Welcome readers, in this report we will be discussing the efforts made by the government to provide support for setting up coal gasification plants. The government has implemented concessions in revenue share for commercial auction of coal blocks, and has also proposed giving freedom to Coal India Limited to use coal for its own gasification projects.
By Rusen Kumar
1. Introduction
Indian Prime Minister Narendra Modi has outlined four pillars for country’s energy future: Energy Access, energy efficiency, energy sustainability and energy security. The Indian government is taking an integrated approach to energy planning to provide affordable energy while reducing carbon emissions. Currently, the country is dependent on coal and imports of oil and natural gas for its energy supply. In recent years, there has been a significant emphasis on renewable energy derived from solar and wind power to reduce energy import dependence and meet greenhouse gas emissions targets.
2. What is Gasification?
Gasification is a process that converts carbonaceous materials, such as coal, petroleum coke, and biomass, into carbon monoxide and hydrogen-rich gases, called syn gases. Coal gasification as a power-generation technology, integrated gasification combined cycle (IGCC), is gaining popularity due to the ready global availability of the raw material (coal) and positive environmental issues associated with this technology over other combustion technologies. Syngas derived from gasification processes contains a significant amount of hydrogen (H2), which can be increased through water gas shift (WGS) and be readily separated into a pure H2 product meeting industry product quality standards.
3. Challenges in India
However, the high ash content of Indian coal is a crucial barrier in the development of suitable technology. Gasification had commercial implementations in India mainly for the production of chemicals/fertilizers. Many of the coal-based gasifiers had ceased operations due to problems related to the quality of coal. Recently, Jindal Steel and Power Ltd. (JSPL) have set up the first coal gasification-based direct reduced iron (DRI) and steel production plant at Angul, Odisha. However, they are also facing problems in their Lurgi Fixed Bed Dry Bottom (FBDB) gasifiers with coals beyond 30% ash. A joint venture of Coal India Ltd. (CIL), Gas Authority of India Ltd. (GAIL), Rashtriya Chemicals and Fertilisers Ltd. (RCF) and Fertiliser Corporation of India Ltd. (FCIL) is in the process of establishing coal gasification plants for the production of ammonia and urea at Talcher, Odisha. However, addressing various operational issues arising due to complex gasification behaviour with high ash Indian coal is the focal challenge for the successful implementation of the project.
4. Syngas Production and R&D Gasification in India
The Committee had the benefit of presentations made by various organizations on various technologies to produce syngas. The report also includes learnings from recent R&D gasification projects executed in the country for conversion of coal to methanol which were awarded by DST to IIT Delhi -Thermax, CIMFR and BHEL R&D. The EIL R&D also has experience on the gasification technology based on a pilot plant built up by them.
5. Gasification Technologies
In India, RIL had set up huge gasifiers for pet-coke gasification in which they are also producing hydrogen. IOCL R&D also has a patented technology based on which a pilot plant had been set up for co-gasification of coal, pet-coke and bio-mass. Among the three types of the gasifier, the Entrained flow gasifier is a matured technology but yet to be tested for high ash coal. Fixed bed gasification technology is also a developed one but restricted up to the coal of 35% ash. Fluidized bed gasifier seems to be suitable for high ash coal but not widely commercialised at this stage.
6. Selection of Type of Gasifier
Though, coal ash content is a crucial parameter, other properties such as cold and hot crushing strength, gasification reactivity & surface area, Ash Fusion Temperature (AFT), slag viscosity and behaviour, ash composition, caking nature, rank, and petrographic characteristics, etc. are also imperative towards selection of type of gasifier. Based on the presentations made by various organizations, the Expert Committee members are of the view that the fluidized bed gasifier appears to be more promising for Indian type of coal.
7. Support for Coal Gasification Plants
The government of India has provided support to the private and public sectors for setting up coal gasification plants through concessions in revenue share for commercial auction of coal blocks. A rebate of 50% on the revenue share quoted by the successful bidder will be allowed for the total quantity of coal consumed or sold for gasification or liquefaction, subject to certain conditions such as a minimum of 10% of scheduled coal production for that year being consumed or sold for gasification or liquefaction and Coal Controller’s certification for the quantity of coal used.
The Ministry of Coal has also proposed giving freedom to Coal India Limited to use coal for its own gasification projects and has introduced a separate auction window for allocation of coal linkage to coal gasification projects with a subsector for auction of coal linkages to the Non-Regulated Sector (NRS). The applicable floor price will be decided by CIL and SCCL and the Fuel Supply Agreements (FSA) may be for a complete tenure of 15 years.
8. Conversion of CO to hydrogen
In the commercial gasifiers, the syngas contains high amount of CO which can be converted to hydrogen by water gas shift reaction. This is an important reaction for extra hydrogen production from syngas. In this catalysed reaction, steam and CO react to produce H2 and CO2. The CO2 produced in this reaction will have to be captured and either stored underground or used in the enhanced oil recovery (EOR) or used for conversion to chemicals or used in beverages or fixed in the form of aggregates etc.
9. Removal of Impurities
Raw syngas produced from the gasifier contains fine ash, char, slag and acid gases that need to be removed prior to the downstream processing. Depending upon the configuration of coal gasifier used and its operating conditions, typically 3 to 10% of the sulphur present in coal is converted to carbonyl sulphide which is converted to H2S by catalytic hydrolysis process and then H2S is removed by downstream acid gas removal unit. Further, we also need to remove mercury and other impurities through various processes which are commercially available and documented in this report.
Subsequently, after the removal of acid gas components from the shifted syngas it contains mainly hydrogen in which some impurities like CO, CO2, H2S/SO2 may be present in minute amount which can be removed through the pressure swing adsorption as well as membrane technology which are commercially available.
10. CCUS for Producing Blue Hydrogen
Carbon capture utilization and storage (CCUS) technologies have the potential to enable the conversion of brown hydrogen to blue hydrogen, which is more environmentally friendly. The production of blue hydrogen may come at a higher cost than brown hydrogen, but it is still cheaper than green hydrogen in the current state of technology.
11. Hydrogen Demand in India
India currently has a hydrogen demand of 6.7 million tonnes per year, with the largest consumers being refineries and fertilizer plants. Most of this hydrogen is currently produced from natural gas as grey hydrogen. However, refineries have plans to use CO2 for conversion to chemicals and becoming net zero refineries. By 2030, the demand for hydrogen is expected to increase to 11.7 million tonnes, and by 2050, it is expected to reach 28 million tonnes, particularly for green hydrogen.
12. Production of Blue Hydrogen
With plans for decarbonization of various sectors, the demand for hydrogen will continue to increase. One way to meet this demand is to produce hydrogen from coal along with CCUS, which would enable the production of blue hydrogen (without carbon emissions) from indigenous sources rather than imported natural gas. This would provide opportunities for the utilization of hydrogen produced from coal in the refineries, fertilizer units, steel plants, and transport sector, among others.
13. Coal Gasification Units
It is suggested that coal gasification units be established near the hydrogen demand centres and/or near the coal mines. The cost of transportation of hydrogen may be more at present, and hence, the economics of the location of gasification plants should be examined. Alternatively, plants could be established closer to the natural gas grid, so that hydrogen can be injected into natural gas pipelines to some extent, up to 18-20%, without the need for modifications to the pipelines.
14. Demonstration Projects
The Committee suggests that India should aggressively pursue the option of producing hydrogen from domestic coal, by setting up a couple of semi-commercial/demonstration gasification units for conversion of coal to hydrogen. Additionally, integrating CCUS units along with gasification will produce blue hydrogen, which is more environmentally friendly and will help to reduce overall CO2 emissions. A detailed life cycle assessment study can be undertaken to assess the overall impact.
15. Conclusion
Gasification is a promising technology for the generation of power and production of chemicals and fertilizers in India. However, the high ash content of Indian coal poses significant challenges in the development of suitable technology. Addressing these challenges is essential for the successful implementation of coal gasification projects in India. The Indian government’s focus on renewable energy and reducing energy import dependence makes it imperative to find solutions to these challenges to ensure energy access, efficiency, sustainability, and security for the nation’s growing economy.
The production of blue hydrogen from brown hydrogen using CCUS technologies is a promising solution to meet India’s increasing hydrogen demand. By establishing coal gasification units near demand centres or natural gas grids, and incorporating CCUS units, hydrogen can be produced in a cost-effective and environmentally friendly manner. The Committee suggests that India should pursue this option as part of its overall hydrogen ecosystem, and set-up demonstration projects to assess the feasibility of commercial upscaling.
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Promoting Clean Coal Technology: Coal Gasification
The Ministry of Coal, Government of India, is steadfast in its efforts to promote coal production and ensure surplus supply, while transitioning towards cleaner energy alternatives like solar, wind, and hydroelectric power, recognizing the need to address environmental concerns and reduce carbon emissions. At the forefront of promoting clean coal technology, particularly coal gasification, the Ministry aligns with the Government’s vision of fostering a resilient and sustainable energy ecosystem. Coal plays a pivotal role in India’s energy system, accounting for nearly 70% of the total electric generation. It is also a critical input in various industries such as steel, sponge iron, cement, and paper. And because of initiatives like ‘Make In India’, the Ministry anticipates increased demand and higher economic growth projections, Government of India said 06 March 2024.
To introduce clean coal technologies, the Government has launched several clean coal initiatives, including the Coal Gasification Mission. It aims to gasify 100 million tonnes of coal by 2030 through surface coal/lignite gasification projects. The Ministry highlights collaborative efforts in advancing Surface Coal Gasification (SCG) projects in Coal India Limited (CIL) coalfields. Notably, strategic bilateral agreements were executed in October 2022, including a Memorandum of Understanding (MoU) between BHEL & CIL, as well as an MoU between IOCL, GAIL & CIL, aiming to foster cooperation and expertise in driving the implementation of SCG projects.
To support these initiatives, a financial assistance scheme has been proposed to promote Coal/Lignite Gasification Projects by Government PSUs and the Private Sector, with an allocation of Rs. 8500 crores for incentives towards coal gasification projects. The scheme aims to demonstrate the financial and technical viability of gasification projects, accelerate markets for downstream products, and create an additional value chain in the economy for coal.
Significant strides have been made through joint venture agreement (JVA), wherein Government has approved the equity investment proposal by CIL in JVs of CIL-GAIL and CIL-BHEL. The JV Agreement has been formally signed between CIL and Bharat Heavy Electricals Limited (BHEL) for setting up an ammonium nitrate plant through coal gasification (SCG), which is poised to revolutionize indigenous technology, at Lakhanpur area of Mahanadi Coalfields Limited, Odisha.
The upcoming plant as backward integration would help in securing the raw material, reducing import dependency of ammonium nitrate and promoting Atmanirbhar Bharat Abhiyaan. Additionally, Joint Venture Agreement is under consideration between Coal India Limited (CIL) and Gas Authority of India Limited (GAIL). The agreement aims to establish a Surface Coal Gasification (SCG) project at Eastern Coalfield Limited (ECL) and is expected to be signed shortly.
The adoption of gasification technology in India will revolutionize the coal sector, reducing reliance on imports of Natural Gas, Methanol, Ammonia, and other essential products. It will contribute to India’s vision of becoming Aatmanirbhar and create a surge in employment opportunities. The implementation of coal gasification is expected to make significant contributions to the nation’s development by reducing imports by 2030.
The Government is also actively engaged in clean coal initiatives such as extraction of Coal Bed Methane (CBM) gases, exploring Coal to Hydrogen, Carbon Capture and Storage (CCS), Coal beneficiation through washeries, etc. to mitigate emissions and enhance environmental sustainability. Investing in research and development is also prioritized to enhance coal utilization efficiency and develop innovative technologies, thereby ensuring their long-term competitiveness and sustainability.
The Ministry of Coal remains committed to promoting coal gasification projects, which hold immense potential for transforming coal into various valuable products. The proposed scheme and incentives are designed to attract Government PSUs and the Private Sector, fostering innovation, investment, and sustainable development in the coal gasification sector.
(About the Author: Rusen Kumar, India CSR)
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