Gail (India) Ltd will invest around Rs 5,000 crore to establish a renewable energy portfolio of at least 1 gigawatt and set up compressed biogas and ethanol plants.
GAIL (India) Ltd would invest around Rs 5,000 crore to establish a renewable energy portfolio of at least 1 gigawatt and set up compressed biogas and ethanol plants as part of its efforts to diversify its business beyond natural gas.
GAIL Chairman and Managing Director Manoj Jain said that as part of a push to adopt greener types of energy, the company will install pipeline infrastructure to connect consumption hubs to gas sources and spend up to Rs 4,000 crore on renewable energy.
“We are a business that is already eco-friendly – gas. And now we want to leverage our position to go greener in line with the vision of the government and the Prime Minister to cut carbon emissions and pollution,” he said.
While solar or wind-generated electricity is the cleanest type of energy, transforming municipal garbage into compressed biogas will help complement the supply of cleaner fuel for autos and homes.
It also intends to build ethanol plants that will turn agricultural waste or sugarcane into a cleaner fuel that can be mixed with gasoline, reducing India’s reliance on imports, he said.
While the renewable energy push will cost Rs 4,000 crore, he estimates that putting up at least two compressed biogas plants and an ethanol factory will cost Rs 800-1,000 crore.
India is boosting up efforts to investigate new kinds of energy to clean up the skies and reduce reliance on foreign fuels since it imports 85 percent of its crude oil needs. “We have 120 MW of renewable energy capacity which we want to scale up to 1GW in next 3-4 years,” he said.
GAIL will compete for a 400 MW solar power capacity being auctioned in Rewa, Madhya Pradesh, by SECI (previously Solar Energy Corporation of India).
In 2019, the company won a bid for IL&FS’s 874 MW operational wind power projects worth Rs 4,800 crore. According to him, however, IL&FS’ other partners utilized the first right of refusal to deny GAIL’s proposal.
“We are open to acquisitions and will look at any asset that makes commercial sense. We had almost got the IL&FS project,” he said.
GAIL has partnered with BHEL, a state-owned power equipment manufacturer, for a renewable energy venture. The partnership aims to take advantage of both companies’ competitive advantages.
The project will be developed by GAIL, with BHEL serving as the project manager and EPC (engineering, procurement, and construction) contractor. GAIL is building its first compressed biogas (CBG) facility in Ranchi, according to Jain, at a cost of Rs 200-300 crore.
Using municipal garbage, the facility will produce five tonnes of CBG per day and around 25 tonnes of bio-manure. “The gas produced will be fed into the city gas network supplying CNG to automobiles and piped natural gas to households. This will help reduce pollution,” he said.
GAIL has issued a request for expressions of interest to find partners for the construction of CBG plants. GAIL’s move, which has a 75% market share in gas transmission and a more than 50% market share in gas trading in India, is seen as part of the government’s vision to prepare for the energy transition process, which aims to increase the share of gas in the energy mix to 15% by 2030 from the current 6.2 percent.
Recently Carbon Clean Solutions Ltd. and GAIL have signed an agreement. CCSL will use its own money, technology, and skills to develop four CBG plants at first. These facilities will operate under 10-year CBG offtake agreements with GAIL or its affiliates. The relationship will be expanded to many more such plants depending on its success.
