Rs.8,500cr scheme as incentives for gasification projects
The Ministry of Coal has taken a significant step by issuing three draft Requests for Proposals (RFPs) https://www.globaltenders.com/ to solicit feedback from interested Government PSUs and Private Investors for the establishment of coal gasification plants in India.
This move comes in the wake of the Cabinet’s approval of a financial assistance scheme, allocating Rs.8,500 crores for incentives towards coal gasification projects https://www.coalindia.in/ , categorized into three categories.
Draft requests for proposals (RFPs) https://www.meed.com/latest/tenders have been issued separately for each of the three categories.
Category I allocates Rs.4,050 crores to Government PSUs https://www.worldcoal.com/ to support up to 3 projects, offering a lump-sum grant of Rs.1,350 crores or 15% of the capital expenditure, whichever is lower.
In Category II, Rs.3,850 crores are earmarked for both the Private Sector and Government PSUs, providing each project with a lump-sum grant of Rs.1,000 crores or 15% of the capital expenditure. Additionally, at least one project in this category will undergo a tariff-based bidding process.
Category III includes Rs.600 crores for Demonstration Projects https://ted.europa.eu/en/ and small-scale Gasification Plants, offering a lump-sum grant of Rs.100 crores or 15% of the capital expenditure to entities with a minimum Capex of Rs.100 crore and minimum production of 1500 Nm3/hr Syn gas.
The Ministry said on 6 Mar 2024 that it has initiated the stakeholder engagement by floating three Requests for Proposal (RFPs), inviting feedback until 20 March 2024.
All stakeholders are encouraged to provide their feedback to email: hitlar.singh@nic.in. This proactive measure underscores the Ministry’s dedication to advancing coal gasification projects, with the intention of finalizing the RFPs in March 2024.
Meanwhile, the Ministry is steadfast in its efforts to promote coal production and ensure surplus supply, while transitioning towards cleaner energy alternatives like solar, wind, and hydroelectric power, recognizing the need to address environmental concerns and reduce carbon emissions.
At the forefront of promoting clean coal technology, particularly coal gasification, the Ministry aligns with the Government’s vision of fostering a resilient and sustainable energy ecosystem.
Coal plays a pivotal role in India’s energy system, accounting for nearly 70% of the total electric generation. It is also a critical input in various industries such as steel, sponge iron, cement, and paper. And because of initiatives like ‘Make-In-India’, the Ministry anticipates increased demand and higher economic growth projections.
To introduce clean coal technologies, the Government has launched several clean coal initiatives, including the Coal Gasification Mission which aims to gasify 100 million tonnes of coal by 2030 through surface coal and lignite gasification projects.
The Ministry highlights collaborative efforts in advancing Surface Coal Gasification (SCG) projects in Coal India Limited (CIL) coalfields. Notably, strategic bilateral agreements were executed in October 2022, including a Memorandum of Understanding (MoU) between BHEL & CIL, as well as an MoU between IOCL, GAIL & CIL, aiming to foster cooperation and expertise in driving the implementation of SCG projects.
Significant strides have been made through joint venture agreement (JVA), wherein Government has approved the equity investment proposal by CIL in JVs of CIL-GAIL and CIL-BHEL. The JV Agreement has been formally signed between CIL and Bharat Heavy Electricals Limited (BHEL) for setting up an ammonium nitrate plant through coal gasification (SCG), which is poised to revolutionize indigenous technology, at Lakhanpur area of Mahanadi Coalfields Limited, Odisha.
The upcoming plant as backward integration would help in securing the raw material, reducing import dependency of ammonium nitrate and promoting Atmanirbhar Bharat Abhiyaan.
Additionally, Joint Venture Agreement is under consideration between Coal India Limited (CIL) and Gas Authority of India Limited (GAIL). The agreement aims to establish a Surface Coal Gasification (SCG) project at Eastern Coalfield Limited (ECL) and is expected to be signed shortly.
The adoption of gasification technology in India will revolutionize the coal sector, reducing reliance on imports of Natural Gas, Methanol, Ammonia, and other essential products. It will contribute to India’s vision of becoming Aatmanirbhar and create a surge in employment opportunities.
The implementation of coal gasification is expected to make significant contributions to the nation’s development by reducing imports by 2030.
The Government is also actively engaged in clean coal initiatives such as extraction of Coal Bed Methane (CBM) gases, exploring Coal to Hydrogen, Carbon Capture and Storage (CCS), Coal beneficiation through washeries, etc. to mitigate emissions and enhance environmental sustainability.
Investing in research and development is also prioritized to enhance coal utilization efficiency and develop innovative technologies, thereby ensuring their long-term competitiveness and sustainability.
The Ministry said it is committed to promoting coal gasification projects, which hold immense potential for transforming coal into various valuable products. Fiinews.com
