Coal Gasification : Platform that help to make India energy Independent
Dev Gavaskar
India’s vision, towards becoming a global economic super-power rests on the solutions to the challenges of self-reliance (AtmaNirbharAbhiyaan), monetization of domestic reserves, transformative innovation (Make in India vision), reduction of imports and jobs’ creation, while simultaneously aiming for a decarbonized and sustainable economy in the coming decades.
India has been blessed with three scalable and abundant natural resources in the forms of solar energy, biomass reserves and coal. While India can be bullish on the awesome advancements made in the field of solar installations, and a significant amount of research and development work has always been undertaken in case of biomass-based technologies, currently, these resources are challenged by limitations, like the state of downstream technologies for utilizing solar generated electricity and feedstock scalability issues for biomass.
However, India does have reserves of 307 billion tonnes of coal; 80 percent of which has historically been consumed in thermal power plants and represents 55% of the total fuel source for power in India along with lignite. However, as India, being a signatory of the Paris agreement, aims at moving to cleaner forms of energy, an urgent need as arisen to explore alternative avenues for building a bridge from the energy intensive “dirty” present to a cleaner, greener, and sustainable future without compromising on the demands of an ever-growing economy.
At this socio-economic stage, India’s most abundant natural resource, Coal, is in urgent need of diversification. To make this a possibility, India can look to utilize a commercially proven platform that ‘extracts’ the stored chemical energy from coal instead of burning it. Coal gasification is the process of producing syngas – a mixture consisting of carbon monoxide (CO), hydrogen (H2) and carbon dioxide (CO2) – by chemically reacting coal with steam and oxygen (or air), in ratios that results in gasifying the elements of the coal instead of burning them.
This syngas can then be used to produce Synthetic Natural Gas (SNG), energy fuels (methanol & ethanol), ammonia for fertilizers and chemicals, and other chemicals and even plastics. Coal gasification plants have been widely deployed around the world, with countries using the technology to produce fuels and chemicals.
Unlike coal combustion, the carbon dioxide stream from a coal gasification plant is highly concentrated, making carbon capture and utilization more practical and economical, especially when coupled with a source of green hydrogen or other means of CO2 sequestration. In line with the objectives and visions mentioned above, it is no surprise that the Ministry of Coal has taken an initiative for utilizing coal through coal gasification with a target of gasifying 100 million tonnes of coal by the end of this decade.
To underline the government’s seriousness towards this mission, the Ministry of Coal has also formed a new coal-linkage policy for coal gasification projects, under ‘Sub-Sectors under Auction of linkages of Non-Regulated Sectors’
India’s other major aim is that of self-reliance, through becoming an energy independent nation; as was categorically mentioned in Prime Minister Narendra Modi’s speech on the 75thIndependence Day, with a pledge of achieving this in the next 25 years. It is obvious, that the first step towards achieving self-reliance and energy independence will hence have to involve the reduction of imports – primarily petroleum.
To put things in perspective, India’s annual net import of petroleum (used primarily in the transportation sector) stood at 185 million metric tons, which cost approximately USD 55 billion. To reduce these imports, and hence save foreign exchange, the national policy on biofuels of 2018 was launched.
Under the first phase, the Government of India had resolved to supply 5% ethanol blended petrol under its First-Generation Ethanol blended petrol (EBP). Progressively, the Government also advanced the target for 20% ethanol blending in petrol (also called E20) to 2025 from 2030.
As is well known, the traditional paths to make ethanol have been via sugar and biomass-based routes, which are limited and disadvantaged due to various reasons including cost, scale, and land requirement constraints and/or food chain diversion issues. Second generation ethanol feedstock have also emerged using feed such as energy crops, municipal wastes, forest & agricultural residues and wasted food-grains, which have also been primarily plagued by low efficiency and conversion.
Additionally, the feedstock scalability challenges also put an upper limit on the scale of the 2G-ethanol plants, with one plant expected to produce ethanol in the range of 3 crore liters annually.
While there is no doubt, that India has made rapid progress in ethanol blending, reaching approximately 8-9% blending via these routes, solutions must be sought for the significant demand-supply gap to meet the E20 targets, which will not be met via traditional methods. This solution must also be efficient, scalable and result in compelling economics. This is where coal – via gasification and conversion of syngas to ethanol – can help bridge the gap.
Historically the conversion of syngas to ethanol has been challenged by poor conversions & selectivity issues and multi-step reaction schemes, resulting in unacceptable economics. However, novel, disruptive, and transformational technologies, with compelling economics due to highly efficient and selective conversion of syngas to ethanol have been developed and are ready for commercialization.
Furthermore, combining these technologies with coal-gasification can help build plants that are highly scalable, with one commercial coal-to-ethanol plant capable of producing more than 40 crore liters of ethanol annually – at significantly lower capital intensities. Companies have already been in discussions with potential stakeholders and parties, for building commercial and demonstration plants.
For example, technology providers like Synata Bio are commercializing an on-purpose syngas to ethanol technology and a demonstration ‘coal- to-ethanol’ project, which will alone produce about 2.5 crore liters of ethanol annually from coal-derived syngas, is being developed at the Sonepur-Bazari coal complex via a partnership between Synata Bio and Thermax – a project that will bring in approximately USD 100 million in the form of foreign direct investment.
Coal-to ethanol technologies hence provide an effective means of not only solving the demand-supply gap for fuel-ethanol (and meet E20 target) but catalyze the acceleration of the development of coal gasification projects and syngas infrastructure in general, within India, as well as opening possibilities of bringing in foreign direct investments to the country.
However, there are several steps that are still required to incentivize such projects and the associated investments. Ministry of Petroleum and Natural Gas is already in the process of modifying National Policy on Biofuels 2018, to include coal-gasification based ethanol. Acceleration of this will give confidence to the potential investors for investing in these projects.
However, in addition to this, clarity is required for the pricing that such ‘synthetic’ ethanol will fetch in the market. While subsequent projects based on these technologies will undoubtedly have reductions in the cost of production (expected to compete with petroleum gasoline), the first of its kind plant will rely on incentivized pricing, necessary to balance the trade-offs between the plant size (expected to be substantially smaller than optimum to moderate the project capital investments) and the required project returns for the investors.
In a nutshell, the coal to ethanol route provides a promising and economically compelling pathway to achieve the dual objectives of India’s self-reliance and energy independence vision, by helping to achieve the E20 targets. Furthermore, as electrification of the transportation sector picks up, these technologies can also provide a unique ‘carbon capture and utilization’ solution, by reacting the currently vented CO2 stream with green hydrogen, to produce a wide range of key chemical products, including ethylene and other olefins. This holistic approach will, therefore, not only help in achieving India’s goal of self-reliance and energy independence but also provide a true solution for the future inevitable target of decarbonization and even exceed India’s commitments to the Paris accord agreement for climate change goals.
(The author is a partner with True North Venture Partners-PIB)
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