Gas Based Power Generation in India

General Studies Paper -3 

Context: The Centre has directed all gas-based power generating stations to operationalise their plants from May 1 to June 30 in view of rise in electricity demand due to an early onset of the heat wave this summer.

India’s Gas Based Energy Sector

• The Central Electricity Authority under the Ministry of Power, monitors 62 gas based power stations, with a total capacity of 23,845 MW using gas as primary fuel.
• India’s natural gas demand is expected to rise by 6 percent in 2024 with a rise in consumption in fertiliser units, power generation and industrial sectors, according to the International Energy Agency (IEA).
• India is the 4th largest importer of liquefied natural gas (LNG).
• Significance: Gas-based power plants offer several advantages, including lower emissions and quicker ramp-up times compared to coal-based plants.
  • However, the share of gas-based power generation in India’s total power mix remains relatively small compared to coal and renewable energy sources.

Need for the Gas Based Power Generation in India

• Cleaner Energy Source: Gas-based power generation emits fewer pollutants compared to coal-based power plants, making it a cleaner option, especially in urban areas where air quality is a significant concern.
• Flexibility and Efficiency: Gas-based power plants are highly efficient and offer greater operational flexibility compared to coal-based plants.
• Reduced Dependence on Coal: India heavily relies on coal for electricity generation, but diversifying the energy mix with gas can reduce this dependence, enhancing energy security and reducing vulnerability to supply disruptions.
• Rapid Deployment: Gas-based power plants can be constructed relatively quickly compared to large-scale coal or nuclear plants.
  • This rapid deployment capability makes them a viable option for meeting short-term increases in electricity demand.

Challenges Faced by the Sector

• Import of Natural Gas: India has limited domestic natural gas reserves, and the majority of its natural gas consumption is met through imports.
  • Despite efforts to explore and exploit domestic reserves, India still relies heavily on imported natural gas, primarily from countries like Qatar, Australia, and the United States.
• Infrastructure Constraints: The development of infrastructure, including pipelines, LNG terminals, and city gas distribution networks, is essential for the efficient transportation and distribution of natural gas.
  • However, the expansion of infrastructure in India has been hampered by factors such as land acquisition issues, regulatory hurdles, and funding constraints.
• Competitive Pricing: Natural gas competes with other energy sources such as coal, renewable energy, and imported liquefied petroleum gas (LPG) in India.
  • The pricing of natural gas relative to these competing fuels influence its attractiveness for various applications, including power generation, industrial use, and transportation.
• Environmental Concerns: While natural gas is considered a cleaner alternative to coal and oil, its extraction, transportation, and combustion still produce greenhouse gas emissions.
  • Addressing environmental concerns related to methane leakage, air pollution, and carbon emissions is crucial for the sustainable development of the gas-based energy sector.

Government Initiatives to Increase Gas Based Energy

• Infrastructure Development: A total of 23,391 km of the natural gas pipeline is operational and about 4,125 km of the gas pipeline is under construction as of Feb 2024.
  • Target to increase the pipeline coverage by ~54% to 34,500 km by 2024-25 and to connect all the states with the trunk natural gas pipeline network by 2027.
• Pradhan Mantri Urja Ganga (PMUG): Launched in 2016, PMUG aims to develop the natural gas pipeline infrastructure in eastern India, connecting gas sources and major demand centers.
  • The project involves the construction of a pipeline connecting Uttar Pradesh to West Bengal, passing through Bihar, Jharkhand, and Odisha.
• City Gas Distribution (CGD) Network Expansion: The government has been promoting the expansion of CGD networks across India to increase access to piped natural gas (PNG) for households, industries, and commercial establishments.
  • Under the CGD bidding rounds, licenses are awarded to entities for developing CGD networks in geographical areas identified by the Petroleum and Natural Gas Regulatory Board (PNGRB).
• Natural Gas Marketing Reforms: The government has introduced reforms in the marketing of natural gas to enhance transparency, promote competition, and attract investment in the sector.
• Gas Price Rationalization: Reforms such as the New Domestic Gas Pricing Guidelines (2014) and the introduction of the Hydrocarbon Exploration and Licensing Policy (HELP) have aimed to provide pricing incentives for domestic gas producers while balancing the interests of consumers.
• Natural Gas Infrastructure Development Fund (NGIDF): The government has set up the NGIDF to provide financial support for the development of natural gas infrastructure in India.

Promotion of LNG Imports and Terminals: The government has encouraged investment in LNG import terminals to diversify gas supply sources and enhance energy security.