Rajesh Shah, Chief Executive Officer, SWCOGEN, Sterling and Wilson.
What is the current scenario for cogeneration in India?
The gas-based cogeneration in India is still a challenge because of gas pricing. Currently, it is difficult to motivate the consumer to go for the gas- based combined heat and power (CHP) option. Except for fertilisers and oil & gas companies, we are not seeing much except for those installed before.
What is opening up in the northern region is standby application, because of the shift from diesel, there is bit of a growth. But the CHP has not picked up.
Cogeneration means bagasse-based. Do you think the industry has shifted towards gas as a fuel?
Traditionally at the policy level, co-generation is defined as bagasse based generation with steam turbine. While it is a very old system, it is understood at the industry level that the co generation can be gas-based. But, in the official books only if the cogeneration is bagasse based, then you get depreciation. But at the user level, it has changed.
Throw some light on the gas supply constraints?
I think there are well-laid pipelines on the ground. The question is all around the utilisation policy, the priority for the industry. If that is activated, the industry will pick up.
It should be declared that the first use of gas after domestic use, should be for cogeneration. If that happens, India will take full benefit of the cogeneration facilities that we have for captive power or captive CHPs. Primarily, the decentralised cogeneration takes off the load from the grid, which will be a great step.
How conducive is the policy and the regulatory environment for co-generation in India?
It is a global scenario and not pertaining to India alone, countries are overwhelmed with renewable, which is a good thing to do. We should harness all the opportunities available through renewables. What needs to be done is that we should look at co-promoting the base-load cogeneration opportunities. One way or the other it is necessary to burn fuel for heat generation. Once you are burning fuel for heat generation, it is better to make power as a by-product out of it. Co-promotion can bring in a fantastic balance between CHP and renewables. The significant benefit would be that you will have a stronger grid. That would be very useful for India which by far is an industrial country and hence offers tremendous CHP/cogen opportunity.
What is your expectation for the next three years for cogeneration market?
The time has come considering the momentum in industrial growth. Parallel to the service sector and some of the other sectors, we will see a push in the industrial growth momentum, with Make in India and several other policies. Cogen or CHPs with natural gas as a fuel bring in more benefits, as they help in reducing CO2 emissions by almost 30 per cent.
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