IGX trades over 0.886 million mBtu gas in December, up 382% YoY
Indian Gas Exchange (IGX) on Wednesday said its platform traded 88,64,550 million British thermal unit (mBtu), or around 223 million metric standard cubic meters (mmscm), gas volume in December, a whopping 382% jump over the year-ago period. IGX recorded highest single day trade of 53,02,600 MMBtu, said a statement from the exchange. During the month, the exchange traded gas flows was 87,42,250 MMBtu (~7.1 MMSCMD) volumes which is around 4.5% of India’s gas consumption. Exchange witnessed participation from more than 50 buyers from various sectors such as CGDs, petrochemical, power, glass, ceramics, aluminium, marketers etc. During the month, Matrix Gas and Renewables Private Limited and Central U.P. Gas Limited joined IGX as proprietary members. “GIXI (IGX Gas Index) for December 2022 was ₹1,294 /$15.7 per MMBtu. Different spot gas benchmark prices recorded were, HH at ~$5.7/MMBtu, TTF at ~$36/MMBtu & NWE at ~$30/MMBtu, whereas LNG benchmark indices were: WIM ~30 $/MMBtu. The competitive prices discovered at IGX have been a true reflection of India’s gas demand and supply, including the LNG long-term, spot, and domestic gas prices,” Indian Energy Exchange (IEX) said in a statement.
Explainer: Gas sector needs sound regulation
In the downstream sector, the Petroleum and Natural Gas Regulatory Board (PNGRB), set up under the PNGRB Act, 2006, regulates the laying/expanding of transmission pipelines for gas and petroleum and city/local gas-distribution networks. India’s gas economy is facing severe constraints owing to stagnant domestic output. While a high-level panel recently backed pricing freedom, issues relating to regulation of pipeline networks also need addressing. Against this backdrop, there are plans to amend the PNGRB Act. Rajat Mishra takes a look at the gas-economy norms. The directorate General of Hydrocarbons monitors upstream operations. It enforces production/revenue-sharing contracts with private operators. In the downstream sector, the Petroleum and Natural Gas Regulatory Board (PNGRB), set up under the PNGRB Act, 2006, regulates the laying/expanding of transmission pipelines for gas and petroleum and city/local gas-distribution networks. An entity that lays the pipeline will have the right of first use, and others must pay it for use of the pipeline. Businesses must register with the PNGRB to market petro-products and natural gas, set up/operate terminals and storage beyond specified capacities. PNGRB orders can be challenged before the appellate electricity tribunal, and then courts. The PNGRB can impose fines up to Rs 250 million for non-compliance, with additional fines of up to Rs 1 million for every day of continued contravention of orders. Wilful failure to comply with appellate tribunal orders may draw a fine of up to Rs 10 million; subsequent offences will attract fines up to Rs 20 million, and continuing contravention, fines of up to Rs 2 million/day. The board lacks a clear mandate to ensure competitive gas markets. Gas price is regulated separately by the Centre. While many back scrutiny of costs, others say free pricing will ensure more upstream investment, and competition will foster fair play. The PNRGB also can’t ensure retail service obligations. It is also argued that the pipeline tariffs fixed by it on the basis of common carrier principle don’t incentivise efficiency much. The regulator is also not seen as having been effective in thwarting monopoly creation in city gas distribution.
Government of India approves ₹197.44 billion National Green Hydrogen Mission
Government of India on January 4 approved the National Green Hydrogen Mission, which is aimed at making India the global hub for the production of green hydrogen. The total outlay for the mission is ₹197.44 billion, out of which the government has allocated ₹174.90 billion for the SIGHT programme, ₹14.66 billion for the upcoming pilot projects, ₹4 billion for R&D, and ₹3.88 billion towards other mission components. “The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved National Green Hydrogen Mission,” Union Minister Anurag Thakur said while briefing reporters about the Cabinet decisions. The National Hydrogen Mission was launched on August 15, 2021, with a view to cutting down carbon emissions and increasing the use of renewable sources of energy. The Ministry of New and Renewable Energy (MNRE) will formulate the scheme guidelines for implementation. The mission seeks to promote the development of green hydrogen production capacity of at least 5 MMT (Million Metric Tonnes) per annum with an associated renewable energy capacity addition of about 125 GW in the country by 2030. It envisages an investment of over ₹8000 billion and creation of over 6,00,000 jobs by 2030. It will also result in a cumulative reduction in fossil fuel imports of over ₹1000 billion and abatement of nearly 50 MMT of annual greenhouse gas emissions by 2030. The mission will have wide-ranging benefits — creation of export opportunities for green hydrogen and its derivatives; decarbonisation of industrial, mobility and energy sectors; reduction in dependence on imported fossil fuels and feedstock; development of indigenous manufacturing capabilities; creation of employment opportunities; and development of cutting-edge technologies, an official statement said. The mission will facilitate demand creation, production, utilisation and export of green hydrogen. Under the Strategic Interventions for Green Hydrogen Transition Programme (SIGHT), two distinct financial incentive mechanisms — targeting domestic manufacturing of electrolysers and production of green hydrogen — will be provided under the mission. The mission will also support pilot projects in emerging end-use sectors and production pathways. Regions capable of supporting large-scale production and/or utilisation of hydrogen will be identified and developed as Green Hydrogen Hubs, the Minister added. An enabling policy framework will be developed to support establishment of the green hydrogen ecosystem. A robust standards and regulations framework will be also developed.