Fueling The Future: How Natural Gas Is Driving Industrial Efficiency In India 

*This is in partnership with BloombergQuint Brand Studio

DLF’s iconic Cyber City in Gurugram is famed for many reasons. But not many are aware that that this landmark business district, spread across a sprawling 13.2 million square feet, is powered by electricity that is generated in-house using natural gas.

A captive power plant lodged in the basement of the Integrated Business District uses natural gas to generate power, which lights up the hub. This co-generation technology – where waste heat generated in power production is converted to chilled water through vapour absorption machines and then used to provide air-conditioning to consuming facilities – results in huge cost savings, which are passed on to DLF occupants.

A Pro-Environment Solution

This replacement of diesel with natural gas brings down emissions of pollutants like carbon dioxide and nitrogen dioxide by 25-30 percent, making gas a cleaner energy choice. With air-pollution reaching alarming levels in the country, this is, unarguably, a step in the right direction.

Natural gas is known for its clean-combustion characteristics—it emits fewer by-products into the atmosphere, making the air we breathe cleaner. It emits around 50 percent less CO2 than coal and 30 percent less than oil. Due to its positive impact on the environment, natural gas is fast becoming the go-to source of energy for many countries. And India is catching up fast.

Driving Cost Efficiency

This shift from liquid fuels to natural gas for generating electricity as well as cooling systems is quickly catching on with hotels, hospitals, malls, airports and large industrial parks across the country, driving big savings on the energy bill.

Take, for instance, the case of a large luxury hotel in the capital, which uses energy drawn from electricity to run cooling systems and to provide hot water in rooms, kitchens, and for laundry services.

“Let us assume that there is a load of 3 MW—1 MW towards each of these functions. In a normal scenario, the hotel would make use of electricity sourced from a central grid for all three functions,” said Saurabh Kumar, Managing Director, Energy Efficiency Services Ltd., an energy company promoted by the Indian government that focuses on solution-driven innovation to help industries manage their energy needs through energy-efficient technologies.

“We are establishing a 1.5 MW gas engine in the premises which will be powered by natural gas from a pipeline similar to what we have in homes. The gas will be used to generate electricity and the waste heat let off in the process will be converted into cooling using a vapour absorption machine. This will power the hotel’s cooling systems,” Kumar explained.

EESL has recently started implementing their first project and feel the scope of this technology is immense in the country.

Industrial Optimization

The use of natural gas is not just limited to household purposes and as a cleaner fuel for automobiles. Many industries are switching to it as an alternative to conventional fuels to reduce their carbon footprint.

A pertinent case in point is that of Hindustan National Glass and Industries Ltd., one of India’s leading container glass solutions providers, which switched to natural gas to power its plants in several locations across India. This resulted in substantial savings as power costs are a big component in the company’s expense sheet. Natural gas is a lot more cost-effective than furnace oil and LPG.

Over the last few decades, awareness about the benefits of natural gas has risen globally. In India too, the demand for natural gas has seen a significant increase in the past few years owing to increased availability, improved infrastructure for transmission and distribution, air-quality benefits and cost savings compared to alternatives, and the overall favourable economics of supplying gas at reasonable prices to end-consumers.

India imports almost 45 percent of the natural gas it consumes. ExxonMobil has been one of India’s earliest energy partners—it pioneered the country’s LNG market and has since been a major supplier of gas to India. Recently, ExxonMobil forged alliances with local energy majors such as Indian Oil Corp. and GAIL India Ltd. to enhance India’s access to cleaner, affordable gas-based energy. With a long-term view of India’s need to tackle its dual challenge, the company is also investing in research with local knowledge partners, such as the IITs, to find low-emission solutions for India that could also be deployed globally. “As we develop successful energy solutions for India, we know that they can help lead the way for other developing nations,” says Bill Davis, Lead Country Manager, ExxonMobil, South Asia.

Fueling The Future

Under Prime Minister Modi, India targets increasing the share of natural gas in its overall energy consumption to 15 percent by 2030 from the current 6 percent.

To achieve this, new sectors in India should take advantage of the benefits natural gas can bring. The power sector (which consumes 31 percent of the local gas) could benefit from the synergies between increasing renewables and fast, flexible gas-fired power plants for reliable and cleaner power generation.

In the past few decades, natural gas has increasingly gained popularity among the masses. The city gas sector⁠—which caters to the everyday needs of households, small industries and transport—alone makes up for 22 percent of the total demand and continues to grow. In the industrial sector, large users like nitrogenous fertilizers already rely on natural gas, but its use could be expanded to other sectors to capture the benefits of higher efficiency, lower environmental footprint and, in many cases, displacement of less-affordable liquid alternatives.

“The need for a harmonious blend of availability and affordability of gas shall be the keys to consumer acceptability,” said Dr. Ashutosh Karnatak, Chairman and Managing Director, GAIL India, the country’s largest state-owned gas company.

The government has, in the recent years, invested heavily in transmission and distribution infrastructure and increased availability of natural gas in the country. A pipeline to east India, a heavily untapped market for natural gas so far, is also on the cards. As India focuses on addressing the major hurdles to unlocking its growth potential and reducing its carbon emissions, a bigger push for natural gas could be one of the keys to building a brighter energy future.

*Exxon Mobil Corporation has numerous affiliates, many with names that include, but are not limited to, ExxonMobil. For convenience and simplicity in this article, the term “ExxonMobil” and terms like “company” are used as abbreviated references to specific affiliates or affiliate groups.