State-owned power producer NTPC Ltd has emerged as the only participant in the second round of applications for the government’s ₹37,500-crore coal and lignite gasification incentive scheme. According to the Union Coal Ministry, the state-run company submitted two applications during this round, proposing projects to produce urea, methanol, and dimethyl ether (DME). In the previous round, NTPC had sought incentives for a synthetic natural gas production project.
The government confirmed the receipt of these bids on Tuesday, even as it officially launched the third round of the rolling window for the scheme. This move provides a fresh opportunity for both public and private sector companies to propose new gasification projects. By contrast, the inaugural round of the incentive program saw a total of seven applications from five different companies, including Adani Enterprises, Gallantt Ispat, Shyam Sel and Power, and Talcher Fertilisers. Adani Enterprises had submitted three of those applications for urea production projects, while other proposals covered synthetic natural gas and direct reduced iron.
Coal ministry officials stated that these successive rounds aim to accelerate the adoption of surface coal and lignite gasification technologies. The national objective remains to achieve a total gasification capacity of 100 million tonnes by 2030. Industry experts, however, noted that the lack of private sector interest in the second round suggests that viability-gap funding alone may be insufficient to build a pipeline of commercially viable projects.
Atanu Mukherjee, CEO of Dastur Energy, explained that even commercially sound projects often struggle to secure financing because lenders remain cautious about construction, technology, and operating risks, particularly in the absence of domestic precedents. He suggested that the government could improve the uptake of the scheme by implementing a partial credit guarantee mechanism to help reduce financing costs and lower risks for potential investors.
Key facts
- The Union Cabinet approved the ₹37,500-crore coal and lignite gasification incentive scheme in May.
- NTPC was the sole applicant in the second round, submitting two proposals for urea, methanol, and dimethyl ether production.
- The first round of the scheme attracted seven applications from five separate companies.
- India has set a target to reach 100 million tonnes of coal gasification capacity by 2030.
- The Coal Ministry announced the launch of the third round of the incentive program on Tuesday.
Why it matters
The success of the national coal gasification program is being measured by the industry's ability to create a fleet of commercially viable projects rather than the mere number of applications received. Experts suggest that the government must focus on standardizing modular designs and utilizing proven technologies suited for India’s high-ash coal to reduce investment risks and improve the economic viability of future projects.
Source: Times of India, The Hindu
Comments