Issuing a statement, the ministry of coal said that it has issued a three-draft request for proposals (RFPs) for consultation on the coal gasification scheme. As the ministry has already taken collaborative efforts in advancing surface coal gasification projects in Coal India Limited (CIL) coalfields, it aims to gasify 100 million tonnes of coal by 2030 through surface coal/lignite gasification.
“The Union cabinet had earlier approved an allocation of Rs 8,500 crore for incentives towards coal gasification projects, having three categories and the draft RFPs have been issued separately for each of the three categories. However, category I allocates Rs 4,050 crore to the PSUs to support up to 3 projects, offering a lump-sum grant of Rs 1,350 crore or 15 percent of the capital expenditure, whichever is lower,” the statement said.
“In Category II, Rs 3,850 crore is earmarked for both the private sector and PSUs, providing each project with a lump-sum grant of Rs 1,000 crore or 15 percent of the capital expenditure. Additionally, at least one project in this category will undergo a tariff-based bidding process. And in category III, it includes Rs 600 crore for demonstration projects and small-scale gasification plants, offering a lump-sum grant of Rs 100 crore or 15 percent of the capital expenditure to entities with a minimum capex of Rs 100 crore and minimum production of 1,500 normal meter cubed per hour of synthesis gas,” it said.
In a separate statement, the ministry also said coal plays a pivotal role in India’s energy system, accounting for nearly 70 per cent of the total electric generation. “It is also a critical input in various industries such as steel, sponge iron, cement, and paper and various measures have been taken to promote usage of clean technology in the coal sector,” it said.
The government has also approved the equity investment proposal by Coal India Ltd in JVs of CIL-GAIL and CIL-BHEL. The joint venture agreement has been formally signed between CIL and Bharat Heavy Electricals Limited for setting up an ammonium nitrate plant through surface coal gasification.