Cabinet Approves Incentive Scheme For Coal Gasification Projects
By : Madhusudan Sahoo
Update: 2024-01-24 14:39 GMT
New Delhi: The Union Cabinet on Wednesday approved Rs 8,500-crore incentive scheme for coal gasification projects. The adoption of gasification technology in India is expected to reduce the country’s reliance on imports of natural gas, methanol, ammonia and other essential products. The government is targeting to gasify 100 million tonnes (MT) of coal by 2030, according to an official statement issued by the government.
Announcing the decision, coal minister Pralhad Joshi told reporters here that it was taken during the cabinet meeting under the chairmanship of Prime Minister Narendra Modi. “We went to the cabinet and we have sanctioned an outlay of Rs 8,500 towards incentive for coal gasification projects. The financial assistance has been made under three categories,” the minister said.
Giving the break-up of the categories, the official statement, however said that in category I, Rs 4,050 crore provisioned for government PSUs in which upto 3 projects will be supported by providing lump-sum grant of Rs 1,350 crore or 15 percent of capex, whichever is lower. “In category II, Rs 3,850 crore provisioned for private sector as well as PSUs in which lump-sum grant of Rs 1,000 crore or 15 percent of capex, whichever is lower, is provided for each project,” it said.
It further added that at least one project will be bid out on tariff-based bidding process and its criteria will be designed in consultation with NITI Aayog. “In category III, Rs 600 crore provisioned for demonstration projects (indigenous technology) and/or small-scale product-based gasification plants under which lump-sum grant of Rs 100 crore or 15 percent of capex, whichever is lower, will be given to the selected entity who will have a minimum capex of Rs 100 crore and minimum production of 1500 Nm3/hr Syn gas,” it added.
In the gasification process, coal is partially oxidised by air, oxygen, steam, or carbon dioxide under controlled conditions to produce a liquid fuel known as syngas. Syngas or synthesis gas can be used for power generation and to make methanol as well. “The selection of entities under category II and III shall be carried out through a competitive and transparent bidding process. The grant will be paid to the selected entity in two equal instalments,” the statement said.
Announcing the decision, coal minister Pralhad Joshi told reporters here that it was taken during the cabinet meeting under the chairmanship of Prime Minister Narendra Modi. “We went to the cabinet and we have sanctioned an outlay of Rs 8,500 towards incentive for coal gasification projects. The financial assistance has been made under three categories,” the minister said.
Giving the break-up of the categories, the official statement, however said that in category I, Rs 4,050 crore provisioned for government PSUs in which upto 3 projects will be supported by providing lump-sum grant of Rs 1,350 crore or 15 percent of capex, whichever is lower. “In category II, Rs 3,850 crore provisioned for private sector as well as PSUs in which lump-sum grant of Rs 1,000 crore or 15 percent of capex, whichever is lower, is provided for each project,” it said.
It further added that at least one project will be bid out on tariff-based bidding process and its criteria will be designed in consultation with NITI Aayog. “In category III, Rs 600 crore provisioned for demonstration projects (indigenous technology) and/or small-scale product-based gasification plants under which lump-sum grant of Rs 100 crore or 15 percent of capex, whichever is lower, will be given to the selected entity who will have a minimum capex of Rs 100 crore and minimum production of 1500 Nm3/hr Syn gas,” it added.
In the gasification process, coal is partially oxidised by air, oxygen, steam, or carbon dioxide under controlled conditions to produce a liquid fuel known as syngas. Syngas or synthesis gas can be used for power generation and to make methanol as well. “The selection of entities under category II and III shall be carried out through a competitive and transparent bidding process. The grant will be paid to the selected entity in two equal instalments,” the statement said.