India’s energy demand is expected to grow at 4.2 per cent each year over the next 25 years. The push for city gas expansion is a part of the government’s plan for raising the share of natural gas in the country’s energy basket from the current 6.3 per cent to 15 per cent by 2030.
The typical cost break-up of any city gas distribution (CGD) project has 55 per cent pipeline network, 25 per cent land costs, 10 per cent city gate station, 5 per cent compressed natural gas (CNG) infrastructure cost and 5 per cent district regulation station cost. Lately, cost competitive alternative fuels like hydrogen enriched natural gas, bio-CNG, and simulated natural gas have been introduced. Electric vehicles are also emerging as alternative mode of transportation which provide better cost savings than CNG. Many new business models have also been introduced to enable cost savings. These include, the Dealer Owned Dealer Operated (DODO) model, liquid to CNG model etc. The new business models not only help in cost savings but also reduce the emissions, thereby helping the government reach its goal of zero emissions.
In the 16th edition City Gas Distribution in India virtual conference organised by India Infrastructure Publishing, Shirish Swami, Technology Principal, TCE made a presentation on the cost economics and emerging business models in CGD sector.