Coal gasification scheme gets 7 bids, including NTPC, Adani

NEW DELHI: Centre’s Rs 37,500-crore scheme to promote surface coal and lignite gasification has received seven applications in its first round, with state-run NTPC and private sector major Adani Enterprises among those seeking to set up projects.Coal ministry said state-run NTPC has submitted an application for a synthetic natural gas project, while Adani Enterprises has proposed three urea projects. Gallantt Ispat has applied for a project to produce direct reduced iron and syngas, Shyam Sel & Power has proposed a syngas project and Talcher Fertilisers has sought to set up another urea project.The first round of applications closed on Sept 7. The ministry said the proposals will now undergo detailed evaluation under the scheme guidelines and the request for proposal.Union Cabinet had approved the scheme in May to promote conversion of domestic coal and lignite into higher-value products such as syngas, methanol, ammonia, urea and hydrogen, while reducing dependence on imports of LNG, urea, ammonia and methanol.The scheme is expected to support 75 million tonnes of coal gasification capacity and help achieve the national target of gasifying 100 million tonnes of coal by 2030. It is estimated to catalyse investments of Rs 2.5-3 lakh crore and create substantial employment across the value chain.Dastur Energy, a Texas-based energy technology consultant which has been closely involved in India’s coal gasification ecosystem, including advisory work around policy, technology selection and development of commercial-scale gasification projects, said the entry of large players such as Adani and NTPC was significant as it indicated that the scheme was beginning to be evaluated as a serious industrial investment proposition rather than only a policy-led initiative.“The strategic case is compelling: India has abundant domestic coal, while continuing to import significant quantities of gas, fertiliser feedstocks and other industrial molecules. Gasification creates an opportunity to convert a domestic resource into higher-value products and reduce part of that external dependence,” said Atanu Mukherjee, CEO, Dastur Energy.Mukherjee said the next phase will be determined by project economics. Gasification projects are capital intensive, and their bankability will depend on technology suited to Indian coal, scale, long-term product offtake, competitive financing and effective carbon management. Govt’s incentive framework can help absorb some of the early-stage risk, but ultimately these projects will have to demonstrate sustainable returns without being permanently dependent on subsidy.“If the first set of projects establishes that economic model, it could unlock a much larger investment cycle around coal-to-chemicals, gas, fertilisers and other industrial feedstocks, while strengthening India’s energy and raw-material security,” Mukherjee added.Get the latest Business News and Live updates. Download the TOI app.