Centre for Fuel Studies and Research
Forum of Indian Regulators
Role of Natural Gas in the Emerging Energy Scenario
May 2013
1
Preamble
 Three Key Issues
 Continued Growth at 8 to 9%
 Energy Security
 Sustainability
 Paradigm Shift in Approach
 What role NG should play
o
Supply Constraints
o
Efficiency

Economy and CO2 Emission
o
Priority to divert to desirable sectors
o
Roadmap
 Prepared to take unpleasant decisions
2
Enhance Domestic Production
 Maximize E&P Activities
 25% present to 75% by 2015 and 100% by 2030!!
 E&P Efforts for Crude Oil / Natural Gas same
 Key Issues
 International and Private Sector participation
o
Risk Capital
o
Technology

o
Big and Small Companies
Price Benchmark and Risk Capital
 Short and long term supply options
 Imports, Coal as source of complete sol. 3
Plan for Infrastructure & Markets
 Logistics, Natural Monopoly
 From Source to Consumer
 Transmission  Distribution
 Natural Gas Ideal Fuel for all markets
 Energy – all application
 Fossil Fuel interchangeable
o Availability /economics
 Feedstock
o Fertilizer, Petrochemicals
 Exporting & Importing Countries
 Pricing Mechanism
 Transit fuel to low CO2 era
 How?
4
Sustainability
5
Sustainability
Distributed Power Generation (DPG)
6
Sustainability
7
Supply Options
 Domestic Availability Conventional/Shale Gas
 130 MMM3/day domestic
 30 MMM3/day imports
 Domestic Options (Conventional and Non-Conventional)
 ≈400 MMM3/day
 Rigorous E&P Activities
 R&D Efforts for non-conventional sources
 Imports (Short term to medium term)
 Present World Trade
 ME, Africa, SE Asia, Israel, Russia & CIS Countries
o World Trade: 3000 MMM3/day (Pipeline & LNG)
 No. of actions on hand
o
o
o
o
GAIL tie-up supplies
Petronet LNG
TAPI Pipeline
SAGE Initiative
8
Projected Energy Requirements
•Based on 8% GDP Growth
Year
Hydro
Nuclear
Coal
Oil
N.G.
TPCES
2010-11
12
17
257
166
44
496
Present *
9.2
4.9
293
206
54
567
2021-22
23
45
464
278
97
907
2031-32
35
98
835
486
197
1651
Per capita
consumptio
n in 2032
(Kgoe)
24
67
569
331
134
1.124
In 2004
(Kgoe)
6.5
4.6
157
111
27
0.306
Ratio
2032/2004
3.7
14.6
3.6
2.9
5.2
3.7
*Source: Energy Statistics 2012
•Source: Integrated Energy Planning Report – Planning Commission of India 2006
9
Compelling Reasons to increase Role of NG
 Why increased role of Natural Gas?
 Compelling Reasons
o
o
o
Sustainability

Environment

Efficiency

CO2 emission
Worldwide Availability

India well placed

ME, Africa, CIS countries, Israel
India’s exploration potential
 Conventional / Non-conventional
o
o
World average 25%

IEP Report availability based(480 mmm3/day)

Target at least 25%
Long Term Options
10
Revised Projections
Fossil Fuel Future (2032 Scenario)
MTOE
%
 Coal
835
55
 Oil
486
32
 NG
197
13
1518
100%
%
75
25
100%
• IEP Report ≈ 480 MMM3/day by 2030
• Assume even if 1100 MM3/day
• Imports ≈ 600 MMM3/day, GAIL/Petronet LNG
tying up supplies
• New LNG Terminal / Every year !!
• Strengthen efforts for Non-Conventional Sources 11
Present Utilization Pattern
12
Paradigm Shift
 Revisit Utilization Pattern
 Key Issues
o
Efficiency / Sustainability
 Power Generation
o
Increasing NG Imports – Utility Stations
economical?
 Fertilizer
o
Increasing Subsidy
o
OMIFCO Model (Offshore)
o
Coal as option
 Others
o
Petroleum Product Replacement – Not an issue
o
Transport – limited option
o
CCHP mode
13
Paradigm Shift
 Total Energy Efficiency
28-43%
15% (of 32-56%)
14
Combined Cycle Power Plant
Exhaust
15%
Steam Turbine
Power 15%
Power 31%
Sump 39%
Natural Gas
100%
Energy Utilized: 45%- 50%
Energy Lost: 50%- 55%
15
Combined Cooling, Heating & Power
Mechanical
Output
[40%]
Gas- 100%
Thermal
Output
[60%]
Electrical Output
[39%]
Exhaust Gas [23%]
Temp ~ 450ºC
HT Circuit [14%]
Temp- 85- 90ºC
Electricity
Waste heat for Steam and
cooling
Over all Eff . 85%
LT Circ uit [9%]
Temp ~ 55ºC
Generator Losses [1%]
Exhaust Gas lost [5%]
Cooling Circuit Losses [4%]
Radiation Losses [5%]
16
•DE share as % of total power generation
•0
•India
•France
•Brazil
•Mexico
•UK
•WORLD
•US
•Portugal
•Chile
•China
•Canada
•Germany
•Russia
•Finland
•Netherlands
•Denmark
DPG Worldwide
•60
•50
•40
•30
•20
•10
17
Paradigm Shift
 Revisit Utilization Pattern
 Distributed Power Generation
o

Industry & Commerce (I&C)

CCHP Mode

Basis of comparison

85% Efficiency

Reduction in CO2 Emission

Avoided T&D Losses

Avoided Capex for T&D expansion

Total Energy Efficiency
Incentivise efficiency
 50% plus reduction in CO2 – No additional
cost to Economy
18
Paradigm Shift
 Revisit Utilization Pattern
 Use of NG for Industry & Commerce (I&C)
o
Total power to I&C
o
o
40% of total generation
Expected requirement: 2030

≈300,000 MW

≈1300 MMM3/day
 Other requirement (Petroleum product
replacement)
o ≈ 20% of the above

260 MMM3/day
19
National Gas Grid
Seamless Development
 Large and Lumpy Investment
 Huge Cost of Stranded Investments
 Distributed Power Generation (CCHP Mode)
 Anchor Load
 Load Distribution Zone
 Cities with 10 lakh+ population
 Include Industrial Centers around the City
 Petroleum Product Replacement
o Domestic
o Generators
o Fuel Oil
o CNG Transport
 Expected 80 LDZs around the country
 Each LDZ ≈ 2 to 3 MMM3/day Anchor Load
 NG Grid in next 5 to 7 years possible
 Connect supplies to LDZs
 GAIL and then unbundle? – BG Model
 Revisit NG Price, India hub
20
Institutional Requirement
 Role of PNGRB
 Preparation of National Gas Plan
o
PSUs, Expertise drawn from Private Sector
o
Open Access Tariff
 Dedicated Technical Group
o
Market Survey  LDZ, economics
o
Railways
o
Grid Plan and execution
o
LDZ Distribution network

State level support
 Redefine CGD’s  Bids to be based on supplies
21
Other Issues
 DPG  Electricity Act of 2003 Not an issue
 Entry Barriers
 Level Playing Fields
o
Duty Structure – Mega Vs. Macro
 Awareness
o
Technology
 Electricity Duties, Back-up charges
 CDM Credits – State Support (aggregate)
 Acceptance and Support from State Electricity Boards
22
Longer Term Perspective
 Security of Supplies
 Short term supply options
 Intensify domestic supplies / capture imports
 Long term supply options
 Coal as Total Energy Solution
o
Validate Coal Reserves
 Gas Hydrates
o
Potential
o
Japan Example
o
R&D Efforts
 Coal gasification
o
Coal  Syngas  Methane Syngas to liquids
o
Catalytic Conversion to Methane
o
Coal Syngas to power, Chemicals, Fertilizers
23
Summary
 Domestic – Enhancing E&P Activities
 Conventional and Shale Gas
 TOR-I
 Treat Oil/Gas alike
 NG Benchmark to International Price
o
Japan LNG less LNG Liq./Transport
 Other Non-Conventional
o
Coal Reserves
o
R&D efforts / Long term

Can be source of all fuel even H2 Eventually

Coal Gasification

Coal to NG (Catalytic)

Underground Coal Gasification
•
o
Technology to suit India
Coal Total Energy Solution
24
Summary
 National Gas Grid – next 5 to 7 years
 Paradigm Shift
o DPG, LDZ
o Transit Fuel
 Supplies
o E&P Efforts
o Short, Medium Term
 Tie-up imports
o Non-conventional  R&D Efforts
 BG Model
 Role of PNGRB
 Grid, Market, Supplies
 Huge Task
 Mindset and Political Will
 Can we tell the Truth?
25
1928
2004
Upasala Glacier, South American
Andes, Argentina
Thank You
26
CCHP in Gujarat – actual example
Natural Gas as
Fuel
•PowerPlant
PlantEngine
Engine
Power
Electricity
Water
Hot flue gases having
temperature around 400 c
Waste Heat Recovery
Boiler
Steam
Heat Exchanger
Hot Water
27
CCHP in Gujarat – actual example
Form of Energy
EFFICIENCY ON FUEL
Electrical Power
36%
Steam Generation
from Exhaust Gases
26%
Hot Water from
Jacket/Lube oil
Cooling
22%
Capacity
: 3 MW
Capital Cost
: 2Rs. 7.91 crores
Payback Period
: < 3 Years
28
Regional Demand Distribution
North
Eastern
Market
Northern
Market
Delhi
Market
region
North
Constituent states
Uttar Pradesh, Uttaranchal, J&K, Haryana,
Punjab, Delhi, Himachal Pradesh,
Rajasthan
East
West Bengal, Bihar, Jharkhand, Orissa
West
Maharashtra, Gujarat, Goa
Vijaipur
Central
•Dahej
Market
Haldia
•Mumbai
Western
Market
Eastern
Hyderabad
Southern
Market
B’lore
M’lore
Kochi
Kakinada
Markets
North
East
South
Central
Assam, Arunachal Pradesh, Manipur,
Meghalaya, Nagaland, Tripura, Mizoram,
Sikkim
Tamil Nadu, Kerala, Karnataka, Andhra
Pradesh
Madhya Pradesh, Chhattisgarh

Western region contributes ~ 50% to the
overall natural gas consumption in India

Markets in the Northern and the Southern
regions consume ~25% and ~15% of the
total gas consumption respectively

Insignificant level of consumption in Eastern,
North Eastern and Central Markets at present
29
Chennai
Tuticorin