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One Nation, One Gas Grid (5 January 2021)

One Nation, One Gas Grid (5 January 2021)

Context:

Prime Minister Narendra Modi on Tuesday inaugurated the 450-km natural gas pipeline between Kochi in Kerala to Mangaluru in Karnataka. Speaking at the event, he set out his government's energy roadmap, envisaging more than double the share of cleaner natural gas in the consumption basket, diversifying sources of energy, connecting the nation with one gas pipeline grid and bringing affordable fuel to people and industry. He stressed that a gas-based economy is crucial for Atmanirbhar Bharat and work is being done in the direction of 'One Nation, One Gas Grid'.

Background:

At present about 16,500 km natural gas pipeline is operational.

About 14,239 km gas pipelines are being developed to increase the availability of natural gas across the country.

Summary of the Debate

“One nation, one gas grid”:

  • A high-voltage electric power transmission network in mainland India that connects power stations and all-important substations to ensure generation of electricity at every point across and used to satisfy demand.
  • The National Grid is owned, operated, and maintained by state-owned Power Grid Corporation of India.

Objectives:

  • To provide rural households with cooking gas and electricity connection by 2022 that is by the 75th year of India’s independence.
  • To make a positive impact on the economic growth of states.
  • To improve the standard of living of people.
  • To reduce expenses of both the poor and entrepreneurs.

Need of One Nation, One Gas Grid:

  • Increasing the use of natural gas and Green fuel will help in meeting emission reduction targets.
  • It will develop a new ecosystem of employment involving various sectors like fertilizer, petrochemical and power.
  • It will also help India save thousands of crores of rupees in foreign exchange.
  • As India aims to increase the share of Natural gas usage to 15% by 2030, the Natural gas can be used as a transition fuel before completely switching to solar or clean energy.
  • It will help improve clean energy access
  • Aid in the development of city gas projects.

Major Initiatives taken by government to develop the gas-based infrastructure:

  • Marketing and Pricing Freedom: Government is taking a lot of measures to improve the energy mix of India. For example, in the petroleum sector, the recent reform that has been done particularly with respect to the natural gas is ‘Marketing and Pricing Freedom’.
  • e-bidding process: The e-bidding process that has been initiated by government that actually aims at bringing more investment, exploration and production of natural gas. Currently, India have reached 53 percent import dependency of natural gas.
  • Investment: 1.2 lakh crore investment is coming in the city gas distribution network.
  • SATAT (Sustainable Alternative Towards Affordable Transportation): Government is looking from the waste to energy. All the residual waste of the farmers, municipal solid waste, sugarcane waste, etc. are being utilized in producing the natural gas.
  • Connectivity: As a grid, north and west already connected with the areas of the LNG terminal as well as consumers and in the last 4 years government has also tried to connect eastern area.
  • GST Cap: Government is also considering proposal to bring natural gas within the ambit of the GST. It will lead to a very significant advantage to gas as compared to other polluting fees because as on date, there are many polluting fees which are in GST but gas is not. This will help many of the consumers especially the small and medium entrepreneur who have small industries, they can get the credits.

Attaining self-reliant in energy sector:

When it comes to Aatmanirbhar Bharat, the MSMEs sector and those who dependent on natural gas for production should come and understand:

  • Value Chain: That is how the gas system functioning.
  • Distribution: Distribution of natural gas has to be done in such a way that stakeholders in a particular region play a more pro-active role.
  • Huge investment: It is important that we move in such direction that all stakeholders that is private sector, public sector, clusters, the end user, wherever possible should come together and invest in gas pipeline infrastructure.

Challenges:

  • Infrastructure hiccups: The pipeline project that was inaugurated recently was founded in 2009 and took 11 years to get it operational. Also, the land issues, the local authorities and the state level challenges.
  • Investment: Investment requires stability in policy regime.
  • Land Papers: In many of the areas, there are the issue of processing of land papers so it becomes difficult for the government to find that to whom to give compensation.
  • Energy Consumption: Per capita energy consumption in India is among the lowest in the world.
  • Below global average: As India is 6.2 to 6.5 percent in energy mix. Globally, the average of natural gas and energy basket is 23 to 24 percent.
  • Low accessibility: More than 80 percent Indians are still out of natural gas economy.

Way Forward:

  • We need to bring large Indian population in natural gas economy and that means more investment, more stakeholders, better education when it comes to natural gas.
  • Government need to take steps in very planned manner.
  • We need more LNG terminals, we need more upstream production of gas and we need to strengthen GAIL India that GAIL India becomes like what is Gazprom to Russia today.
  • In order to eradicate energy poverty, government need to invest more in natural gas.
  • To garner investors trust, the pricing mechanism of natural gas is another area which need to be focused.
  • In a democracy, we can’t afford to keep even a single citizen out of natural gas. We need to take natural gas to every single household across the country. So, we need ‘Gas Democracy’ in the country.

Important points made by the Guests

Manoj Jain, Chairman & Managing Director & Director (Projects), GAIL

  • To raise the share of natural gas, government has announced expansion of National Gas Grid from the previous 17,500 km to about 34,000 km.
  • After adding the 450 km. it is already reached 17,900 km and another 16,000 km, we are looking in the next 5 to 6 years.
  • Natural gas pipeline is one thing which delivers in three key important areas:
    • Environment
    • Health
    • Stimulating economy and creating more jobs

Prachi Gupta, Consultant, Energy, Niti Aayog

  • It will help meet the government’s target of reaching 15 percent natural gas mix in its energy basket by 2030. We are currently at 6.2 to 6.5 percent mix. So, connecting the nation with source to the consumers with the natural gas grid will definitely be a step towards that.
  • It helps improve the regional balance because currently the natural gas is located in limited pockets in the country.
  • The draft that Petroleum and Natural Gas Regulatory Board (PNGRB) has recently put up with respect to tariff rationalization. So, setting up gas pipeline is important and the second aspect is to look at the underutilize gas pipeline and overcome the challenges that are currently being faced.
Petroleum and Natural Gas Regulatory Board (PNGRB)
  • Petroleum and Natural Gas Regulatory Board (PNGRB) is a statutory body in India, constituted under the act of Parliament of India, namely Petroleum and Natural Gas Regulatory Board Act, 2006.
  • Its primary functions include regulation of refining, transportation, distribution, storage, marketing, supply and sale of petroleum products and natural gas.

Narendra Taneja, Energy Expert

  • One Nation, One Gas Grid basically means that the various state governments and various other stakeholders and the centre and the public and the private sector move in one direction instead of moving in different direction.
  • It’s not enough that Central government think in that direction but various state government is also important because they play a very important role as facilitator and approval.
  • There are two aspects of the whole things, one is where do we get this gas from, basically the LNG terminals. We have about 5 to 6 LNG terminals. In coming next 10 years, we are going to have 16-18 gas terminals. So, we need to invest more and take various state governments on board in terms of stakeholder and equity holder.
  • We need more natural gas in the country so that we can:
    • Take this natural gas to household.
    • To factories and manufacturing bases and cities.
    • Take to power plant to generate more electricity.

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