The Government of India is accelerating the adoption of a gas-based economy, focusing on operationalizing gas-based power plants to meet rising electricity demand during the summer season.
Recent steps taken by the government:
- To ensure maximum power generation from Gas-Based Generating Stations, the Government has issued directions to all Gas-Based Generating Stations under Section 11 of the Electricity Act, 2003.
- Section 11 of the Electricity Act, 2003, allows the government to direct a generating company to operate and maintain a generating station in extraordinary circumstances.
Implementation Framework:
- GRID-INDIA will inform Gas-Based Generating Stations in advance of the days when gas-based power is required.
- GRID-INDIA, a division of the Ministry of Power, Government of India, is responsible for the round-the-clock integrated operation of the Indian Power System.
- Stations holding Power Purchase Agreements (PPAs) must offer their power to PPA holders first, with any surplus offered in the power market.
- Stations without PPAs must directly offer their generation in the power market.
- A high-level committee led by the Chairperson of the Central Electricity Authority will oversee the implementation of these directives.
Other Measures Undertaken:
- Planned maintenance of power plants will be deferred to the monsoon season.
- New capacity additions will be expedited to augment power supply.
- Partial outages of thermal power plants will be minimized.
- Surplus power from Captive Generating Stations will be utilized, and excess power will be offered for sale in the Energy Exchange.
- The government is promoting a gas-based economy for energy security.
What is gas-based economy?
- A gas-based economy is one where gas is the primary source of commercial energy, and natural gas is a major component.
- In 2016, the Government of India (GOI) announced that India would increase the percentage of natural gas in its primary energy basket from 6.14% to 15% by 2030, and become a “gas-based economy”.
Significance of gas-based economy:
- International commitments: India is moving towards a gas-based economy to meet climate action commitments, including achieving net zero by 2070, reducing emissions intensity by 45%, and reducing total carbon emissions by 1 billion metric tonnes by 2030.
- Cost-effective: Natural gas is more cost-effective than petrol and diesel, and has a higher energy output than other fossil fuels.
- Reduce pollution: Natural gas is cleaner and safer than coal and liquid fuels, contributing to improved air quality.
- When burned for power generation, it emits almost 50% less carbon dioxide than other forms like coal.
- Logistics: Natural gas can be easily stored and delivered through pipelines or liquefied and transported by ship.
- Backup to renewables: Natural gas plants can quickly start up and fill the electricity grid gap when renewables aren’t producing enough, serving as a backup to renewables.
- International geopolitics: Trading in natural gas can provide India with more flexibility in international geopolitics.
Challenges related to gas based economy:
- Non-renewable resource: Natural gas is a non-renewable resource that can only be obtained through costly and potentially dangerous drilling.
- Infrastructure: India has inadequate infrastructure to meet its growing energy needs, and the transmission and distribution networks are often ineffective.
- Import dependency: India imports around 45% of its gas, and more than half of its natural gas-based power capacity is idle due to a lack of domestic gas supply.
- High subsidies: The fertilizer sector has the largest share in the overall consumption of natural gas which is highly subsidized.
Government initiatives to promote gas-based economy:
- City gas distribution (CGD) infrastructure: The GOI is developing networks to deliver Piped Natural Gas (PNG) to homes and businesses, and Compressed Natural Gas (CNG) for use in vehicles.
- Unified gas pipeline tariffs: In 2023, the GOI implemented unified gas pipeline tariffs to simplify gas pricing and encourage downstream demand.
- National Gas Grid: It is a long-distance pipeline network that aims to ensure equitable distribution of natural gas across India.
- Sustainable Alternative Towards Affordable Transportation (SATAT): It is an initiative by the Indian government that encourages entrepreneurs to set up Compressed Bio Gas (CBG) plants.
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