Natural Gas: The ‘Next Stop’ on India’s Energy Transition Path
26 May 2023
A review of “The Next Stop: Natural Gas and India’s Journey to a Clean Energy Future,” edited by Vikram Singh Mehta. The book presents natural gas as an ideal option for India on its path to a clean energy transition. It highlights uniquely Indian complexities of implementing a large-scale energy transition and outlines current trends in the global natural gas economy.
Natural gas presents a viable option for fulfilling the word’s quest towards a clean energy transition. Often characterized as a bridge fuel, natural gas is purported to provide options to immediately phase out coal and oil. Along with allowing short term emissions reduction, natural gas allows a buffer period towards a larger transition toward renewables. The world’s top emitters of Green House Gases including the United States of America, China, India and the European Union are increasingly switching from coal to gas as they try to prioritise a sustainable future.
The Next Stop: Natural Gas and India's Journey to a Clean Energy Future delves into India’s energy landscape and explores the pathways through which natural gas can usher in a clean energy transition. It covers topics such as oil and gas politics, climate change, energy security and the role of technology in shaping the future of India’s energy security.
India has pledged to achieve Net-Zero Emissions by 2070. This pledge has been supplemented by its decision to increase non-fossil fuel energy capacity to 500 Giga watts (GW) by 2030 and meet 50% of its energy needs through renewable sources. At the same time, the International Energy Agency (IEA) in its report – India 2020: Energy Policy Review, states that India’s energy demand will increase by 100% by 2040. Consequently, the existing energy mix may fail to sustain the rapidly growing economy. An urgent shift towards cleaner energy is the need of the hour. The book raises questions on the feasibility of implementing such a large-scale transition. It notes the processes that can facilitate a transition to clean energy are complex and expensive.
Natural Gas and India’s Energy Quadrilemma
The book’s introduction briefly lays down a roadmap for India to implement a clean energy transition. The author advocates that the ‘Next Stop’ should include a greater integration of natural gas into India’s existing energy mix. The chapter titled The Green Fossil sheds light on India’s unique predicaments with respect to arriving at the next stop.India faces an “Energy Quadrilemma” and has to engage in a complex pursuit of balancing amongst four competing priorities - energy security and energy equality with environmental sustainability and affordability, with the fourth (affordability) being endemic to India.
The role played by natural gas in India’s electricity generation is relatively small. Compared to the global average of around 22 percent, India's share of gas-based power has only been around 3.5%. The book recommends an assimilation of natural gas to facilitate a sustainable transition to clean energy.
Obstacles on the road to the Next Stop
‘Why Gas?’, the second section, offers a critique on India’s policy regulations concerning natural gas. The lack of a clear roadmap, adequate infrastructure and financial assistance are attributed as the primary impediments. Moreover, projected future energy demands can only be met through a complete re-engineering of existing energy infrastructure at both the production and consumption level.
In Chapter 7, the writer elaborates upon the lack of infrastructure as a major hindrance to greater natural gas use in India. Meanwhile, the Central Electrical Authority estimates the cost of acquiring Transmission System for Integration of over 500 GW Renewable Energy (RE) Capacity by 2030 to be ₹2.44 trillion. A country like India would have to remove several obstacles to widely integrate natural gas into its energy mix.
Examples have been mentioned to shed light on India’s policy successes and failures in steering its natural gas sector towards achieving energy and climate goals. Structural changes that have had positive effects on energy security have been discussed in Chapter 4. The use of Floating Storage and Regasification Units has purportedly facilitated more flexible and cost-effective LNG import without the need for sizable infrastructure investments. This in turn has contributed to the 'democratisation' of LNG. Apart from this, technology has played a key role in increasing natural gas production along with lowering costs. Having said that, the use of LNG as a fuel is still in its nascent stages, and significant fuelling infrastructure is needed to make it more widely available.
The lack of allocation for domestic gas has been highlighted as a major obstacle to gas-based generation in India. Moreover, gas power plants limited competitiveness in the "merit order" in comparison to other sources have also been highlighted as an impediment. Chapter 11 explores the governance failures behind the Non-performing Gas Power Plants. These hurdles have also impacted important international collaborations. India’s attempted collaboration with South Korea to build an LNG Ship was abandoned due to financial irregularities. In contrast, China has been able to capitalize on construction of LNG vessels using carefully formulated Transfer of Technology mechanisms and holistic training of its human resources.
Rapid urbanization and increase in population demand sustainable and clean fuel. The unique qualities of gas-based power, such as ramping and peaking abilities and cleanliness, can set it apart from predominant fossil fuels. The World Health Organisation reports that India is home to nine out of the ten cities with the world's worst ambient air quality. Air quality will continue to deteriorate if the current energy consumption patterns are not altered.
Chapter 23 discusses the successful regulatory interventions in India’s natural gas economy. The transition of New Delhi’s public transport to CNG has been named as a success story. Timely intervention and financial incentivisation such as encouraging energy efficient LED bulbs and creation of market for rooftop solar showcase a positive direction of policy change.
The fifth section on ‘Regulation and Sustainability’, critically assesses the regulations intended to integrate natural gas into India's current fossil fuel-intensive energy mix. Sudha Mahalingam, former-member, Petroleum and Natural Gas Regulatory Board (PNGRB) writes about the privatization of natural gas pipelines. A national pipeline policy was established to guarantee that all future pipelines would have 33% open access capacity that could be utilised by third-party shippers.
The PNGRB, set up in 2007, was conferred with regulatory power to issue licenses to build, expand and operate natural gas pipelines and City Gas Distribution (CGD) networks. The implementation of the Act has been criticised as having several loopholes, with the bidding process marred by irregularities and political interference. According to the Petroleum Planning & Analysis Cell, only 43 of the 228 CGD networks authorised by the PNGRB to date have been commissioned.
The book consists of expert recommendations such as exploring the possibility of reviving abandoned gas-based power plants and bringing natural gas under the ambit of the Goods and Services Tax. Chapter 13 suggests that the implementation of CGD projects can significantly reduce localised pollution in urban areas as well as the overall amount of carbon emissions. While PNG can be used in domestic kitchens as well as industrial and commercial facilities, CNG can replace other polluting transport fuels.
Decarbonization along with policy intervention and financial incentivisation is critical to India’s energy transition. Decarbonization measures include de-incentivisation of carbon emitting industries by levying carbon taxes and providing subsidies to industries switching to cleaner energy. Chapter 24 – Decarbonisation: Model for Sharpening the Trajectory informs the readers about the different policy measures taken by India to decarbonize its economy. These include the Perform Achieve Trade Mechanism, Renewable Purchase Obligations and the National Clean Air Programme. India has also introduced The Energy Conservation (Amendment) Bill 2022. The Amendment introduces innovative concepts like carbon trading and necessitates certain consumers to use non-fossil fuels to speed up decarbonization and achieve sustainable development goals.
A roadmap for energy transition
In the coming decade, there will be more space available for gas-fired power generation due to the expanding demand for electricity and the gradual retirement of oil and coal-fired capacity. By 2030, natural gas is expected to surpass coal to become the world’s second-largest source of energy after oil, growing at an average rate of 1.4% through 2040, according to the IEA World Energy Outlook. India’s import dependency based on consumption for natural gas is 46.3% in Financial Year 2022-23. Hence, it is imperative for India to be cognizant of these changing trends to secure its energy requirements.
It took 40 years for the incandescent bulb to reach every household in Manhattan after its invention by Thomas Edison. The shift from prevalent norm is a time-consuming and complex process. This book acknowledges this fact and lays down a detailed roadmap for the transition to cleaner energy. This highly recommended book will equip the reader with historical, industrial, technical, and political facets of energy transition. Overall, the book is very insightful and content-rich, which is understandable given that the authors are subject-matter experts with deep knowledge of the industry.
Disclaimer:The article expresses the author’s views on the matter and do not reflect the opinions and beliefs of any institution they belong to or of Trivium Think Tank and the StraTechos website.
Vishal holds an MA in Geopolitics and International Relations from DGIR, MAHE. He is currently employed as an open-source intelligence analyst. His areas of interest include national security and the geopolitics of Af-Pak region. He applies his knowledge and insights to assess geopolitical developments and their impact on international relations.
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