From CNG to hydrogen, Delhi’s journey towards becoming city with clean air
On Tuesday, Delhi will become the first city in the country to roll out buses run on hydrogen-enriched CNG (HCNG), a fuel cleaner than CNG. However, HCNG is only an “interim” technology and the aim is to finally have hydrogen-run buses in the capital. A four-tonne-per-day compact reformer-based HCNG production plant will be inaugurated at the Rajghat-I bus depot of Delhi Transport Corporation (DTC) on Tuesday by Union minister for petroleum and natural gas Dharmendra Pradhan and Delhi transport minister Kailash Gahlot. From Tuesday itself, 50 buses running on HCNG will hit the capital’s roads. The buses will be run for six months as part of a pilot project. After the trial period, a detailed performance report will be compiled incorporating the fuel economy and the emissions data of the trial buses run with CNG and HCNG fuel mixtures. The report will be submitted to the Supreme Court and Environment Pollution (Prevention and Control) Authority. The apex court had earlier suggested that Delhi could “leapfrog” from the CNG-run to the Hydrogen-run buses instead of procuring electric buses as a solution for Delhi-NCR’s poor air quality. While the technology will take some time to appear in the capital, HCNG will be a step in that direction, even as Delhi government plans to gradually replace its fleet of CNG-run public transport buses with electric buses. The hydrogen fuel cell technology is one of the most efficient and only produces water and heat instead of emissions, making it the cleanest. These buses use hydrogen fuel cells that function like a battery but do not need to be charged. The buses have been developed by Tata Motors and Indian Space Research Organisation, but are not easily available in the market yet. While a source in Delhi government said the possibilities were being explored, HCNG would help the city achieve reduction in emissions. It can be used in engines of the existing public transport buses in Delhi without any major modification. Also, re-fuelling of HCNG blends in vehicles can be achieved with minimum modifications in the CNG infrastructure. The apex court had said hydrogen buses were running successfully in other countries and their procurement might not be a problem as the Tata group has started manufacturing these vehicles in India. Delhi government officials, however, said creating a fleet of purely hydrogen-run buses would take some time while it just needs to modify existing CNG-run buses for adopting HCNG. Delhi government is also looking at inducting 2,000 electric buses in Delhi’s public transport fleet by the end of 2021. In August, transport minister Gahlot had spoken to R K Singh, Union minister of state (independent charge) for power and new and renewable energy via videoconferencing about installation of charging infrastructure in Delhi-NCR as part of the recently launched electric vehicle policy of the state government. After the meeting, Gahlot said Singh had assured to consider subsidies for 1,000 electric buses in the city under the Centre’s Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME India) Scheme II, which had a Rs 10,000-crore subsidy outlay. Delhi government plans to induct 1,000 electric buses but their delivery schedule got hampered due the Covid-19 outbreak. DTC also plans to induct 1,000 electric buses in its fleet and in a first-of-its-kind public-private partnership under the build-own-operate-transfer (BOOT) model for the corporation, it is going to induct 300 electric buses by selecting an operator for procurement, operation and maintenance of these buses in an 11-year contract. The company will be paid operating cost per kilometre under the operating expenses (OPEX) model. Though DTC had received bids, the tender is yet to be awarded.
Numaligarh Refinery inked pipeline right to use agreement with GAIL
Assam based Numaligarh Refinery Limited (NRL) has inked Pipeline Right to Use (RoU) sharing Agreement with GAIL (India) Limited. Under the agreement, both the companies shall share a common Right to Use (RoU) for laying their respective pipelines for a stretch of 550 Km from Purnia in Bihar to Guwahati in Assam. NRL stated that GAIL is laying its Barauni – Guwahati pipeline (BGPL), which is a part of Jagdishpur – Haldia & Bokaro – Dhamra Natural Gas (NG) Pipeline Project, popularly known as ‘Pradhan Mantri Urja Ganga’ extended up to Guwahati to supply natural gas to pipelines under North East Gas Grid (NEGG). NRL is also laying its 1,630 Km long Paradip Numaligarh Crude Pipeline (PNCPL) crude pipeline, originating from Paradip Port, traversing through the States of Odisha, West Bengal, Jharkhand, Bihar and Assam and terminates at its refinery at Numaligarh (Assam). The pipeline project is part of the mega Integrated Refinery Expansion project from 3MMTPA to 9 MMTPA currently under implementation at a project cost of more than Rs. 22 thousand Crore. The company added both the pipelines share a common pipeline route from Purnia (Bihar) to a place near Guwahati (Assam) for around 550 Km. The sharing of the pipeline RoU shall help in optimisation of land acquisition for pipeline laying. Both the companies shall also be benefited in terms of resource sharing during execution and operation of the respective pipelines. The agreement, a win-win for both the sides was signed by GM (Project) NRL P J Sarma and GM (Projects),GAIL K K Sachdeva in presence of MD NRL S K Barua and CMD GAIL Manoj Jain in presence of Directors of GAIL and senior officials of both the organisations.
‘EVs distant dream, India needs cleaner fuels to combat pollution’
With a massive spike in air pollution in Delhi and its surrounding regions, experts believe that the country needs to incentivise public transport, disincentivise personal vehicular transport and have a basket of cleaner fuels in a bid to mitigate the pollution emanating from the automobile sector. Road transport constitutes a major source of greenhouse gas emissions. In India, the transport sector is the third-most greenhouse gas emitting sector, with the major contribution coming from road transport. Speaking to IANS, Suyash Gupta, Director General of Indian Auto LPG Coalition, stressed on the need to invest in a wide range of alternative options to power the transport sector. “Much like DTC buses in Delhi shifted to cleaner CNG twenty years back, private vehicles need to shift to cleaner alternatives.” He said that the country must ensure that over the next decade, it manages to phase out a significant portion of petrol and diesel-powered vehicles, including two-wheelers, in favour of cleaner and cheaper gaseous fuels such as Auto LPG. Auto LPG, a mix of propane and butane, is a cleaner automotive transport fuel than traditional fuels. The environmentally-friendly and economically-viable fuel can help in better mobility while minimising the impact of transport on human health and the environment. Unfortunately, despite significant price advantage over petrol and diesel and practical benefits, Auto LPG has achieved only marginal success in India, he said. According to Gupta, another way to reduce the pollution is to switch to electric vehicles but it has several ifs and buts. He maintained that a single technology cannot solve the air pollution challenge, especially if the technology is at least 10-15 years away from commercial viability. “The challenge of creating a mammoth network of charging infrastructure is a major one. Until sufficient charging infrastructure is in place, electric vehicles will always be clouded with the issue of range anxiety,” he said. Gupta added that with almost 68 per cent of electricity being thermally produced, the so-called ‘clean’ electric vehicle may not really be as clean. “That is why it is important to invest in a wide range of alternative options to power the transport sector rather than putting all eggs in the electricity basket.” “Electric Vehicles are still a distant future and we cannot just wait for them to become widely usable and continue with the current levels of pollution. We desperately need immediate and near-term solutions to clean up the urban air,” he said. Rupa Nandy, Head of International Association of Public Transport (UITP), meanwhile, contended that a clean and green traffic jam would still be a traffic jam and hence, the overall focus of city and state authorities should be to strengthen and augment public transport and promote it as much as possible. “The government should also work on disincentivising personal vehicular modes of transport. Better walking and cycling infrastructure is also required to reduce dependency on personal transport. The government should also work on making the last mile connectivity of public transport better to make journeys seamless,” she added.
Bharat Petroleum tries to cut dependence on LPG from the Middle East
An Indian buyer of liquefied petroleum gas is once again attempting to ease its dependence on Middle East shipments after some supply shocks last year stemming from drone attacks and even a trade war. Bharat Petroleum Corp. is seeking bids from global suppliers for a fifth of its typical LPG needs in 2021, according to a tender seen by Bloomberg. Bidding is still open to Middle East producers, which already provide BPCL with the majority of its contracted needs. India’s second-biggest fuel retailer made an attempt to broaden its sources of supply earlier this year but the tender wasn’t awarded due to a lack of attractive offers, said traders. The latest tender is aimed at getting better prices for supplies compared with those from the Middle East and to diversify sources of LPG, according to the objectives listed in the document. India’s fuel retailers get most of their LPG — typically used for cooking — from Saudi Arabia, Qatar, the U.A.E. and Kuwait, leaving them exposed to price fluctuations and supply shocks. This was highlighted by drone attacks on Saudi Arabian processing facilities and fields, which happened just before India’s festival season, followed by curbed output from the Middle East as OPEC tried to manage the virus-driven oil supply glut. India also faced more competition for Persian Gulf LPG amid the trade war between Washington and Beijing as China stopped importing from the US, its main supplier. “It’s a logical move,” said Jeslyn Chua, an analyst at industry consultant FGE, adding that almost all of India’s LPG imports in August and September were from the Middle East. If tensions between the US and China escalate into another trade war, diversifying supply will be beneficial, she said. The Middle East, however, still has the advantage of being the closest major producer to India. Other options for BPCL could include Europe and the US, although both alternatives face the additional cost of longer shipping times. BPCL is seeking bids for about 800,000 tons of LPG in 2021, a fifth of its annual import requirement of about 4 million tons. To reduce freight costs, BPCL will consider taking responsibility for shipping if cargoes are sold free-on-board from the Arab Gulf region, unlike its tender earlier this year, which required the seller to deliver cargoes to India. Offers are to be based on a premium or discount to Saudi contracted prices published every month. LPG has defied a broader demand slump for oil products in India, benefiting from authorities stocking up on supplies for lower-income people and as families spent more time cooking at home amid the world’s biggest lockdown. Imports of the fuel are expected to climb to 16.6 million tons next year, from 16 million in 2020, according to FGE’s Chua.
India’s diesel sales rise above pre-COVID-19 levels in October – Industry data
India’s diesel consumption rose 8.8% in the first half of this month from a year ago, its first annual increase since March, when the nation imposed lockdown restrictions to curb the spread of COVID-19, preliminary industry data showed. Diesel sales, which accounts for roughly two-fifths of refined fuel demand in the country, totalled 2.65 million tonnes, showed the preliminary data compiled by Indian Oil Corp , the country’s top refiner and fuel retailer. Petrol sales during Oct. 1-15 rose 1.5% from a year earlier to 982,000 tonnes, the data showed.
Torrent Gas plans IPO by FY24; eyes acquisitions in CGD business
Ahmedabad headquartered-Torrent Group aims to hit the capital market with the initial public offer of its gas utility business, Torrent Gas, by 2023-24, a top executive told ET. Torrent Gas, which could be the third listed company of the group, is investing Rs 8,000 crore on expansion of its city gas distribution (CGD) business. It is scaling up its compressed natural gas (CNG), and piped natural gas (PNG) businesses and is also looking for acquisitions in the sector, over and above this investment. “Our aim is to go for value unlocking after we have reached a certain critical scale. We are fairly well capitalised and there is no urgency, so we want to time it to unlock better value. We would look at raising capital by FY23-24,” said Jinal Mehta, director, Torrent Gas. Mehta said that the company has set a target of annual revenue of Rs 2,000 crore- Rs 3,000 crore, which will be the “critical scale” for an IPO. Currently, the company clocks revenue of around Rs 25 crore a month but expects it to double to Rs 50 crore by end of the year as it has recently added 42 compressed natural gas (CNG) stations, making the total number of stations it runs 100. Torrent Gas is in the process of completing a Rs 8,000 crore investment in the next five years in CGD infrastructure; of this Rs 1,050 has already been invested. “Despite the constraints presented by the Covid-19 pandemic, Torrent Gas has been able to set up 100 CNG stations within a relatively short span of time. We are now working towards our near-term goal of setting up 200 CNG stations by March 2021 and medium-term goal of setting up 500 CNG stations by March 2023, apart from making PNG widely available to industries and residences in our authorised areas,” Mehta said. The Indian government has been undertaking policy reforms to lure investors into the sector to achieve its goal to be a gas-based economy. Currently, gas accounts for a little over 6 per cent of India’s energy mix, and the government aims to scale it up to 15 per cent by 2030, closer to the global average of 24 per cent.
IEA says oil producers may struggle to gauge demand amid second wave
Global oil stocks which rose during the height of the pandemic are being steadily reduced, the International Energy Agency (IEA) said on Wednesday, but a second wave is slowing demand and will complicate efforts by producers to balance the market. OPEC+ producers – OPEC members and others including Russia – plan to boost supply by 2 million barrels per day (bpd) from January and the IEA predicts a ceasefire in Libya will raise output there to 700,000 bpd in December from 300,000 bpd currently. “There is only limited headroom for the market to absorb extra supply in the next few months,” the IEA said in its monthly report. “Those wishing to bring about a tighter oil market are looking at a moving target.” OPEC+ producers are currently cutting output by 7.7 million bpd. The IEA said “the efforts of the producers have shown some success”, noting relatively stable oil prices and a strong draw on storage, with implied global stocks falling by 2.3 million bpd in the third quarter and by a predicted 4.1 million bpd in the fourth. However, the agency added that a demand rebound over the summer was now slowing due to a second wave of coronavirus cases and new movement restrictions. “This surely raises doubts about the robustness of the anticipated economic recovery and thus the prospects for oil demand growth,” the IEA said.
Refiners crank up runs ahead of India’s festive boost to demand
Indian oil refiners that have cranked up processing rates in response to a rebound in fuel demand have a seasonal boost to look forward to that not even a rapidly spreading virus is expected to derail. The nation’s two main festivals — Navratri and Diwali — start mid-October and extend for more than a month, typically increasing demand for consumer goods with more diesel-guzzling trucks hitting the road to deliver everything from clothes to refrigerators. This may lead to refiners boosting already elevated crude processing rates further to meet rising fuel consumption. Indian Oil Corp., the nation’s top processor, is currently operating its refineries at an average rate of 86 per cent of capacity, compared with 66.7 per cent in August, said a company official who asked not to be identified as the information isn’t public. Bharat Petroleum Corp. is at more than 85 per cent, while Hindustan Petroleum Corp. is already at full capacity, according to company officials. While China has made strides in containing the pandemic and led the global recovery in fuel demand after lockdowns, India has had far less success in containing the virus with infection rates surging above seven million. However, despite rising cases, people are resuming their daily activities and are even preparing to celebrate the festivities in a big way. “I doubt there is any fear of the virus,” said K. Ravichandran, senior vice-president at credit assessor ICRA Ltd., the local unit of Moody’s Investors Service. “Crowds are thronging beaches and malls. It may not be back to normal, but people are really loosening the purse strings and you can see the pick up in consumption across sectors.” Seasonal Surge Across India, overall crude-processing rates at oil refineries are currently above 85 per cent of capacity and inching toward 90 per cent, up from about 76 per cent in August. Gasoline has so far led an uneven fuel rebound as more people opt for their own cars or scooters over public transport to avoid being infected. Diesel consumption is poised for a much needed boost from the festivities, crop-harvesting activities, as well as stimulus that includes a special interest-free festival advance of up to 10,000 rupees ($136) for each federal government employee.
Price deregulation of natural gas key for success of unified tariff regime
Price deregulation for the complete domestic natural gas sector would be key towards making a unified tariff regime successful and increasing the share of natural gas in the overall energy mix of the country, rating agency ICRA has said. The rating agency said while moving towards a Unified Tariff Regime is a positive step towards increasing the share of natural gas in the overall energy mix of the country, several other steps will have to be implemented till we see a meaningful uptick in natural gas consumption in the country. Some of the reforms that have been long pending include the pricing deregulation of natural gas in the country, inclusion of natural gas under the Goods and Services Tax (GST), development of integrated pipeline network and development of an integrated gas trading hub/exchange are some of the reforms government will have to undertake to make any meaningful impact on natural gas offtake in the country, it said. Some of the other steps that have also remained under consideration include unbundling of the marketing and transmission business of GAIL (India) Limited and an independent system operator for pipelines, the agency added. The downstream regulator, Petroleum and Natural Gas Regulatory Board (PNGRB) has released draft regulations pertaining to implementation of Unified Tariff Regime (UTR) for the natural gas pipelines on September 29, 2020. The draft regulations essentially propose pooling of the existing approved tariffs of the pipelines comprising the National Gas Grid to arrive at one single tariff to be charged across and will be called the Unified Pipeline Tariff. The new regime also does away with the additive nature of the tariff to a large extent wherein earlier a consumer receiving natural gas flowing through multiple pipelines had to pay tariff for all the pipelines leading to the additivity of the tariffs. The draft regulations will remain revenue neutral for the gas pipeline operators although there will be redistribution of the transmission tariffs being paid by the consumers post the implementation of these regulations. The board has sought comments/views from various stakeholders by October 20 and will be holding an open house on October 29 for discussing the same.
North India’s first Compressed biogas plant to go on steam in March
As part of its efforts to mitigate the crisis-like situation arising out of crop residue burning in Punjab and Haryana, the Union government is setting up the first compressed biogas (CBG) plant in north India in Lehragaga of Sangrur and it is expected to be commissioned in March next year. The CBG plant, being set up under the ‘Sustainable Alternative Towards Affordable Transportation (Satat), will convert straw into CNG. Although the plant was initially scheduled to be commissioned in 2020-end, it got delayed following late arrival of machinery due to Covid. According to sources, the plant authorities have started collecting paddy straw to store it at the plant, as 300 tonne stubble will be used per day in the plant to produce 31 tonne CBG per day. The plant is being set up by Verbio India Pvt Ltd. Five more such plants are coming up in Punjab but those may not be commissioned before early 2022. These six plants will have a combined capacity to produce 70 tonne CBG per day by consuming 2.5 LMT paddy straw per annum. Similarly, 64 such plants are coming up in Haryana. “RBI has included CBG in its list of priority sector lending and the SBI has started loan schemes and oil companies have agreed on a buy-back rate of Rs 46/kg for five years… The CBG projects once commissioned will create a market for straw and provide farmers an incentive not to burn the resource,” said former executive director at Indian Oil Corporation (IOC) and currently bio fuels adviser to the company. The first CBG plant in India was set up in September 2019 and many such plants are already operational in Maharashtra, Gujarat and Tamil Nadu. Environmentalist and executive director of Centre for Science and Environment Sunita Narain said, “Degradation of environment through various means including burning of stubble is worrisome. To overcome it, there is a need to provide income to farmers for the residue and improve environmental sustainability. We need to provide machinery to farmers for in-situ management, provide value to biomass as farmers may not burn if they are paid for the straw.”