India at 75: India’s energy mix on green path

The oil and gas sector which is among the country’s eight core sectors, and which plays a role in influencing decision making for many other key sectors, is undergoing a paradigm shift. 

In recent years, the government has been pushing its electrification agenda encouraging the ownership of electric vehicles with incentives under initiatives such as FAME 2. In addition, it has urged companies to consider making flex-fuel products that can use ethanol-blended fuel in order to lower the use of traditional fuels. The government has also mandated targets for ethanol blending to encourage these efforts.

India currently imports around 80 percent of its energy needs, and is projected to see its primary energy demand almost double to 1,123 million tonnes of oil equivalent, even as the country’s  GDP is expected to increase to $8.6 trillion by 2040.

It remains to be seen how usage patterns of conventional petrol and diesel will mover even as diesel has seen a decline in use due to the removal of the subsidy element. Along with its electrification agenda and use of blended fuel, the fuel in India’s energy basket is undergoing a transition. It is unlikely that India will be able to reduce its dependence entirely, and given the current geo-political situation, has to contend with a volatile crude price scenario.

Mukesh Surana, former Chairman & Managing Director, HPCL during an interaction with Autocar Professional earlier said that PSU oil marketing companies (OMC)  that have traditionally been into the business of fossil are at the forefront of  energy transition due to  apparent size of their massive operational capabilities and pan-India presence. “Being PSUs, it becomes easier for them to align with the Government’s policy initiatives” said Surana, a mechanical engineer with over four decades of experience that include leadership positions in refineries, corporate, information systems and HPCL’s upstream business.

HPCL has already planned to put up at least 5,000 electric vehicle (EV) charging stations over three years to meet  the growing electric-mobility trends. The charging stations, which are a mix of fast and slow charging, battery swapping are based on different business models including capex and opex amongst others as the segment continues to  evolve, Surana said. IndianOil and Bharat Petroleum will be adding another 10,000 and 7,000 charging stations respectively, taking the total to 22,000 charging stations in the next three years.

The steps taken by OMCs should be seen in context of the government’s  announcement at COP26 in Glasgow last year that India has set a target to be carbon-neutral by 2070 ,  a target that environmentalists argue is at least two decades beyond to avert catastrophic climate impact. The transportation sector contributes about a third of the particulate matter pollution and somewhat higher proportion of nitrogen oxides and other sets of harmful compounds, says the International Council of Clean Transportation (ICCT) citing a 2017  Global Burden of Disease (GBD) report. Though India’s current low per capita transportation emissions due to low vehicle density are lower in global comparison, the rapidly increasing vehicular traffic forecast to reach 200 million by 2030  is expected to increase pollution levels,  experts warn.

Gas-based economy

A white paper issued by Society of Indian Automobile Manufacturers (SIAM) suggests that there are growing concerns about the use of fossil fuels as regards an expensive oil import bill, rising levels of air pollution, CO2 emissions and depleting stocks of petrol and diesel. The Centre has suggested a roadmap for reduction of import of crude oil dependence by 10 percent  by 2021-22 and reducing the energy emissions intensity by 33-35 percent  by 2030 as per the Nationally Determined Contribution (NDC) targets agreed in COP21 at Paris, by increasing natural gas production and promoting energy efficiency and conservation measures, focusing on demand substitution and tapping biofuels.

As part of its transition to green fuels,  the government  announced a National Hydrogen Mission (NHM) in 2021, which inter alia includes development of hydrogen as a fuel for transportation. This has led to various R&D activities being conducted by the oil & gas sector for commercial production of   hydrogen on a sustainable basis.  Further, oil PSUs  have formed a Hydrogen Corpus Fund to fund R&D on various facts of hydrogen including its application as an automotive fuel. Few R&D projects have also been undertaken by OGPSUs using green hydrogen for fuel cell-based mobility. Some of these projects are hydrogen fuel- based two wheelers, developed by Banaras Hindu University whereas hydrogen fuel based three wheelers have been developed by BHU, IIT Delhi and Mahindra & Mahindra.  Indian Oil Corporation has also patented its hydrogen-spiked Compressed Natural Gas (H-CNG) technology which it demonstrated in Delhi on 50 BS-IV compliant commercial CNG buses. The government has also promoted setting up of LNG stations on National Highways, and the golden quadrilateral. Further, in order to push private participation in the energy sector, the Centre now permits 100 percent  FDI in many segments of the sector, including natural gas, petroleum products and refineries.