expand LPG coverage to 94% of households in the country in 2018 from 61% in 2016, and turned India into the world’s secondlargest domestic LPG consumer after China. The numbers are impressive but the next challenge is getting Ujjwala beneficiaries to make a complete shift from cooking on chulhas to LPG.
Bangladesh’s new LNG import terminal begins to feed gas to domestic grid
Bangladesh’s second liquefied natural gas (LNG) terminal has started to feed gas to the national grid after completing commissioning late on Monday, the terminal’s operator said. Summit LNG Terminal completed the commissioning of its floating storage and regasification unit (FSRU) known as ‘Summit LNG’ late on Monday, about one month ahead of schedule, Singapore-based Summit Power International said in a statement. The FSRU is 75 percent owned by Summit Corp, a unit of Summit Power International, and the remaining by Japan’s Mitsubishi Corp. About 503 million cubic feet per day (mmcfd) of gas is flowing from the FSRU – which is able to regasify 500 mmcfd of LNG – into the national grid, two sources familiar with the matter told Reuters. Summit Power International, which owns power generation assets in Bangladesh and is owned by Bangladeshi conglomerate Summit Group, has chartered the vessel from U.S. based Excelerate Energy for 15 years. “The process of feeding the gas from Summit FSRU to the national grid has started,” Nasrul Hamid, Bangladesh’s state minister for energy and power, told Reuters. “This is a huge achievement for our country’s energy security… We are taking more initiatives, including onshore and offshore gas exploration, to help feed the expanding economy.” About 3.75 million tonnes a year of LNG are expected to be imported through the facility, doubling the country’s LNG import capacity to 7.5 million tonnes per year once fully operational.
Indian Oil becomes first oil PSU to cross 1,000-patent milestone
State-owned refiner Indian Oil Corporation (IOC) said its research and development (R&D) centre has crossed the 1,000-patent mark, becoming the first Indian oil public sector undertaking (PSU) to do so. The company’s Faridabad-based R&D Centre’s intellectual property portfolio comprises 794 active patents, of which 542 patents were granted abroad and 252 in India, IOC said in a statement. Sanjiv Singh, Chairman, IOC said that several quality upgradation projects implemented at IOC refineries for the production of BS-VI fuels were based on deep desulphurization, isomerization and dimerization technology patents developed in-house. IOC’s INDMAX technology patent, successfully commercialised at Paradip Refinery, has improved liquefied petroleum gas yields by 40 percent besides ensuring the highest propylene yields in its class, the company said. It further added that the Centre’s bio-methanation technology was best-in-class in methane yields and is being implemented at the Namakkal plant in Tamil Nadu for production of compressed biogas. “With 50 per cent of its active patents in the refining category, followed by 16 percent in biotechnology, the R&D team has made considerable progress even in the highly IP-crowded field of Ziegler-Natta catalysts, used in production of polymers (plastics),” said Dr S S V Ramakumar, director (R&D), IndianOil. The R&D Centre has expanded its research domain to cover petrochemicals, nano-technology, alternative fuels, energy storage solutions, and hydrogen-based fuel cell research, among others.
In Silicon Valley, the quest to make gasoline out of thin air
Rob McGinnis recently moved to Santa Cruz, Calif., and now drives around town in a VW Golf with a rack for a surfboard on top. Like many automobiles, the car is both a form of transportation and a way for its owner to communicate some vital part of his identity. “I used to drive a Tesla Roadster,” he said. “But now I’m making gasoline cool again.” Suffice to say that gasoline—a prominent contributor to climate change—is not considered very cool right now in places like Santa Cruz, a reliably liberal town which is in the process of being swallowed by the Pacific Ocean. McGinnis’s plan to resuscitate the fuel’s social standing hinges on a machine he’s building that creates usable gas from thin air—rather than the oil deposits deep underground. He’s one of a growing number of entrepreneurs pursuing direct carbon capture technology, which extracts carbon from the air and water and transforms it into usable substances like gasoline, construction materials and industrial chemicals. Like standard fossil fuels, McGinnis’s fuel would release carbon into the air when burned—but not any more than his machine removed to make it. In theory, it’s a circular process could keep his Golf powered up indefinitely, with no impact on greenhouse gas levels. Experts increasingly believe that any serious response to climate change must include proactively removing carbon from the atmosphere. Last fall, the United Nations’ Intergovernmental Panel on Climate Change for the first time described carbon removal as “essential.” And while there are a few carbon-removal strategies, direct air carbon capture is the process that has most captured the public imagination. The basic science of this approach have been understood for decades, but it’s an open question as to when—or if—it will be possible to capture airborne carbon at a scale that could make a difference. Almost immediately after the UN report, Y Combinator, a renowned early-stage investment firm, made a show of calling for new companies working on carbon removal. The firm, famous for its role in nurturing software companies like Airbnb Inc., Dropbox Inc., and Stripe Inc., said it was interested in projects that were “risky, unproven, even unlikely to work,” and suggested exotic ideas, such as building huge reservoirs in the desert stocked with genetically modified phytoplankton. “It’s time to take big swings at this,” YC wrote in its call to action. McGinnis’s company, which he named Prometheus, was offering exactly the kind of classic moonshot YC seemed to be seeking: a far-fetched idea that made sense on paper and could change everything on the off-chance it developed beyond that. When YC sorted through the dozens of pitches it received, his was one of just two in which it decided to invest. McGinnis brought his machinery – a six-foot tall box with several doors held closed by padlocks – to YC’s semiannual Demo Day in March. The event, a two-day marathon of startup pitches, is attended by some of the most high-profile investors in the world. McGinnis told the crowd he’d be making fuel that he could sell at a profit by as early as next year. (Hear more about McGinnis’s YC pitch and the carbon capture effort in this week’s episode of the Decrypted podcast.) This was exactly the sort of thing people wanted to hear, according to Gustaf Alströmer, a YC partner who’s working on its carbon project. “If you say, ‘I’m making gasoline,’ even if there’s a one in 500 or one in 1,000 chance it actually works, you will resonate very well with investors,” he said. Within weeks, McGinnis had raised enough money to hire several people and begin planning to move beyond a single prototype machine. McGinnis took an unusual path to being an alternative fuel evangelist. He attended Yale as an undergraduate theater major, where he wrote plays he described as “techno-optimistic, strange, mini epics.” In his spare time, he built his own desalination machine. The side project eventually inspired him to leave the theater and get a PhD in chemistry. Eventually, his desalination hobby turned into a desalination company. He was successful enough that McGinnis bought that Tesla, along with a vanity license plate carrying the company name: Oasys. McGinnis then launched a second startup that made materials useful for separating chemicals into their chemical components. The membranes, known as carbon nanotubes, allowed him to conduct several steps of the separation process while the carbon was still in liquid form—making the process significantly cheaper. That idea gives Prometheus its competitive edge. McGinnis’s breakthrough struck Matt Eisaman, an assistant professor in the engineering department at Stony Brook University, whose research had been the basis of an effort by Google X to create fuel from seawater. The two-year-long project, which ended in 2016 and was dubbed Foghorn, was successful in making fuel. But Google nixed it anyway because it saw no clear path to make its product at competitive prices. Foghorn had been working with carbon and hydrogen at high temperatures in gaseous form, and Eisaman saw McGinnis’s work as a potential step forward. “I’ve seen a lot of attempts of, ‘How do you make a carbon-neutral fuel cost effective?’” he said. “I can get a good sense early on if there’s a chance.” Eisaman signed onto Prometheus as an advisor, but he remains cautious about its chances. When asked whether he thinks anyone can figure out a carbon-to-fuel process that will be economic at large scale, Eisaman pauses for a long time. “I don’t know,” he said finally. McGinnis, of course, is considerably more bullish. He predicts he’ll be selling a small amount of gasoline by next year in the $3 per gallon range. McGinnis acknowledges that reaching a scale vast enough to make a difference in the climate remains dauntingly expensive. He estimates that it would cost $800 billion to replace the U.S. gasoline market with carbon-neutral fuel. But there’s no need to wait. Prometheus can sell any gas it makes into markets that already exist, and it can be used to power
Gujarat Maritime Board’s Rs 500 crore push for LNG terminal at Mundra
The Gujarat Maritime Board (GMB), which regulates maritime activities in the state, has firmed up plans to invest Rs 500 crore in the proposed Rs 5,000 crore Mundra LNG terminal in Kutch. With this, the LNG terminal that was inaugurated by Prime Minister Narendra Modi in September last year is likely to be commissioned within the next two months. The project being implemented by GSPC LNG Ltd, a unit of Gujarat State Petroleum Corporation Ltd (GSPC). GMB’s move follows Indian Oil Corporation’s (IOC) decision to drop its plan to invest in the project with the proposed capacity to re-gasify 5 million tonnes per annum (mtpa). A senior official involved in the project said that decks have been cleared by the state government for GMB to invest in the terminal. The Gujarat government owns 50% share in GSPC LNG while 25% is owned by the billionaire Gautam Adani promoted Adani Group. “The authorized share capital for GSPC LNG is yet to be decided. GMB may pick up around 40% of the equity stake in the project for its Rs 500 crore investment,” said a state government official in the know of the development. The government has also held talks with the Adani Group to offer an additional stake to them, however, things have not materialized so far, the official said. When contacted, an Adani Group official refused to comment on the matter. The present promoters, especially GSPC, will have to dilute its stake to accommodate GMB as a third partner, the government official said. The government has been looking to induct a third partner in the project for many years now. The project commissioning has been facing delays as land lease and sub-concession agreements were not signed between the promoters and the Gujarat government. The terminal’s capacity can be expanded to 10 mtpa and is designed to have a berth for receiving LNG (liquified natural gas) tankers and storage tank facilities for re-gasification and gas evacuation. Indian Oil had earlier announced plans to pick up a 50% equity stake in the project for which it got in-principle approval from its board in August 2017. IOCL, which has carried out due diligence of the project, informed Gujarat government last year that it had dropped its investment plans. GSPC had a majority stake in the project, but the organization has been under financial stress. Subsequently, the state’s energy and petrochemicals department have funded a major part of the project. Gujarat State Petronet Ltd, a subsidiary of GSPC was also offered to pick equity stake in the LNG project. However, GSPL has already made a substantial investment of Rs 3,250 crore in Gujarat Gas Ltd last year and it is not looking at fresh investments presently, said a GSPC official.