Energy Transition and Net Zero Commitment
Published on : Monday 01-04-2024
Vinayak Marathe on the balancing Act India must perform between growing energy consumption and Net Zero commitment.
India has many challenges ahead – climate crisis, energy independence and improving the quality of life, at a time when the economy is growing – and a limited time frame to achieve all this without impacting economic growth.
India is targeting a 5 trillion-dollar economy, and will achieve it sooner or later. India at the moment is the 5th largest economy in the world and would soon become the 3rd largest. Does it make India a rich country? No, certainly not. The per capita GDP of India as per the data released by the International Monetary Fund (IMF) on February 07, 2024, is USD 2850. In terms of GDP/Capita, India’s ranking is 140th (nominal, 2023) and 125th (PPP, 2023). If India has to figure in the list of rich and developed countries, GDP/Capita must grow at a much higher pace.
The Energy Sector has to play a major role for a developed India. Fuel demand of India is expected to grow from 5 million barrels to 10 million barrels by 2045. Petrochemical demand of India is expected to grow from current 25 MMTPA to over 75 MMTPA. Energy demand will continue to grow with the growth of GDP and per capita income. India has >80% import dependency for crude oil and >45% import dependency for natural gas. India has announced net zero by 2070. Most energy companies in India have announced net zero by 2040-2050.
India’s 27% GDP comes from manufacturing, 58% from services and just 15% from agriculture. At the same time more than 45% of the Indian workforce is engaged in agriculture. Agriculture workers earn the lowest per capita income of Rs 45,000-50,000 which is almost 1/3rd of manufacturing per capita income. Unless the agriculture manpower migrates to manufacturing, inclusive growth of the country will not happen.
Given the above data, India has to do the big balancing act of moving towards net zero, managing rapid growth in the energy sector, and developing the sources of ‘new energy’ to reduce the GHG emissions and more importantly, become ‘Atmanirbhar’.
How will the balancing happen?
1. Refinery – India is the 3rd largest consumer of oil and gas after the US and China. Demand for petroleum products will continue to rise. Following are the options for India to reduce the dependency on crude oil imports:
· Refinery integration, asset upgradation, and maximise bottom processing
· Natural gas integration with Refinery to produce power and hydrogen
· Consider petroleum coke gasification to synthetic natural gas and utilising refinery off gas for petrochemical production.
· Extensive growth of electric vehicles, and
· Ethanol blending much beyond the current target of 20%.
However, these measures will not help GHG gas emission reduction, and the only options for emission reduction are:
· Electric Vehicles – Not yet proven but there are a number of papers which show that life cycle CO2 emission with electric vehicles is more or less same as fossil fuel vehicles.
· Extensive research to bring down the cost of 2G and 3G bio-fuels to match it with the fossil fuel-based petroleum products.
· Continued efforts to make hydrogen driven vehicles as reality.
· Extensive research to reduce the cost of Carbon capture and making value added chemicals from the CO2.
· Circular economy for bio-crude oil – Proof of concept has been done to make crude bio oil from algae route. Algae are grown on sea water using the CO2 captured from the refinery emission and the sunlight. Current challenge for this circular economy is the comparative cost. If the research initiatives succeed to match the cost of bio crude oil through natural crude oil, this can be the game changer for the entire energy sector.
2. Petrochemicals: Most of the petrochemical production in India is dependent upon the refinery streams, natural gas, ethane and propane. In all these options import dependency on oil and gas remains high and will continue to increase. Due to the continuously changing geo-political situation the petrochemicals produced from refinery downstream and natural gas are unable to withstand the global competition. Large petrochemical assets are being built at the source of oil and gas in the Middle-east, Russia, and North America. As the maximum growth of petrochemicals is in India, the target market for all global production is also India. Following are the few options for India to deal with such challenges:
· Crude to Chemical through Catalytic Cracking – This is the upcoming technology which can improve the economics of both refinery and petrochemicals.
· Improving the efficiency of the existing assets to make those perform at top quartile performance. This is achievable through a few simple modifications to reduce the energy consumption, feedstock optimisation, de-bottlenecking, and revamps.
· India has huge reserves of coal. Focus is needed to develop the technologies to produce the olefins from the available quality of coal. China has a number of petrochemical plants based on the Coal to Olefin technology.
3. Energy mix: All fossil fuels peak before the end of this decade, with declines in advanced economies and China offsetting increasing demand elsewhere. Global predictions are very optimistic about the sharp reduction in coal consumption. Can India achieve the same trend of reduction of coal consumption? India had opposed the draft of COP27 for phasing out coal. India succeeded in changing the draft to ‘phase out coal from phase down coal’. India has the cheapest power from coal and hence even with import of some good quality coal, India’s 47% electricity generation comes from coal.
The only viable option to reduce coal consumption to move towards net zero targets is to maximise the solar power generation. India is aggressively pushing solar power with policies, subsidies, and with the efforts to reduce the cost of generation. Solar power capital cost is almost 4 times if the power is required 24x7 due to high, 2.5 times additional generation capacity and the cost of storage. Another aspect of phasing down coal is social impact, which has not been given much attention. The number of jobs in the coal mining, transportation and thermal power plants will heavily reduce as the power generation from the coal goes down. The number of jobs created with solar plants is much lower than the number of jobs phased out with reduction in coal mining and power generation.
Nuclear power is one of the best options to phase out coal and also reduce the emissions. However, new engineering standards for nuclear power plants, after the disaster in Japan due to the tsunami, have increased the capital cost for building the new nuclear plants. Also, there is huge opposition from the public to build nuclear plants. People are not much aware that nuclear plants can be safely operated for the entire life cycle with advanced safety measures.
4. Populist policies and commitment for the net zero: Many countries and an increasing number of businesses are committed to reaching net zero emissions. As of September 2023, net zero emissions pledges cover more than 85% of global energy-related emissions and nearly 90% of global GDP. Ninety-three countries and the European Union have pledged to meet a net zero emissions target. Moreover, governments around the world, especially in advanced economies, have responded to the pandemic and the global energy crisis by putting forward new measures designed to promote the uptake of renewables.
India launched four new energy efficiency policies for residential appliances, in support of reducing the nation’s energy intensity by 45% by 2030. India has set a target to reduce the carbon intensity of the nation's economy by less than 45% by the end of the decade, achieve 50 per cent cumulative electric power installed by 2030 from renewables, and achieve net-zero carbon emissions by 2070. India aims for 500 GW of renewable energy installed capacity by 2030.
India has also launched the National Green Hydrogen Mission with the objective ‘to make India the Global Hub for production, usage and export of Green Hydrogen and its derivatives’. This will contribute to India’s aim to become Aatmnirbhar through clean energy and serve as an inspiration for the global Clean Energy Transition. The mission will lead to significant decarbonisation of the economy, reduced dependence on fossil fuel imports, and enable India to assume technology and market leadership in Green Hydrogen.
India had active participation in COP28 in spite of the country’s per capita emission being very low. COP28 has not achieved much as most of the developed countries are failing on their commitments for climate funding. India, in spite of not much financial support from the developed countries is moving ahead with its target of Net Zero by 2070.
The next generation is likely to see the adversities of the climate impact on their lifestyle. It is important for the Generation Next to understand the consequences of the climate crisis, measures being announced to reduce the impact, and how critical is their role to make the challenging plans successful. Next generation is going to be much more equipped with tools like AI, Cloud computing, autonomous operation and robots, etc. Energy transition and Atmanirbhar challenges can be much faster achieved by the next generation.
Vinayak Marathe is Director of India subsidiary of Phillips Townsend Associates Inc., Houston – USA; Technology Director – Encon Group of Companies; Visiting Consultant OQ (Oman); and Freelance Consultant for O&M Excellence, Process Safety Management, Biofuels, Hydrogen Safety, R&D Performance Management. Recent and ongoing assignments with L&T, Aramco, Johnson Matthey, HMEL, IOCL, NCL, Solar Industries, OQ (Oman), Quest Global etc., apart from former Sr Vice President in Reliance Industries Limited.
Mr Marathe has 40+ years’ experience in Operation, Factory Management, large green & brown field projects (concept to commissioning) for hydrocarbon and largest integrated R&D, world largest algal biofuel plants, and R&D strategy & planning. As head of R&D Strategy and Planning, he has developed systems and procedures for R&D HSE, Project risk and performance management; customised and implemented Process Safety Management systems for R&D laboratories and pilot plants; and customised and implemented world’s best Safety andOperation Management systems for R&D and Manufacturing plants of Reliance Industries Limited. He also commissioned and operated large Polyester plants, Aromatics plants, largest refinery Hydrotreaters, Refinery interconnect Project, and world largest biofuel pilot plants. As part of core business transformation leadership team, he headed the entire Technology function to develop business processes/standards and digitise those with world’s best digitisation platforms/tools.
Mr Marathe has delivered session/lectures on Process Safety, R&D Performance Management, Petrochemicals growth challenges, Hydrogen Safety, Ecology & Economy, Energy Management, and O&M Excellence at CSIR labs, IOCL, BPCL, HMEL, CHT conferences, Ashok Leyland, HPCL, SOCAR and Tupras – Turkey, and a number of academic and research institutions. He has recruited and mentored over 1000 fresh and experienced engineering graduates from thepremier institutes in the country. He has delivered talks in over 100 National and International Conferences and academic institutions (engineering and management) of high repute; and coached over 200 leaders in Reliance with 2 full days workshop on “Leadership behavior for HSE Cultural Transformation”
Mr Marathe received the Golden Peacock award for 2 consecutive years for Innovation Management Systems, and has received Jewel of LIT (distinguished Alumina) Award in 2018. He graduated from LIT Nagpur in 1979, worked with Nirlon Synthetic Fibers till 1986; and worked with Reliance Industries Limited from May-1987 till July-2020, was India Business Head for PTAI (Huston US) since August-2020.
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