Bio fuelling of gas power plants: Opportunity for energy security, climate change mitigation

The Ministry of Power’s recent directive to operate gas-based power plants at maximum capacity from May 1 to June 30, 2024, under Section 11 of the Electricity Act, 2003, to meet surging power demands is unsurprising. Weather forecasts are indicating above-normal daytime and nighttime temperatures, coupled with the ominous spectre of heatwaves during the crucial summer months.

For India, this forecast holds significant implications, especially in the realm of energy demand. With the anticipated rise in temperatures, the country braces itself for a surge in electricity consumption especially due to cooling loads.

The peak electricity demand might reach 260 GW compared to 243 GW last year, as per the Govt.’s prediction. Such a surge explains the swift response from India's power sector to ensure uninterrupted energy supply to its populace during such hot & humid seasons.

In India, there are 62 gas-based plants with a total installed capacity of 24,814 MW, but their share in the electricity generation mix has been declining due to a shortage of or commercially unviable domestic gas.

Consequently, these plants are operating at suboptimal Plant Load Factor (PLF), rendering them stranded assets. Despite a total gas requirement of 115 MMSCMD at 90% PLF, only an average of 13.11 MMSCMD was supplied in 2022-23, representing just 15% of the allocation to power projects. The domestic gas allocation policy assigns priority to the City Gas Distribution (CGD) and fertilizer industries as primary consumers of domestic natural gas, with the power sector receiving non-subsidized gas and lower allocation priority.

However, the power sector's hesitance to explore and adopt alternative, greener options like BioCNG or CBG derived from agricultural and organic residues remains a missed opportunity. These initiatives not only promise cost competitive BioCNG/CBG production but also pave the way for its expanded utilization across power, transportation, and industrial sectors, contingent upon more attractive policy and regulatory frameworks.

1 kg of CNG produces around 6 units (KWh) of electricity, which roughly transcends into ₹11 per unit at the average CNG market rate of ₹66 per KG. Compare that to the highest per unit charge rate in Delhi NCR of ₹8 per unit and one knows why the gas power plants are being underutilized. This requires innovative techno-economic solutions to make electricity generation from BioCNG an attractive proposition.

The Global Green Growth Institute (GGGI), in consultation with key stakeholders including MoPNG, MoP, GAIL, and NTPC, conducted an assessment to enhance the viability of gas-based power stations, particularly in meeting peak load requirements.

Focusing on NTPC's Faridabad Gas Power Station (FGPS), the study explored blending BioCNG with conventional CNG to increase the Plant Load Factor. With 1 kg of BioCNG requiring around 8 kg of paddy straw and costing approximately ₹30, the study found that substituting 100% CNG with bioCNG could result in Energy Charge Rates (ECR) of ₹4.48 per KWh for open cycle operations and ₹3.05 for combined cycle operations, making gas power plants financially viable while meeting peak demand.

The optimization, however, recommends 30% bioCNG blending with commercial CNG for six hours, resulting in an Energy Charge Rate (ECR) of ₹8.36 per KWh, well below the combined cycle's ECR cap of ₹10.00 per KWh. Therefore, gas power plants can effectively meet India's peak demand load while remaining financially sustainable.

NTPC's 7 gas power plants with a total capacity of around 4 GW, require 11,000 TPD or 3.85 MMT/Yr of gas. Approximately, 1MMT/y of this demand can be met using bioCNG from 100 dedicated plants, requiring 10 million tons of feedstock every year, which isn’t high considering that 30 million tons of feedstock were burned last year. Locating these bioCNG plants along the Hazira-Vijaipur-Jagdishpur (HVJ) pipeline in Haryana and Punjab can reduce the transportation costs.

The adoption of BioCNG presents a transformative opportunity for India's energy landscape, offering a sustainable alternative to conventional fuels while addressing pressing environmental and economic challenges. By leveraging the involvement of major industry players like NTPC and sponge iron manufacturers, BioCNG can gain traction, bridging the gap between demand and supply.

Policy reforms, including the incorporation of BioCNG production capex into fixed costs and tariff determination policies, are essential to create a conducive environment for investment and growth. With competitive pricing projected at around ₹30 per kg, BioCNG stands as a cost-effective solution that not only reduces carbon emissions but also generates additional revenue through surplus power sales.

Integration into the national gas grid can open avenues for carbon trading benefits, further incentivizing industrial adoption, and contributing to India’s carbon reduction efforts. Moreover, the utilization of BioCNG promotes rural employment, improves local microclimates, and enhances farmer incomes, positioning it as a cornerstone of sustainable development in India.

Additionally, the valorisation of surplus biomass residues through torrefaction into biochar pellets offers additional avenues for clean energy utilization. These pellets find application in coal power plants and sponge iron industries, reducing carbon emissions while offering economic benefits.

By embracing BioCNG as a viable energy alternative, India can usher in a new era of sustainable development, promoting cooperation among stakeholders, utilizing supportive policies, and exploiting technological advancements to effectively address energy security and climate change mitigation comprehensively. We shouldn’t miss this opportunity.

(The authors are part of Global Green Growth Institute (GGGI); Views are personal)