Clean Energy: Where India Stands In The Global Coal Gasification Market
The Union Ministry of Coal (MoC) has allowed concession of 50 per cent in revenue share for coal gasification. This was stated by Union Minister of Coal, Mines and Parliamentary Affairs Pralhad Joshi while speaking at an Investor's Meet on 'Coal Gasification - Way Forward' in Mumbai organised by Coal India and FICCI.
What is gasification?
Gasification is a general term for various processes that convert any carbon containing material such as coal into Synthesis gas (Syngas) by reacting them with air/oxygen and steam at elevated temperatures.
Syngas is primarily made up of carbon monoxide (CO) and hydrogen (H2) and small amounts of methane (CH4).
Gasification process breaks carbon based materials down to the molecular level, so impurities can be relatively easily and inexpensively removed.
Syngas can be used to produce Gaseous Fuels such as Hydrogen, Substitute Natural Gas (SNG or Methane), Di-Methyl Ether (DME), Liquid Fuels such as Methanol, Ethanol, Synthetic diesel and Petrochemicals like Methanol derivatives, Olefins, Propylene; nitrogenous fertilisers including Ammonia, and other industrial Chemicals.
Syngas can be used in Integrated Gasification Combined Cycle (IGCC) systems for efficient and clean generation of electric power.
Environmentally benign: Coal gasification offers a practical means of utilising coal for meeting stringent environmental control requirements.
Gasification plants produce significantly low quantities of air pollutants. The Sulphur present in the coal is converted to Hydrogen Sulphide (H2S) and minor amounts of Carbonyl Sulphide (COS), which can be easily and economically removed from gas streams by a wide variety of commercially available processes.
Nitrogen Oxides (NOx) are not formed to any appreciable extent in the reducing atmosphere of coal gasification. The particulate content in the fuel gas after gasification is negligible since the gas cleaning steps capture almost all the particulate.
Gasification plants use significantly less water than traditional coal-based power generation and can be designed to fully recycle the process water, discharging none into the surrounding environment.
Gasification offers the lowest cost option for capturing CO2. Carbon conversion efficiency of as high as 99 per cent can be attained in the gasification process.
Need for coal gasification: With 344 billion tons (BT) of coal resources including 163 BT of proved reserves, India has the fourth largest reserves of coal in the world.
The total world proved reserves of coal are 1074 BT and India accounts for around 10 per cent of the global reserves. The US have the largest coal reserves, followed by Australia and China.
The above statistics make it evident that India has huge reserves of coal. Therefore, it would be beneficial for India if it finds a sustainable way of using these reserves as the world including India is gradually transitioning away from coal toward cleaner fuels in the wake of climate change.
The use of domestic coal reserves becomes even more important, especially when India does not have other sources of fuel - crude oil and natural gas, 82 per cent and 45 per cent of the requirement of those fuels are met through imports. This exposes India to the vagaries of price volatility and supply insecurity.
India will continue to depend on coal for its future energy needs at least till 2050, as per several reports. Since coal has to be used for the coming two to three decades, there is an urgent need to make use of coal as green as possible; otherwise, this resource would remain buried under the ground as the transition towards cleaner fuels accelerates.
First mover advantage: Natural resources hold significant potential to contribute to the development of an economy. Optimal utilisation of indigenous natural resources is critical for long term economic growth and competitive advantages.
Timely exploitation of natural resources has helped countries in creating long term economic drivers. Shale gas revolution in the US is the best example to elucidate this point.
China’s attempt at monetising indigenous coal resources to meet energy, chemical and petrochemical demands is another major example. It is the only country in the world, where large-scale coal gasification related industries play a significant role in economic development.
Around 70 per cent of China’s methanol is produced from coal. China now is the largest producing country in the world, representing 54 per cent of world’s methanol capacity (~80MTPA) and 48 per cent of world methanol production in 2018. Similarly, China produces more than 90 per cent of its ammonia through coal gasification.
Clearly, there is a strong potential for India to emerge as a market leader in chemical and petrochemical supply using coal gasification.
Global experience: Gasification technology is now marching towards maturity with a history that dates back to the 1800s. The first patent was granted to LURGI GmbH in Germany in the year 1887.
In 1940, commercial coal gasification was used to provide “town gas” for streetlights in both Europe and the United States. Since then, many coal gasification plants have come up in the world for the downstream production of chemicals like methanol, ammonia etc. and combined cycle power generation.
Global coal gasification market is expected to reach around 389,825 MW by 2026, growing at a CAGR of approximately 10.8 per cent. Fertiliser segment is anticipated to hold the major market share, primarily driven by Ammonia production by coal gasification.
Power generation is another segment with a good growth rate, averaging above 10.5 per cent. The growing trend of IGCC power plants worldwide has increased the opportunities.
The gasification market is dominated by the Asia Pacific region, and China has been the success story with highest market share in 2017. Other countries, such as India and Japan, are also promising markets for coal gasification.
Where India stands: In the past, a number of efforts have been made to gasify coal in India. These efforts started in the 1960s and are continuing even now with varying capacities/scales.
Fertiliser plant at Sindri used to gasify coal for production of fertiliser in the 1960s (now closed). Jindal Steel and Power Limited (JSPL) in its Angul plant is operating a gas based DRI plant with domestic coal.
Most of them are aiming for self-reliance for India by using high ash domestic coal with end products like fertiliser (urea), power generation and methanol.
Recently, coal gasification has gained momentum with a series of key events and government initiatives. A brief look at them:
National Coal Gasification Mission: India aims for 100 million tonnes (MT) coal gasification by 2030 with investments worth over Rs 4 lakh crore. In order to create awareness among all stakeholders and to prepare an implementable road map with specific responsibilities, the Ministry of Coal has decided to set up the National Coal Gasification Mission.
The Mission is created with an aim to take up the following objectives:
What is the significance of policy change: A number of efforts have been taken to provide support to the private sector and public sector for setting up of coal gasification plants. This includes a policy for concessions of 50 per cent in revenue share for commercial auction of coal blocks.
If the successful bidder consumes the coal produced either in its own plant(s) or plant of its holding, subsidiary, affiliate, associate for coal gasification or liquefaction or sells the coal for coal gasification or liquefaction on an yearly basis, subject to conditions that at least 10 per cent of scheduled coal production as per approved mining plan for that year shall be consumed or sold for gasification or liquefaction, then the bidder can avail of concessions.
Further, all coal companies have appointed nodal officers for taking up coal gasification projects in their company. However, due to dependence on foreign licensors for technology and competition from other feed stock such as natural gas, there is a need to provide incentives and policy support to companies for taking up coal gasification projects.
As you are no doubt aware, Swarajya is a media product that is directly dependent on support from its readers in the form of subscriptions. We do not have the muscle and backing of a large media conglomerate nor are we playing for the large advertisement sweep-stake.
Our business model is you and your subscription. And in challenging times like these, we need your support now more than ever.
We deliver over 10 - 15 high quality articles with expert insights and views. From 7AM in the morning to 10PM late night we operate to ensure you, the reader, get to see what is just right.
Becoming a Patron or a subscriber for as little as Rs 1200/year is the best way you can support our efforts.