With the vision of pradhan sevak, Mr Modi, India has been moving toward gas based economy from oil based. India intends to increase the market share of gas as energy from 6% to 15% by 2030.
Apart from being used for cooking at domestic households in the form of Piped Natural Gas(PNG) and a transportation fuel for vehicle in the form of Compressed Natural Gas(CNG), Gas is used as a feedstock in the manufacture of fertilizers, plastics and other commercially important organic chemicals as well as used as a fuel for electricity generation, heating purpose in industrial and commercial units. Implying it is has variety of utilities.
Why is India shifting to gas? Is gas better than oil?
Gas is the most cleanest fossil fuel. It burns around 50% cleaner relative to coal and 30% cleaner relative to oil. It has lower carbon intent and lower impurities. It may be a significant contributor to the reduction in global warming. Given that 6 out of 10 world’s most polluting cities are in India. It will significantly help to reduce the pollution. But most of the companies won’t change only for the sake of global warming. It needs to be cost efficient too. CNG is 30% to 50% cheaper than diesel per litre. The fuel consumption is also better, thus making CNG more cost-efficient. For PNG it varies depending the prices of subsidised LPG though PNG is considered to be more economical.
Further per British Petroleum, “Because of the relative scale of coal versus renewables in today’s power industry, if we were to switch just 1% of total power generation from coal-fired power plants to gas-fired ones, that would cut emissions as much as increasing renewable energy by 11%”
India has currently the gas grid distribution(GGD) of approx 16K kms and the government plans to double the GGD in next four to six years.
Where do the challenges lies?
The challenges lies in the production of the gas. There hasn’t been significant growth in the the domestic production of the natural gas. While at the same time the consumption of gas is rising at 4.2% CAGR(compounded annual growth rate), which in highest in the major developing economies. 52% of the our domestic consumption relies on the imported Liquefied Natural Gas (LNG).
Hoping India will be able to turnaround the production of natural gas.