New Delhi: Maharashtra-based New Era Cleantech is one of the first private sector companies in India to invest in coal gasification. Founded in 2022, the company is also aspiring to set up the country’s first dedicated 5 MTPA coal gasification plant which will not be used for captive consumption. PSU Watch spoke to Balasaheb Darade, the Managing Director (MD) of New Era Cleantech, to understand the opportunities that he sees for the company as he enters a sector which is new and sparsely populated but pivotal to India’s plans for using coal for the next three-four decades.
Despite Prime Minister Narendra Modi announcing in 2020 the target to gasify 100 MT of coal by 2030, India is yet to see coal gasification plants on the ground in the private or the public sector. This does not include two coal gasification plants run by Jindal Steel & Power Ltd (JSPL) and Reliance for their captive use.
According to Darade, coal gasification is a vital element of India’s energy transition, energy security and Atmanirbharta (self-reliance) journey as the only resource that India has is coal. He says that with the assurance of coal supply, and incentive schemes for both coal gasification and carbon capture, utilisation and storage (CCUS), the sector will take off and will also help India in deploying the green fuels of the future, like green hydrogen, menthanol, ethanol, etc.
Here are excerpts:
New Era Cleantech is setting up a 5-MTPA coal gasification plant in Chandrapur, Maharashtra. What is the update with respect to the plant? Where are things at?
We have signed an MoU (Memorandum of Understanding) with the Maharashtra state government at the World Economic Forum in Davos earlier this year. Prior to that, this project was sanctioned by the Maharashtra state Cabinet with a mega project status. And we have been allocated around 1,600-acre land by Maharashtra Industrial Development Corporation (MIDC). We are now waiting to receive coal linkage for our project. Our DFR is in process. And we have been actively looking for technologies in the ecosystem for carbon capture and blue hydrogen.
How soon do you expect to operationalise this plant?
About three years. Our environmental clearance is also in process. We expect to operationalise the plant in about three-to-four years.
When this plant comes up, what is the technology that it is going to be using?
We are still in the process of finalising a technology. We are looking at Japanese technologies, we are looking at American technologies, and also Chinese. So, we have MoUs signed with various technology providers. And our team has been doing simulation studies. After coal sample data is available, we will be able to finalise a technology for coal gasification.
And on Carbon Capture, Utilisation, Sequestration and Storage (CCUS) side as well, we have been looking at technologies nationally and internationally. What I can say is carbon capture and blue hydrogen are definitely focus areas for us.
Tell us about your plans for the company.
Along with our coal gasification project, we’re also planning on putting in place a Centre of Excellence, an Innovation Centre, where we can invite global players, academia and corporates to work on clean coal and energy transition technologies, such as coal gasification, CCUS and blue hydrogen.
Apart from coal gasification, we are also looking to focus on clean coal refineries. Because there are so many products that can be derived from coal. Coal-to-liquids. Coal-to-chemicals. Coal-to-petrochemicals. So, we’re going to have a multi-product strategy. We think that Atmanirbhar Bharat cannot be sculpted without coal gasification. This is vital for India’s energy security and energy transition.
Across the world, we are seeing global capital move away from coal and other fossil fuels. India’s energy transition journey is going to be different from that of the developed nations. But how are you planning your return on investment because you are putting money into a sector which is eventually poised for death?
India does not have enough oil or natural gas to meet its energy needs. The only resource that we have is coal. So, the solution is to find cleaner ways to use the natural resource that we have. That is, by using CCUS. Coal gasification is an important step in India’s energy transition journey. It can be leveraged to put in place the infrastructure required for large-scale deployment of green hydrogen even before green hydrogen becomes viable. We can use coal gasification and CCUS to make blue hydrogen, which can later be replaced with green.
As far as we are concerned, we are keeping a multi-feed strategy. For example, gasifying coal with bamboo pellets. There is technology available for it. And we have access to bamboo and forests because of our location. So, we are planning to use biomass, MSW etc as feedstock. We are very clear about the fact that we not only need to meet the current demand but also look into the future. We are focused on energy transition. And we want to use cleaner technologies.
In India’s energy transition journey, because demand is going to be so huge, there is room for robust growth in both conventional energy and renewable energy sectors. For example, if we have enough green hydrogen and we put it into syn gas, we get ethanol. Green hydrogen plus CO2 makes methanol. We are going to aid the transition journey (through coal gasification). We need to go about the transition in a practical and phased manner.
In India’s story, how long do you think coal will be relevant?
For at least 20-30 years.
Is your plant going to be India’s first dedicated coal gasification plant?
Yes, in a way. JSPL has a coal gasification plant but it is for captive use. And Reliance is doing petcoke gasification for its captive use.
So India has been talking about coal gasification for quite some time now. But the progress has been slow. Why do you think that is?
My quick answer to that question is that I see things moving now. And I feel that things will be moving faster going forward. And us coming into the picture and setting up a coal gasification plant will give confidence to other companies, including the public sector. So, it is a journey that we need to undertake together. There needs to be more public-private partnerships in these areas.
What kind of policy support does this sector require from the government right now?
So whatever policies are already in place, they need to be executed. That’s one. Secondly, the PLI/VGF scheme that we have been hearing about so far would be very welcome. But we need PLI schemes not just on the coal gasification side, but also on the CCUS side. And an offtake guarantee on the coal side. If the Prime Minister has announced a target of gasifying 100 million tonnes of coal by 2030, then that quantity needs to be reserved, kept aside, for the coal gasification industry. To begin with, at least 20 percent of that 100 MT should be reserved. That will give a lot of confidence to private players in the sector. And we want more and more private sector players to come into this sector because the opportunity is huge. If we are to achieve the target by 2030, then plants have to be announced by at least 2025. So, we have a limited window. People who wait will miss out on that opportunity.
What will your basket of products be when you start out?
Initially, it will be coal-to-syn gas. Then there are so many products that can be derived from syngas: Blue Hydrogen, chemicals like DME (Di-Methyl Ether), methanol, ammonia, ammonium nitrate, acetic acid, etc. Our teams are currently studying the feasibility. But we will have a multi-product strategy.
Which are the sectors from where you see demand emanating for all these products?
Chemicals. Fuels. Energy. Fertilizers. Petrochemicals. Di-Methyl Ether can be a replacement for LPG for both cooking and transportation purposes.
How will these products compete with those derived from natural gas?
Since we don’t have enough of natural gas, so, this is also a project of strategic importance to the country in terms of energy security, especially considering what is happening right now globally. And we think there is enough demand. So, we will be competitive.
What is your vision for New Era Cleantech going forward?
We want to be a key player in India’s energy transition story. As a company, we wish to make coal gasification a commercial reality in India, alongwith CCUS. And also move towards using coal as feedstock in refineries. We think coal-based refineries will be the future.
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