The Union Cabinet has given its nod to the Ministry of Coal’s proposal of rolling out the ambitious coal and lignite gasification programme, under which viability gap funding (VGF) worth Rs 8,500 crore will be offered to the public and private sectors.
Key points
- The Indian government wants 100 MT of coal gasification by 2030, with investments worth over Rs 4 trillion.
- The total outlay of Rs 8,500 crore for coal gasification projects will be divided into three categories.
- In the first category, Rs 4,050 crore has been provisioned only for government PSUs, wherein up to three projects will be supported by providing a lump-sum grant of Rs.1,350 crore each or 15 percent of the capex, whichever is lower.
- The second category of Rs 3,850 crore has been provisioned for the private sector as well as the government PSUs in which a lump-sum grant of Rs 1,000 crore each or 15 percent of the capex, whichever is lower, will be provided.
- At least one project will be bid out on tariff-based bidding process and its criteria will be designed in consultation with NITI Aayog.
- For the third category, Rs 600 crore has been provisioned for demonstration projects (indigenous technology) or small-scale product-based gasification plants.
- The adoption of gasification technology in India is expected to reduce the country’s reliance on imports of natural gas, methanol, ammonia and other essential products.
Coal gasification
- Coal Gasification is a thermo-chemical process that converts coal into simple molecules, primarily carbon monoxide and hydrogen, called synthesis gas or syngas.
- In gasification process, coal is partially oxidised by air, oxygen, steam, or carbon dioxide under controlled conditions to produce a liquid fuel known as syngas.
- Syngas or synthesis gas can be used for power generation and to make methanol as well.
- The combustion of this gas is cleaner and more efficient than combustion of coal since emissions are trapped at the stage of gasification.
- Coal gas can also be converted into a transportation fuel as a substitute for gasoline in vehicles.
