Editorial- November 2018

OMCs have invited EoI for supplying compressed biogas (CBG) to their retail outlets from plants processing biomass and waste. The schedule has been announced till Mar 31, 2019. EoIs will be issued every month, it is an ongoing empanelment and the chosen applicant will be informed after an online evaluation process. For implementing this scheme, setting up of 5,000 plants in the private sector at an investment of Rs 1.75 lakh crore in the next five years, is envisaged. This scheme fulfils multiple objectives: it will cut imports in the oil and gas sector, boost rural economy through local employment & alternate sources of income from farm, create an alternate fuel ecosystem and reduce pollution. This is an ambitious scheme tuned to Indian realities, serves energy, environment and employment requirements of the country.

It is an attractive business proposition for the CBG producers. The oil and natural gas minister Dharmendra Pradhan stated that there is 100 per cent offtake guarantee. The base price of Rs 46/kg is more than domestic natural gas price. The cost of setting a CBG plant is considered to be in range of Rs 35 crore and would require a land area of six to ten acres. The Haryana government has signed an MoU with Indian Oil Corporation (IOCL) for setting up CBG plants based on paddy straw and other agri-waste. 200 CBG plants by 2023 are expected to come up in Haryana alone.

Per day consumption of natural gas in the country is 146 mn standard cubic meters of which 56 pc is imported. Mr Pradhan said there is a potential to produce 62 mn tonnes of CBG from wastes and its usage would lift the share of natural gas in the energy basket.

The expansion of CGD and PNG connections to kitchens are ramping up natural gas demand. The quality of CBG is stated to be better than CNG and prices are comparable.

The government is bullish on the alternate fuel strategy. Ethanol procurement by OMCs has increased for blending with petrol. The government is looking at scaling up blending to 10 pc and a procurement of 340 cr litres. IOCL has signed an MoU with Haryana to do an ethanol refinery in Panipat while BPCL will commission an ethanol plant in Odisha. Methanol blend for LPG is under active consideration to reduce cylinder costs and thereby subsidy burden.