Fuel Sector

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Introduction


 

  • Power is one of the most critical components of Infrastructure-2/”>INFRASTRUCTURE crucial for the economic Growth and welfare of nations. The existence and development of adequate infrastructure is essential for sustained growth of the Indian economy.

 

  • India’s power sector is one of the most diversified in the world. Sources of power generation range from conventional sources such as coal, lignite, natural gas, oil, hydro and nuclear power to viable non-conventional sources such as wind, solar, and agricultural and domestic waste. Electricity demand in the country has increased rapidly and is expected to rise further in the years to come. In order to meet the increasing demand for electricity in the country, massive addition to the installed generating capacity is required.

 

  • In May 2018, India ranked 4th in the Asia Pacific region out of 25 nations on an index that measures their overall power.

 


Market Size


 

  • Indian power sector is undergoing a significant change that has redefined the Industry outlook. Sustained economic growth continues to drive electricity demand in India. The Government of India’s focus on attaining ‘Power for all’ has accelerated capacity addition in the country. At the same time, the competitive intensity is increasing at both the market and supply sides (fuel, Logistics, finances, and manpower).

 

  • Total installed capacity of power stations in India stood at 346.62 Gigawatt (GW) as of November 2018.

 


Investment Scenario


 

  • Between April 2000 and June 2018, the industry attracted US$ 14.18 billion in Foreign Direct Investment (FDI), accounting for 3.64 per cent of total FDI inflows in India.
  • Some major investments and developments in the Indian power sector are as follows:
  • In November 2018, Renascent Power Ventures Pte Ltd acquired 75.01 per cent stake in Prayagraj Power Generation Company Limited (PPGCL) for US$ 854.94 million.
  • In August 2018, Kohlberg Kravis Roberts & Co (KKR) acquired Ramky Enviro Engineers Limited for worth US$ 530 million.
  • In April 2018 ReNew Power made the largest M&A deal by acquiring Ostro Energy for US$ 1,668.21 million.

 


Government Initiatives


 

  • The Government of India has identified power sector as a key sector of focus so as to promote sustained industrial growth. Some initiatives by the Government of India to boost the Indian power sector:
  • As of September 2018, a draft amendment to Electricity Act, 2003 has been introduced. It discusses separation of content & carriage, direct benefit transfer of subsidy, 24*7 Power supply is an obligation, penalisation on violation of PPA, setting up Smart Meter and Prepaid Meters along with regulations related to the same.

 

  • Ujwal Discoms Assurance Yojana (UDAY) was launched by the Government of India to encourage operational and financial turnaround of State-owned Power Distribution Companies (DISCOMS), with an aim to reduce Aggregate Technical & Commercial (AT&C) losses to 15 per cent by FY19.
  • As of August 2018, the Ministry of New and RENEWABLE ENERGY set solar power tariff caps at Rs 2.50 (US$ 0.04) and Rs 2.68 (US$ 0.04) unit for developers using domestic and imported solar cells and modules, respectively.

 

  • The Government of India approved National Policy on Biofuels – 2018, the expected benefits of this policy are Health benefits, cleaner Environment, EMPLOYMENT generation, reduced import dependency, boost  to  infrastructural  investment  in  rural areas and  additional income to farmers.

 

COAL SECTOR

  • The reality of India’s Energy sector is that around three-quarters of our power comes from coal powered Plants and this scenario will not change significantly over the coming decades. Thus, it is important that India increases its domestic coal production to provide Energy Security and reduce its dependence on imports. The following steps needs to be undertaken to boost coal production and distribution –

 

  • At the institutional level, an independent organisation should be created to develop and maintain the repository of all coal related geological information in the country. The proposal to set up a Coal Regulator for fostering competition in the coal sector apart from advising Central Government on the formulation of the principles and methodologies for determination of price of raw coal and washed coal should be implemented.

 

 

  • Using market mechanisms to open the coal-mining sector for commercial mining. (Discussed later).

 

  • Critical role of railways in coal distribution should be leveraged. In 2014, 50 million tons of coal could not be distributed in a timely fashion due to rail limitation. For instance, there is a need to complete the three critical Railway lines namely Tori-Shivpur, Jharsuguda-Barpalli and Mand-Raigarh to significantly augment coal evacuation.

 

 

  • The government should employ more Coal-Handing and Preparation Plants (CHPP) that wash coal before shipping. This process removes ash and debris, thereby increasing the energy content per tonne by 10-20%. Also, steps need to be taken to adopt clean-coal technologies including coal gasification.

 

  • Finally, to boost production, the on-going auction process and transfer of mining lease and other related activities of captive mines to the new successful bidders should be expedited. The production from captive blocks has been targeted at 400 MT by 2020; the yearly targets should

 

  • be devised and, where required, coalmines should be re-allocated to achieve the above target.

 

OIL AND GAS IN INDIA Oil & Gas scenario in India:

  • India has 0.5% of the oil and gas Resources of the world and 15% of the world’s Population. This makes India heavily dependent on the import of the crude oil and natural gas.

 

  • India the third-largest oil consuming nation in the world: India’s oil consumption grew 8.3 per cent yearon-year to 212.7 million tonnes in 2016, as against the global growth of 1.5 per cent.

 

 

  • India is the fourth-largest Liquefied Natural Gas (LNG) importer after Japan, South Korea and China, and accounts for 5.8 per cent of the total global trade.

 

  • Government aims to increase the share of gas in the country’s energy mix to 15 per cent by 2020 from about 6.5 per cent now to curb pollution and carbon emissions.

 

 

  • Draft National Energy Policy target to reduce oil imports by 10% from (2014-15 levels) by 2022

 

  • According to the Minister of State for Petroleum and Natural Gas, India’s oil demand is expected to grow at a compound annual growth rate (CAGR) of 3.6 per cent to 458 Million Tonnes of Oil Equivalent (MTOE) by 2040, while demand for energy will more than double by 2040 as economy will grow to more than five times its current size.

 

EXPLORATION OF COAL BED METHANE (CBM)

  • The Cabinet Committee on Economic Affairs chaired by the Prime Minister gave its approval for issuing a notification amending Oil Fields (Regulation and Development) Act, 1948 (ORD Act, 1948)

 

  • Government had earlier issued a notification in 2015 granting rights to CIL and its subsidiaries for exploration and exploitation of CBM from all coal bearing areas for which they possess mining lease for coal. However, permission was required for Mining Lease (ML) for CBM by Ministry of Petroleum and Natural gas.

 

 

  • Now with new amendment, requirement of permission has been done away with for CIL and its subsidiaries.

 

RENEWABLE ENERGY

  • India is looking at using renewable energy to meet multiple objectives: energy security, Energy Efficiency, decarbonization, and sustainability, among others. India’s fossil fuel requirements, which comprise nearly 90% of primary energy supply, are increasingly being met by imports. India is also committed to meeting its commitments stated in the Paris Agreement. Renewable energy is an element in achieving these objectives. The following actions are recommended for expanding the installation, generation and distribution of Renewable energy-

 

  • At the institutional level, all 8 Renewable Energy Management Centres (REMCs) should be operationalized to activate grid planning between Central Power System Operation Corporation Limited (POSOCO) and / State Load Despatch Centre (SLDCs) to ensure smooth dispatch of renewable electricity.
  • There is a need to develop storage solutions within next three years to help bring down prices through demand aggregation of both household and grid scale batteries.

 

  • The central/state agencies should provide infrastructural, transmission and purchase support to developers to help achieve the renewable target of the country. Moreover, a friendly eco-system for integration of renewable electricity should be created by changing/improving the regulatory practices and better coordination, through state specific renewable action plans.

 

 

  • A robust market for renewable power should be created through effective implementation of Renewable Purchase Obligations (RPOs) especially in the Light of uniform targets having been announced. The renewable rich states may be encouraged to sell power to renewable poor states

 


Government initiatives


 

  • Some initiatives by the Government of India to boost the Indian renewable energy sector are as follows:
  • A new Hydropower policy for 2018-28 has been drafted for the growth of hydro projects in the country.
  • The Government of India has announced plans to implement a US$ 238 million National Mission on advanced ultra-supercritical technologies for cleaner coal utilisation.
  • The Ministry of New and Renewable Energy (MNRE) has decided to provide custom and excise duty benefits to the solar rooftop sector, which in turn will lower the cost of setting up as well as generate power, thus boosting growth.
  • The Indian Railways is taking increased efforts through sustained energy efficient measures and maximum use of clean fuel to cut down emission level by 33 per cent by 2030.


Achievements in the sector

  • Solar capacity has increased by eight times between FY14-18. India added record 11,788 MW of renewable energy capacity in 2017-18.
  • A total of 47 solar parks with generation capacity of 26,694 MW have been approved in India up to November 2018, out of capacity of 4,195 MW has been commissioned.
  • Inter-state distribution of wind power was started in August 2018.
  • Power generation from renewable energy sources (excluding large hydro) in India reached record 101.84 billion units in FY18 and has reached 81.15 billion units between Apr-Oct 2018.


Road Ahead


 

  • The Government of India is committed to increased use of clean energy sources and is already undertaking various large-scale sustainable power projects and promoting green energy heavily. In addition, renewable energy has the potential to create many employment opportunities at all levels, especially in rural areas. The Ministry of New and Renewable Energy (MNRE) has set an ambitious target to set up renewable energy capacities to the tune of 175 GW by 2022 of which about 100 GW is planned for solar, 60 for wind and other for hydro, bio among other. As of June 2018, Government of India is aiming to achieve 225 GW of renewable energy capacity by 2022, much ahead of its target of 175 GW as per the Paris Agreement. India’s renewable energy sector is expected to attract investments of up to US$ 80 billion in the next four years.

 

  • It is expected that by the year 2040, around 49 per cent of the total electricity will be generated by the renewable energy, as more efficient batteries will be used to store electricity which will further cut the Solar Energy cost by 66 per cent as compared to the current cost.* Use of renewables in place of coal will save India Rs 54,000 crore (US$ 8.43 billion) annually5.

 


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The fuel sector is a vital part of the global economy, providing the energy that powers our homes, businesses, and transportation systems. However, the fuel sector is also a major source of greenhouse gas emissions, which are contributing to Climate change. In recent years, there has been a growing focus on developing cleaner and more sustainable sources of energy, such as biofuels, solar power, and wind power.

Biofuels are fuels that are produced from renewable resources, such as plants. Biofuels can be used to generate electricity, power vehicles, and heat homes and businesses. Biofuels are a promising alternative to fossil fuels, as they do not produce greenhouse gases. However, biofuels can also have a negative impact on the environment, as they can lead to deforestation and the loss of Biodiversity-2/”>Biodiversity.

Coal is a fossil fuel that is formed from the remains of ancient plants and animals. Coal is used to generate electricity, power industrial processes, and heat homes and businesses. Coal is a non-renewable resource, and its use is a major contributor to Climate Change.

Electricity is a form of energy that is used to power our homes, businesses, and transportation systems. Electricity can be generated from a variety of sources, including fossil fuels, nuclear power, renewable energy sources, and waste-to-energy. Electricity is a clean and efficient form of energy, and it is essential for the modern economy.

Energy efficiency is the use of less energy to achieve the same level of service. Energy efficiency can be achieved through a variety of measures, such as improving insulation, using energy-efficient appliances, and driving more fuel-efficient vehicles. Energy efficiency is important because it can help to reduce our reliance on fossil fuels and lower our energy bills.

Fossil fuels are non-renewable energy sources that are formed from the remains of ancient plants and animals. Fossil fuels include coal, oil, and natural gas. Fossil fuels are a major Source Of Energy for the world, but they are also a major source of greenhouse gas emissions.

Hydrogen is a clean and efficient fuel that can be used to generate electricity, power vehicles, and heat homes and businesses. Hydrogen is produced from water using electrolysis, a process that separates water into hydrogen and Oxygen. Hydrogen is a promising alternative to fossil fuels, but it is currently more expensive to produce than fossil fuels.

Nuclear power is a form of energy that is generated by the splitting of atoms. Nuclear power is a clean and efficient form of energy, but it is also a controversial form of energy due to the risk of accidents and the disposal of nuclear waste.

Renewable energy is energy that is derived from natural sources that are constantly replenished, such as sunlight, wind, water, and geothermal heat. Renewable energy is a clean and sustainable form of energy, and it is becoming increasingly important as we look to reduce our reliance on fossil fuels.

Sustainable energy is energy that is produced in a way that does not damage the environment or deplete Natural Resources. Sustainable energy includes renewable energy sources, such as solar and wind power, as well as energy efficiency measures. Sustainable energy is important because it can help to protect the environment and ensure a secure energy future for our planet.

Transportation fuels are fuels that are used to power vehicles. Transportation fuels include gasoline, diesel fuel, and ethanol. Transportation fuels are a major source of greenhouse gas emissions, and they are also a major source of Air Pollution.

Waste-to-energy is a process that converts waste into energy. Waste-to-energy can be used to generate electricity, heat, or produce fuel. Waste-to-energy is a sustainable form of energy, and it can help to reduce the amount of waste that is sent to landfills.

The fuel sector is a complex and ever-changing industry. The subtopics listed above provide a brief overview of some of the key issues that are facing the fuel sector today. As we look to the future, it is clear that the fuel sector will need to continue to evolve in order to meet the challenges of climate change and energy security.

Here are some frequently asked questions and short answers about the fuel sector:

  1. What is the fuel sector?
    The fuel sector is a broad term that encompasses the production, distribution, and sale of fuels. This includes both traditional fuels such as gasoline and diesel, as well as alternative fuels such as ethanol and biodiesel.

  2. What are the different types of fuels?
    There are many different types of fuels, each with its own unique properties. Some of the most common types of fuels include:

  3. Gasoline: Gasoline is a petroleum-based fuel that is used in internal combustion engines. It is the most common type of fuel used in cars and light trucks.

  4. Diesel: Diesel is a petroleum-based fuel that is similar to gasoline, but it has a higher cetane number, which makes it more efficient. Diesel is used in heavy-duty vehicles such as trucks and buses.
  5. Ethanol: Ethanol is a renewable fuel that is made from plant materials such as corn. It is a cleaner-burning fuel than gasoline and diesel, and it can be used in a variety of vehicles.
  6. Biodiesel: Biodiesel is a renewable fuel that is made from vegetable oils or animal fats. It is a cleaner-burning fuel than gasoline and diesel, and it can be used in a variety of vehicles.
  7. Natural gas: Natural gas is a fossil fuel that is composed primarily of methane. It is a cleaner-burning fuel than gasoline and diesel, and it can be used in a variety of vehicles.

  8. Hydrogen: Hydrogen is a clean-burning fuel that is not a fossil fuel. It is the most abundant element in the universe, and it can be produced from a variety of sources.

  9. What are the benefits of using alternative fuels?
    There are many benefits to using alternative fuels, including:

  10. They are cleaner-burning than traditional fuels.

  11. They can help to reduce greenhouse gas emissions.
  12. They are renewable resources.

  13. They can help to improve energy security.

  14. What are the challenges of using alternative fuels?
    There are also some challenges associated with using alternative fuels, including:

  15. They are often more expensive than traditional fuels.

  16. They may not be available in all areas.
  17. They may not be compatible with all vehicles.

  18. They may require new infrastructure to be built.

  19. What is the future of the fuel sector?
    The future of the fuel sector is uncertain. Traditional fuels such as gasoline and diesel are still the most popular types of fuel, but alternative fuels are becoming more popular as they become more affordable and available. It is likely that the fuel sector will continue to evolve in the future, as new technologies and fuels are developed.

  1. Which of the following is not a type of fuel?
    (A) Coal
    (B) Oil
    (C) Electricity
    (D) Nuclear power

  2. Which of the following is the most common type of fuel used in the world?
    (A) Coal
    (B) Oil
    (C) Natural gas
    (D) Nuclear power

  3. Which of the following is the cleanest type of fuel?
    (A) Coal
    (B) Oil
    (C) Natural gas
    (D) Nuclear power

  4. Which of the following is the most polluting type of fuel?
    (A) Coal
    (B) Oil
    (C) Natural gas
    (D) Nuclear power

  5. Which of the following is the most expensive type of fuel?
    (A) Coal
    (B) Oil
    (C) Natural gas
    (D) Nuclear power

  6. Which of the following is the most abundant type of fuel?
    (A) Coal
    (B) Oil
    (C) Natural gas
    (D) Nuclear power

  7. Which of the following is the most renewable type of fuel?
    (A) Coal
    (B) Oil
    (C) Natural gas
    (D) Nuclear power

  8. Which of the following is the most non-renewable type of fuel?
    (A) Coal
    (B) Oil
    (C) Natural gas
    (D) Nuclear power

  9. Which of the following is the most controversial type of fuel?
    (A) Coal
    (B) Oil
    (C) Natural gas
    (D) Nuclear power

  10. Which of the following is the most important type of fuel for the global economy?
    (A) Coal
    (B) Oil
    (C) Natural gas
    (D) Nuclear power

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