Highly has been assessed by IOCL and was noted

Highly polluting fuels1 such as petroleum coke (PC) and furnace oil (FO) are used byindustrial units, especially the Small and Medium Enterprises (SMEs), in thecountry.

Even some categories of waste such as tyre oil and used lubricants,which doesn’t fall under approved list of fuel (for their use) by regulatoryauthorities, are used as source of energy in some industrial units. Importsof PC has reached 14 million tonne in 2016-17 (Department of Commerce- GoI, 2017)which is a matter of concern. Countries like the USA and China have banned importof PC.

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As per the DPCC notification under the Air (Prevention & Control ofPollution) Act, use of PC is banned in Delhi2(DPCC, 1996).The ban on these fuels has further been extended by Supreme Court of India, tothe neighbouring states of NCR region, and the sale, distribution and use ofpet coke and furnace oil is prohibited in NCR from 1st Nov 2017.                                                                                                                            Also, it has been assessed by IOCL and was noted by the Task force thatremoval of Sulphur from PC/FO is not cost-effective. The estimated cost forproduction of 5000 ppm FO is around INR 40 per litre whereas the cost ofproduction for BS IV Diesel (50 ppm) is around INR 30 per litre (IOCL, 2017).Asthe use of PC and FO is already prohibited in Delhi NCR, it is recommended thatfuel substitution is facilitated by making sure that alternate fuel is availableand fiscal instruments are utilised to provide a policy push towards cleanerfuels.  LNG in the liquid form is the cleanest and economicfuel available as during the process of liquefaction of natural gas all theimpurities especially Sulphur gets removed completely and the product isdirectly imported as finished product. Due to the prevailing tax structure, thecurrent delivery prices of LNG are higher than the competing polluting fuelslike Furnace Oil and Pet Coke even though the imported price of LNG is 8-10%cheaper than Crude Oil (GAIL, 2017a).

Government’s Import bill can behence reduced by promoting LNG as fuel.Further, for other parts of the country where naturalgas pipeline/ CGD network availability is an issue, LNG supply throughcryogenic road tankers should be incentivized to make it competitive comparedto Furnace Oil & Pet Coke through cess on polluting fuels, lowerdifferential taxes on cleaner fuels and inclusion of LNG in GST.Followingactions are recommended for enabling the fuel switch in industrial units in NCR- a.   EnsureLPG and PNG supply to all designated industrial areas in Delhi NCR on an urgentbasis:                                                                                      GasAuthority of India Limited (GAIL) maintains that assessment for gas supply inDelhi NCR has been carried out (GAIL, 2017b).

Gas canreadily be supplied to industrial clusters except very thinly spread industry share of which is relatively small and operation would not beeconomically viable. Therefore, the task force recommends that LPG and PNGsupply to be ensured at the doorstep of all designated Industrial areas locatedin Delhi-NCR. It is also recommended that whenever PNG infrastructure isavailable in an industrial area, more polluting fuels may be removed from thelist of approved fuel list for that area in a time bound manner.

  b.    Better taxation strategy for cleanerfuels is required: Taxationand pricing strategy for clean fuels need to be prepared for providing impetusto cleaner fuels and discouraging the use of polluting fuels. Lower taxes onthe cleaner fuels are sought and GST can create a level playing field for differentfuels in the country.

It is recommended that MoPNG may undertake formulation ofstrategy along with the Ministry of Finance (MoF).                         d.   Notify the list of approved fuels in NCRregion                           It is recommended that the list ofapproved fuels is notified by concerned State Pollution Control Boards (SPCBs) inthe NCR region to curb the use of other dirty fuels which might be in use. CPCBshould ensure that concerned SPCBs issue notifications similar to the DPCCnotification1under the Air (Prevention & Control of Pollution) Act in 1996. DPCCindirectly banned the use of polluting fuels in Delhi by approving the use offuels with sulphur content only below 1.8% which is economically unviable forPC and FO. e. Facilitate City Gas Distribution (CGD) projects in adjoining NCR towns Government should facilitatecity gas distribution operations in all towns/areas falling under NCR, whereverPNG (Piped Natural Gas) supplies are currently not available.

Few such citiesor towns in NCR which do not have Natural gas distribution infrastructureinclude Hapur, Bulandshahar, Baghpat, Mewat, Jhajjar, Bhiwani, Mahendragarh, Jind,Muzaffarnagar, Palwal etc.                                                                                       3.2 Clean Fuels for Power                                                                                      Althoughthere are no coal based Thermal Power Plants (TPPs) operational in Delhi,except one plant in Badarpur, there are 13 TPPs with capacity over 11000 MW ina radius of 300 km from Delhi (Mukesh Sharma & Dikshit, 2016).Additionally, the gas based plants in the region are highly underutilised. Thisdue to the regulatory procedures for power dispatch and fluctuation in gasprices which renders plant operation economically unviable. Currently,all renewable based power plants, except the biomass power plants andcogeneration plants, are treated as “must–run” power plants which means thatthey are not subjected to the merit dispatch order (owing to their infirmnature) (CERC, 2010).

Naturalgas based power plants fall under the merit dispatch order. Merit dispatchorder principle favours plants with cheapest variable cost per unit electricityand depreciated coal-based TPPs have advantage overgas-based power plants. As a result, natural gas power plants in Delhi are notable to run at full capacity. Gas based power can meet 50% of Delhi’s demandwhereas it is only meeting 20% of this demand presently (CSE, 2017). Hence the priority ranking of powerplants needs to be revised so that gas based generation enjoys the same statusas renewables for their ability to provide power with substantial reduction ontheir impact on air quality.

 Thegas based generation has several benefits over other conventional thermal powergeneration plants including-                                                              ·        Low emissions (0.30 tCO2/MWh)to atmosphere compared to coal (0.98 tCO2/MWh) or diesel (0.59 tCO2/MWh)and ability to provide clean electricity as a result·        Fast ramping capabilities of gas-basedgeneration (open-cycle gas power plants) for large-scale integration ofrenewables into the grid·        Gas-based power plants act aspeaking plants in the electricity system. Additionally, the Diesel generatorsused during peak hour power shortages are not only more expansive, they areenvironmentally more polluting (CEA, 2016) ·        Higher efficiency (55%), ingeneral, compared to coal-based TPPs (38-40%) and lower auxiliary powerconsumption (3% compared 8.5% in coal-based TPPs)·        Significantly lower land and waterrequirements compared to coal based TPPs which is very relevant for denselypacked urban areas  Nationally,gas based generation suffers huge economic loss due to inadequate supply andvery low plant load factor (PLF) of about 23% (2015-16) is observed due tounavailability of natural gas (CEA, 2016). As perthe World Bank’s world development indicators the gas based power share inIndia is 7.

7% compared to global average of 22% (CEA, 2016).                                                                                                                 Also, it is also important to understandwhat percentage of renewable electricity could be a realistic target to meetDelhi’s electricity demand. Currently, under smart city mission, the New DelhiMunicipal Council (NDMC) is proposed to lease rooftops for setting up rooftopsolar. Roofs are private property which adds to challenging situation andpublic participation is required for uptake of rooftop solar.

Following actions are required for prioritising clean fuel forpower generation-                                                        a.   Providea push to cleaner power generation in NCR by notifying priority status for gas-basedpower generation (Short-term):  Notification to NorthernRegion Load Dispatch Centre (NRLDC) to provide the priority status to naturalgas based generation in Delhi NCR, by making sure that gas based generation isgranted a must?run status and is not subjected to merit order dispatch   b.   Amendthe Indian Grid Electricity Code (2010) giving priority to cleaner sources ofpower generation (Long-term):                                                                                        Amend the Indian GridElectricity Code (2010) by mandating the natural gas based plants as “must-run”in dense urban agglomeration (notsubjected to the merit order dispatch), based on their environmental advantageover other fossil fuel based power plants to provide cleaner power.   c. Provide priority support to stranded gas based generation in NCRand other dense urban agglomerations in line with the national schemes TheMinistry of Power launched the “Scheme for utilisation of gas based generationcapacity” in 2015 which provides financial support to gas-based stranded power.

This financial support is in the form of waiver on custom duty for importedLNG, reduction in pipeline tariff charges, exemption of transmission chargesand support from Power System Development Fund (PSDF). Outlay of this supportwas fixed at INR 3500 Crores and INR 4000 Crores for year 2015-16 and 2016-17.In line with this scheme following recommendations are made- It is recommended that inline with the scheme for financial support to gas based generation (in FY2015-16 and 2016-17), a long term scheme is formulated (in line with therecommendation of the draft National Electricity Plan of CEA in 2016) forsupporting the stranded capacities in coming years and priority support isprovided under the such scheme to the stranded gas based power plants locatedin and around dense urban agglomerations.  d. Increase uptake of solar rooftop in Delhi by scaling upexisting schemes  The target share of renewable electricity is19.75% (with 8.75% solar) for 2019-20 as per the latest DERC regulation (draft orderin Aug 2017) with immediate target for 2017-18 as 14.25% (with 4.

75%solar).These targetsseem to be ambitious as total renewable electricity procured by DISCOMs in2016-17 was 9% but more understanding of issues and challenges faced for itsincreased uptake of rooftop (RT) solar is required. Broadestimates suggests that uptake from the existing ground work could result inaddition of 3000 MW solar roof top capacity in Delhi by the year 2022 (MNRE, 2017). TheNew Delhi Municipal Council (NDMC), has jurisdiction over central Delhi withall major office establishments of central government are located along with keycentral business district of the city. It aspires to source 70% of its totalenergy from renewables by 2025 as part of the Smart Cities Initiative (MoUD, 2017).

NDMC areaspreads across 43.7 km2 area which is merely 3% of the NationalCapital Territory (1483 km2) and is very miniscule compared to NCR(53,817 km2­) (NCRPB, 2017).  It is recommended that learningfrom initiative are replicated in the colonies of three Municipal Corporationsof Delhi (MCDs) and other major urban areas within NCR in order to promoteclean fuels across NCR and have a wider impact.    3.3 Clean Fuels for Transportation                                                                                                  Fuelquality has direct link to the emissions from vehicles.

During the discussionin task force meeting, it was agreed that if NCT of Delhi can move to BS-VIcompliant fuels without any change in current vehicle technology, it would bebeneficial to improving air-quality of Delhi.. The BS-VI fuel offerssignificant advantages compared to BS-IV fuel being used today includingreduced sulphur (80% reduction) content and reduced polycyclic aromatichydrocarbon (PAH) (27% reduction) content (See Annex 2 for more details) (ACEA; Alliance; EMA; JAMA, 2013; IOCL, 2017).                                                                                     Thepresent fuel demand in Delhi NCR is found to be 6.2 million tonne for dieseland 1.98 million tonne for MS (IOCL, 2017).

The BS-VI fuel can alleviate the vehicular pollution and should immediately bemade available in Delhi. It was recommended by the task force that thetechnical feasibility for sourcing the required fuel should be explored and thecost of sourcing BS-VI fuels for Delhi can be absorbed on national market.Capacities of two major OMCs have therefore been assessed with this purpose-·        The IOCL’s combined annual capacity in theregion (Panipat and Mathura refineries) for BS-VI compliant fuel is presentlyfound to be only a fraction of this demand (0.22 million tonne – diesel and0.39 million tonne – MS).

As per IOCL, BS-VI projects for both the refinerieswill be complete by the end 2019 and hence, in view of this timeline it will bedifficult for IOCL alone to cater to the demand of Delhi. ·        Reliance India (RIL)has capacity in excess to Delhi’s demand for transport fuels. It is found thatRIL’s combined capacity to provide BS-VI fuels, at two of its refineries, is 24million tonne High speed diesel (HSD) and 10.8 million tonne MS. But it wouldneed assurance for logistic support from the government for supplying the fuelin Delhi.  The feasibility for supplyingBS-VI fuels to meet Delhi’s demand has been assessed by the Centre of HighTechnology (CHT) in consultation with Oil Marketing Companies (OMCs) andaccordingly, the task force makes following recommendation:a.    Prepone theintroduction of BS-VI compliant fuels in Delhi and NCR:  It has been assessed by IOCL that if BS VI fuels are madeavailable in Delhi and NCR before the expected date (1st Apr 2020),the emissions from all the in-use vehicles would reduce thereby lowering theemission load of all existing vehicles in the NCR.

It has been agreed by thetask force that BS VI compliant fuels can lead to improvements in air qualityand should be adopted on earlier date. The logistic arrangements for supply ofBS VI fuels have been assessed by CHT in consultation with OMCs andaccordingly, it is recommended by the task force thatsupply of BS VI fuels is preponed in Delhi and NCR. Task force recommendssupplying BS VI compliant fuels to Delhi by 1st April 2018 and to entire NCRregion by 1st April 2019.    Emergingalternate fuel, especially those which can utilise existing piped gasinfrastructure are important for promotion of clean fuels in the city. CompressedNG (CNG) as an auto fuel was introduced in Delhi due to its advantage of loweremissions and better fuel economy. As emission control in diesel buses isexcessively difficult (CSE, 2017),Delhi should go ahead with CNG buses in future till the BS-VI is fully implementedand opportunities such as utilising existing gas piping infrastructure forBio-CNG can be explored in Delhi.

However, Delhi needs further cleaner fuelalternatives. The Indian Oil Corporation limited (IOCL) and Society of IndianAutomobile Manufacturer (SIAM) have collaboratively undertaken a pilot project(sponsored by MNRE) on compact reforming process for Hydrogen and CompressedNatural Gas (HCNG) blend, which envisages further lowering of the exhaustemissions from CNG vehicles due to improved combustion characteristics ofresultant fuel blend (18 v/v % hydrogen in CNG, See Annex. 3 for more details).HCNG can be used as a fuel for heavy duty engines after minor engineoptimisation. The test results with buses on a pilot scale indicate, on average2, 29%reduction in CO emissions and 13% reduction in methane and total hydrocarbon(THC) emissions whereas the specific fuel consumption is 2~3% lower than CNG.

The NOx emissions during the pilot tests with buses, however, increased by 40%on average3. Comprehensivetesting with various vehicles indicate no clear trend (increase in NOx levelsin most of the cases except very few cases where NOx levels decrease) in NOxreductions but consistent reductions in CO emissions across vehicles (SIAM, 2017). IOCL maintains thatthese emissions can be brought under control tuning the engine and optimising air-fuelratio, ignition timings etc. These adjustments will reduce NOx emissions to at leastneat CNG levels if not lesser (IOCL, 2017). The technologyis ready for demonstration and is recommended by the task force forimplementation at one of the Delhi Transport Corporation (DCT) depots but severalchallenges related to the implementation of new technology need to be addressed,as outlined in the recommendations below.

  b.   Setup an HCNG demonstration project at one DTC depot:  A single stagecompact reformer plant with 4 tonnes HCNG per day capacity is recommended to beset up by IOCL at one of the DTC bus depots. This plant can fulfil the fuelrequirements of nearly half of the average bus fleet at such depot4.The CAPEX of the plant is estimated to be 11.

56 Crores (IOCL, 2017).The OPEX is estimated at INR 6.8/ kg HCNG5.Following actions are required for the proposed demonstration project at DTC byIOCL-               I.       Setup compact reformer plant at one DTC depot Thecapacity of the unit would be 4 t HCNG/day (CAPEX: INR 11.56 Crores) whichcan cater to the fuel demand of nearly half of the buses at the respective depot.Time required for setting up compact reformer is 18 months.

            II.       NotifyHCNG as an automotive fuel The Ministryof Road Transport and Highways (MoRTH) will need to issue a notification for usageof HCNG as an automotive fuel.                                                                                                         III.

       Notifystandards for use of HCNG as a fuel:  The Bureau ofIndian Standards (BIS) will need to notify the HCNG fuel specifications          IV.       SafetyClearance for HCNG storage cylinder on vehicles:  IOCL will needapproval from Petroleum and Explosives Safety Organisation (PESO, formerly theDepartment of Explosives) for using type-1 cylinders to store HCNG in vehicles.Test results for type-1 fuel cylinder have already been submitted IOCL to PESO(See Annex II and III, A3).  While discussing other clean fueloptions for vehicles, it is highlighted that existing vehicles can comfortablyhandle up to 10% blending beyond which flex-fuel vehicles will be required. Currentlythe supply of molasses based ethanol in the country is limited for achievinghigher blending targets. Flex-fuel vehicle roadmap is required in order to moveto higher blending targets. Also, biofuel blending would need to be harmonisedand standardised across the states. Move to bio-fuels is a long-term goal whichwill require at least 3-5 years.

Following recommendation is made in thisregard- c.   Achieve10% ethanol blending in transport fuels, nationally, by 2022:  The options toachieve a realistic target of 10% ethanol blending, harmoniously across thenation, should be explored. The CHT may coordinate the task across OMCsincluding the public sector and private OMCs. There should be strongconvergence between policies for promoting waste to energy from biomass andblending targets.  d.    Formulate strategy for promoting LNG as transportationfuel:  LNG in theliquid form is the cleanest and economical transportation fuel being widelyused in countries like China & USA.

Long-haul road transportation, inlandwaterways & railways transportation are the two important areas where LNGcan be used as transportation fuel. One single LNG retail outlet station canserve the purpose of providing LNG as well as LCNG to the range of automobilesand provide substantial reduction in pollution arising out of vehiculartransportation. As compared to diesel, LNG can provide cost savings of at least20% (GAIL, 2017a). However, requisite infrastructurein terms of LNG/LCNG stations and supply chain logistics are required to bedeveloped for long-haul road transportation, inland waterways and railwaystransportation. A strategy for promoting LNG as transportation fuel may beformulated by the Government.