Highly has been assessed by IOCL and was noted

Highly polluting fuels1 such as petroleum coke (PC) and furnace oil (FO) are used by
industrial units, especially the Small and Medium Enterprises (SMEs), in the
country. Even some categories of waste such as tyre oil and used lubricants,
which doesn’t fall under approved list of fuel (for their use) by regulatory
authorities, are used as source of energy in some industrial units. Imports
of PC has reached 14 million tonne in 2016-17 (Department of Commerce- GoI, 2017)
which is a matter of concern. Countries like the USA and China have banned import
of PC. As per the DPCC notification under the Air (Prevention & Control of
Pollution) Act, use of PC is banned in Delhi2
(DPCC, 1996).
The ban on these fuels has further been extended by Supreme Court of India, to
the neighbouring states of NCR region, and the sale, distribution and use of
pet coke and furnace oil is prohibited in NCR from 1st Nov 2017.

                                                                                                                           

Also, it has been assessed by IOCL and was noted by the Task force that
removal of Sulphur from PC/FO is not cost-effective. The estimated cost for
production of 5000 ppm FO is around INR 40 per litre whereas the cost of
production for BS IV Diesel (50 ppm) is around INR 30 per litre (IOCL, 2017).

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As
the use of PC and FO is already prohibited in Delhi NCR, it is recommended that
fuel substitution is facilitated by making sure that alternate fuel is available
and fiscal instruments are utilised to provide a policy push towards cleaner
fuels.  LNG in the liquid form is the cleanest and economic
fuel available as during the process of liquefaction of natural gas all the
impurities especially Sulphur gets removed completely and the product is
directly imported as finished product. Due to the prevailing tax structure, the
current delivery prices of LNG are higher than the competing polluting fuels
like Furnace Oil and Pet Coke even though the imported price of LNG is 8-10%
cheaper than Crude Oil (GAIL, 2017a). Government’s Import bill can be
hence reduced by promoting LNG as fuel.

Further, for other parts of the country where natural
gas pipeline/ CGD network availability is an issue, LNG supply through
cryogenic road tankers should be incentivized to make it competitive compared
to Furnace Oil & Pet Coke through cess on polluting fuels, lower
differential taxes on cleaner fuels and inclusion of LNG in GST.Following
actions are recommended for enabling the fuel switch in industrial units in NCR-

 

a.   
Ensure
LPG and PNG supply to all designated industrial areas in Delhi NCR on an urgent
basis:

                                                                                    

Gas
Authority of India Limited (GAIL) maintains that assessment for gas supply in
Delhi NCR has been carried out (GAIL, 2017b). Gas can
readily be supplied to industrial clusters except very thinly spread industry share of which is relatively small and operation would not be
economically viable. Therefore, the task force recommends that LPG and PNG
supply to be ensured at the doorstep of all designated Industrial areas located
in Delhi-NCR. It is also recommended that whenever PNG infrastructure is
available in an industrial area, more polluting fuels may be removed from the
list of approved fuel list for that area in a time bound manner.

 

 

b.    Better taxation strategy for cleaner
fuels is required:

 

Taxation
and pricing strategy for clean fuels need to be prepared for providing impetus
to cleaner fuels and discouraging the use of polluting fuels. Lower taxes on
the cleaner fuels are sought and GST can create a level playing field for different
fuels in the country. It is recommended that MoPNG may undertake formulation of
strategy along with the Ministry of Finance (MoF).

 

                     

 

d.   Notify the list of approved fuels in NCR
region

                          

It is recommended that the list of
approved fuels is notified by concerned State Pollution Control Boards (SPCBs) in
the NCR region to curb the use of other dirty fuels which might be in use. CPCB
should ensure that concerned SPCBs issue notifications similar to the DPCC
notification1
under the Air (Prevention & Control of Pollution) Act in 1996. DPCC
indirectly banned the use of polluting fuels in Delhi by approving the use of
fuels with sulphur content only below 1.8% which is economically unviable for
PC and FO.

 

e. 
Facilitate City Gas Distribution (CGD) projects in adjoining NCR towns

Government should facilitate
city gas distribution operations in all towns/areas falling under NCR, wherever
PNG (Piped Natural Gas) supplies are currently not available. Few such cities
or towns in NCR which do not have Natural gas distribution infrastructure
include Hapur, Bulandshahar, Baghpat, Mewat, Jhajjar, Bhiwani, Mahendragarh, Jind,
Muzaffarnagar, Palwal etc.

 

                                                                                    

 

3.2 Clean Fuels for Power                         

                                                           

Although
there are no coal based Thermal Power Plants (TPPs) operational in Delhi,
except one plant in Badarpur, there are 13 TPPs with capacity over 11000 MW in
a radius of 300 km from Delhi (Mukesh Sharma & Dikshit, 2016).
Additionally, the gas based plants in the region are highly underutilised. This
due to the regulatory procedures for power dispatch and fluctuation in gas
prices which renders plant operation economically unviable. Currently,
all renewable based power plants, except the biomass power plants and
cogeneration plants, are treated as “must–run” power plants which means that
they are not subjected to the merit dispatch order (owing to their infirm
nature) (CERC, 2010). Natural
gas based power plants fall under the merit dispatch order. Merit dispatch
order principle favours plants with cheapest variable cost per unit electricity
and depreciated coal-based TPPs have advantage over
gas-based power plants. As a result, natural gas power plants in Delhi are not
able to run at full capacity. Gas based power can meet 50% of Delhi’s demand
whereas it is only meeting 20% of this demand presently (CSE, 2017). Hence the priority ranking of power
plants needs to be revised so that gas based generation enjoys the same status
as renewables for their ability to provide power with substantial reduction on
their impact on air quality.

 

The
gas based generation has several benefits over other conventional thermal power
generation plants including-

                                                            

·        
Low emissions (0.30 tCO2/MWh)
to atmosphere compared to coal (0.98 tCO2/MWh) or diesel (0.59 tCO2/MWh)
and ability to provide clean electricity as a result

·        
Fast ramping capabilities of gas-based
generation (open-cycle gas power plants) for large-scale integration of
renewables into the grid

·        
Gas-based power plants act as
peaking plants in the electricity system. Additionally, the Diesel generators
used during peak hour power shortages are not only more expansive, they are
environmentally more polluting (CEA, 2016)

·        
Higher efficiency (55%), in
general, compared to coal-based TPPs (38-40%) and lower auxiliary power
consumption (3% compared 8.5% in coal-based TPPs)

·        
Significantly lower land and water
requirements compared to coal based TPPs which is very relevant for densely
packed urban areas

 

Nationally,
gas based generation suffers huge economic loss due to inadequate supply and
very low plant load factor (PLF) of about 23% (2015-16) is observed due to
unavailability of natural gas (CEA, 2016). As per
the World Bank’s world development indicators the gas based power share in
India is 7.7% compared to global average of 22% (CEA, 2016).

                                                                                                               

Also, it is also important to understand
what percentage of renewable electricity could be a realistic target to meet
Delhi’s electricity demand. Currently, under smart city mission, the New Delhi
Municipal Council (NDMC) is proposed to lease rooftops for setting up rooftop
solar. Roofs are private property which adds to challenging situation and
public participation is required for uptake of rooftop solar.

Following actions are required for prioritising clean fuel for
power generation-

                                                       

a.   
Provide
a push to cleaner power generation in NCR by notifying priority status for gas-based
power generation (Short-term):

 

Notification to Northern
Region Load Dispatch Centre (NRLDC) to provide the priority status to natural
gas based generation in Delhi NCR, by making sure that gas based generation is
granted a must?run status and is not subjected to merit order dispatch

 

 

b.   
Amend
the Indian Grid Electricity Code (2010) giving priority to cleaner sources of
power generation (Long-term):

                                                                                      

Amend the Indian Grid
Electricity Code (2010) by mandating the natural gas based plants as “must-run”
in dense urban agglomeration (not
subjected to the merit order dispatch), based on their environmental advantage
over other fossil fuel based power plants to provide cleaner power.

 

 

c. Provide priority support to stranded gas based generation in NCR
and other dense urban agglomerations in line with the national schemes

 

The
Ministry of Power launched the “Scheme for utilisation of gas based generation
capacity” in 2015 which provides financial support to gas-based stranded power.
This financial support is in the form of waiver on custom duty for imported
LNG, reduction in pipeline tariff charges, exemption of transmission charges
and support from Power System Development Fund (PSDF). Outlay of this support
was fixed at INR 3500 Crores and INR 4000 Crores for year 2015-16 and 2016-17.
In line with this scheme following recommendations are made-

 

It is recommended that in
line with the scheme for financial support to gas based generation (in FY
2015-16 and 2016-17), a long term scheme is formulated (in line with the
recommendation of the draft National Electricity Plan of CEA in 2016) for
supporting the stranded capacities in coming years and priority support is
provided under the such scheme to the stranded gas based power plants located
in and around dense urban agglomerations.

 

 

d. Increase uptake of solar rooftop in Delhi by scaling up
existing schemes

 

The target share of renewable electricity is
19.75% (with 8.75% solar) for 2019-20 as per the latest DERC regulation (draft order
in Aug 2017) with immediate target for 2017-18 as 14.25% (with 4.75%
solar).
These targets
seem to be ambitious as total renewable electricity procured by DISCOMs in
2016-17 was 9% but more understanding of issues and challenges faced for its
increased uptake of rooftop (RT) solar is required. Broad
estimates suggests that uptake from the existing ground work could result in
addition of 3000 MW solar roof top capacity in Delhi by the year 2022 (MNRE, 2017).

 

The
New Delhi Municipal Council (NDMC), has jurisdiction over central Delhi with
all major office establishments of central government are located along with key
central business district of the city. It aspires to source 70% of its total
energy from renewables by 2025 as part of the Smart Cities Initiative (MoUD, 2017). NDMC area
spreads across 43.7 km2 area which is merely 3% of the National
Capital Territory (1483 km2) and is very miniscule compared to NCR
(53,817 km2­) (NCRPB, 2017).

 

It is recommended that learning
from initiative are replicated in the colonies of three Municipal Corporations
of Delhi (MCDs) and other major urban areas within NCR in order to promote
clean fuels across NCR and have a wider impact.  

 

 

3.3 Clean Fuels for Transportation

                                                                                                 

Fuel
quality has direct link to the emissions from vehicles. During the discussion
in task force meeting, it was agreed that if NCT of Delhi can move to BS-VI
compliant fuels without any change in current vehicle technology, it would be
beneficial to improving air-quality of Delhi.. The BS-VI fuel offers
significant advantages compared to BS-IV fuel being used today including
reduced sulphur (80% reduction) content and reduced polycyclic aromatic
hydrocarbon (PAH) (27% reduction) content (See Annex 2 for more details) (ACEA; Alliance; EMA; JAMA, 2013; IOCL, 2017).

                                                                                    

The
present fuel demand in Delhi NCR is found to be 6.2 million tonne for diesel
and 1.98 million tonne for MS (IOCL, 2017).
The BS-VI fuel can alleviate the vehicular pollution and should immediately be
made available in Delhi. It was recommended by the task force that the
technical feasibility for sourcing the required fuel should be explored and the
cost of sourcing BS-VI fuels for Delhi can be absorbed on national market.
Capacities of two major OMCs have therefore been assessed with this purpose-

·        
The IOCL’s combined annual capacity in the
region (Panipat and Mathura refineries) for BS-VI compliant fuel is presently
found to be only a fraction of this demand (0.22 million tonne – diesel and
0.39 million tonne – MS). As per IOCL, BS-VI projects for both the refineries
will be complete by the end 2019 and hence, in view of this timeline it will be
difficult for IOCL alone to cater to the demand of Delhi.

·        
Reliance India (RIL)
has capacity in excess to Delhi’s demand for transport fuels. It is found that
RIL’s combined capacity to provide BS-VI fuels, at two of its refineries, is 24
million tonne High speed diesel (HSD) and 10.8 million tonne MS. But it would
need assurance for logistic support from the government for supplying the fuel
in Delhi. 

The feasibility for supplying
BS-VI fuels to meet Delhi’s demand has been assessed by the Centre of High
Technology (CHT) in consultation with Oil Marketing Companies (OMCs) and
accordingly, the task force makes following recommendation:

a.    Prepone the
introduction of BS-VI compliant fuels in Delhi and NCR:

 

It has been assessed by IOCL that if BS VI fuels are made
available in Delhi and NCR before the expected date (1st Apr 2020),
the emissions from all the in-use vehicles would reduce thereby lowering the
emission load of all existing vehicles in the NCR. It has been agreed by the
task force that BS VI compliant fuels can lead to improvements in air quality
and should be adopted on earlier date. The logistic arrangements for supply of
BS VI fuels have been assessed by CHT in consultation with OMCs and
accordingly, it is recommended by the task force that
supply of BS VI fuels is preponed in Delhi and NCR. Task force recommends
supplying BS VI compliant fuels to Delhi by 1st April 2018 and to entire NCR
region by 1st April 2019.

 

 

 

Emerging
alternate fuel, especially those which can utilise existing piped gas
infrastructure are important for promotion of clean fuels in the city. Compressed
NG (CNG) as an auto fuel was introduced in Delhi due to its advantage of lower
emissions and better fuel economy. As emission control in diesel buses is
excessively difficult (CSE, 2017),
Delhi should go ahead with CNG buses in future till the BS-VI is fully implemented
and opportunities such as utilising existing gas piping infrastructure for
Bio-CNG can be explored in Delhi. However, Delhi needs further cleaner fuel
alternatives. The Indian Oil Corporation limited (IOCL) and Society of Indian
Automobile Manufacturer (SIAM) have collaboratively undertaken a pilot project
(sponsored by MNRE) on compact reforming process for Hydrogen and Compressed
Natural Gas (HCNG) blend, which envisages further lowering of the exhaust
emissions from CNG vehicles due to improved combustion characteristics of
resultant fuel blend (18 v/v % hydrogen in CNG, See Annex. 3 for more details).
HCNG can be used as a fuel for heavy duty engines after minor engine
optimisation. The test results with buses on a pilot scale indicate, on average2, 29%
reduction in CO emissions and 13% reduction in methane and total hydrocarbon
(THC) emissions whereas the specific fuel consumption is 2~3% lower than CNG.
The NOx emissions during the pilot tests with buses, however, increased by 40%
on average3. Comprehensive
testing with various vehicles indicate no clear trend (increase in NOx levels
in most of the cases except very few cases where NOx levels decrease) in NOx
reductions but consistent reductions in CO emissions across vehicles (SIAM, 2017). IOCL maintains that
these emissions can be brought under control tuning the engine and optimising air-fuel
ratio, ignition timings etc. These adjustments will reduce NOx emissions to at least
neat CNG levels if not lesser (IOCL, 2017). The technology
is ready for demonstration and is recommended by the task force for
implementation at one of the Delhi Transport Corporation (DCT) depots but several
challenges related to the implementation of new technology need to be addressed,
as outlined in the recommendations below.

 

 

b.   
Set
up an HCNG demonstration project at one DTC depot:

 

A single stage
compact reformer plant with 4 tonnes HCNG per day capacity is recommended to be
set up by IOCL at one of the DTC bus depots. This plant can fulfil the fuel
requirements of nearly half of the average bus fleet at such depot4.
The CAPEX of the plant is estimated to be 11.56 Crores (IOCL, 2017).
The OPEX is estimated at INR 6.8/ kg HCNG5.
Following actions are required for the proposed demonstration project at DTC by
IOCL-

 

 

             
I.       
Set
up compact reformer plant at one DTC depot

 

The
capacity of the unit would be 4 t HCNG/day (CAPEX: INR 11.56 Crores) which
can cater to the fuel demand of nearly half of the buses at the respective depot.
Time required for setting up compact reformer is 18 months.

 

           
II.       
Notify
HCNG as an automotive fuel

 

The Ministry
of Road Transport and Highways (MoRTH) will need to issue a notification for usage
of HCNG as an automotive fuel.

                                                                                              

          
III.       
Notify
standards for use of HCNG as a fuel:

 

The Bureau of
Indian Standards (BIS) will need to notify the HCNG fuel specifications

 

         
IV.       
Safety
Clearance for HCNG storage cylinder on vehicles:

 

IOCL will need
approval from Petroleum and Explosives Safety Organisation (PESO, formerly the
Department of Explosives) for using type-1 cylinders to store HCNG in vehicles.
Test results for type-1 fuel cylinder have already been submitted IOCL to PESO
(See Annex II and III, A3).

 

While discussing other clean fuel
options for vehicles, it is highlighted that existing vehicles can comfortably
handle up to 10% blending beyond which flex-fuel vehicles will be required. Currently
the supply of molasses based ethanol in the country is limited for achieving
higher blending targets. Flex-fuel vehicle roadmap is required in order to move
to higher blending targets. Also, biofuel blending would need to be harmonised
and standardised across the states. Move to bio-fuels is a long-term goal which
will require at least 3-5 years. Following recommendation is made in this
regard-

 

c.   
Achieve
10% ethanol blending in transport fuels, nationally, by 2022:

 

The options to
achieve a realistic target of 10% ethanol blending, harmoniously across the
nation, should be explored. The CHT may coordinate the task across OMCs
including the public sector and private OMCs. There should be strong
convergence between policies for promoting waste to energy from biomass and
blending targets.

 

 

d.   
 Formulate strategy for promoting LNG as transportation
fuel:

 

 

LNG in the
liquid form is the cleanest and economical transportation fuel being widely
used in countries like China & USA. Long-haul road transportation, inland
waterways & railways transportation are the two important areas where LNG
can be used as transportation fuel. One single LNG retail outlet station can
serve the purpose of providing LNG as well as LCNG to the range of automobiles
and provide substantial reduction in pollution arising out of vehicular
transportation. As compared to diesel, LNG can provide cost savings of at least
20% (GAIL, 2017a). However, requisite infrastructure
in terms of LNG/LCNG stations and supply chain logistics are required to be
developed for long-haul road transportation, inland waterways and railways
transportation. A strategy for promoting LNG as transportation fuel may be
formulated by the Government.

  

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