1 / 28

Role of Bio-Diesel in the growing energy demand scenario in India

Role of Bio-Diesel in the growing energy demand scenario in India. FEBRUARY 1 & 2, 2008, FICCI, NEW DELHI CLIMATE CHANGE & BIO-DIESEL 2008. 2.7. INDIA WILL BECOME THE THIRD LARGEST ECONOMY IN THE WORLD BY 2030 AND HAVE THE FASTEST GROWTH RATE. India has a robust future growth position .

tertius
Download Presentation

Role of Bio-Diesel in the growing energy demand scenario in India

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Role of Bio-Diesel in the growing energy demand scenario in India FEBRUARY 1 & 2, 2008, FICCI, NEW DELHI CLIMATE CHANGE & BIO-DIESEL 2008

  2. 2.7 INDIA WILL BECOME THE THIRD LARGEST ECONOMY IN THE WORLD BY 2030 AND HAVE THE FASTEST GROWTH RATE • India has a robust future growth position • GDP in trillion US$ • CAGR • Percent • FY 2030 (E) • FY 2005 (E) • US • 11.7 • US 2.2 8.2 • Japan • China 9.0 • Germany • India 1.2 • China • Japan 1.1 • India • Germany Source: World Development Indicators; Goldman Sachs, Dreaming with the BRICs: The path to 2050; IEA; UBS estimates

  3. Potential to be fourth largest energy consumer by 2020 Million tonnes of oil equivalent, 2020 US China Russia India Japan Canada Germany INDIA IS EXPECTED TO BE THE WORLD’S FOURTH LARGEST CONSUMER OF ENERGY BY 2020 Oil consumption likely to substantially increase by 2020 2020 forecast oil consumption in mtpa US China Japan India Russia Brazil Germany Source: IEA; BP Statistical Review of World Energy 2004; Project BRICS-Relative attractiveness of downstream markets

  4. 1 • 79% • 71% • 73% • 71% • 82% INDIA WILL HOWEVER NEED TO RELY HEAVILY ON CRUDE IMPORTS TO SATISFY THE DEMAND FOR OIL Million tonnes per year (mtpa) • 225 • 182 • 152 • 124 • 113 • Net import • Production • 2000 • 2005 • 2010E • 2015E • 2020E • % imported • Strong demand growth expected in next 10-15 years • Flat domestic production far from sufficient to cover demand • Import to make up over 80% of demand by 2020 Source: FACTS 06 Fall; BP; EnergyFiles; Wood Mackenzie

  5. 13.2 BIO-DIESEL CAN PLAY AN IMPORTANT ROLE IN THIS SCENARIO • Drivers for bio-diesel adoption • Description • Supply security through reduction in crude imports • Bio-diesel can reduce crude imports by 5% in 2015 and 10% in 2020 (assuming a 10 % blending mandate and 20% blending mandate in 2015 and 2020 respectively) • Rural empowerment • Bio-diesel value chain can create up to 9 million jobs in rural areas as early as 2015 • Low environmental impact • Bio-diesel production process is eligible for carbon credits (CERs) under Kyoto Protocol’s Clean Development Mechanism (CDM) scheme. • Bio-diesel is less polluting and eco-friendly than conventional fossil fuels

  6. 1 • 75% • 71% • 73% • 71% • 76% BIO-DIESEL CAN PLAY AN IMPORTANT ROLE IN REDUCING CRUDE IMPORTS Million tonnes per year (mtpa) • 225 • 182 • 152 • 124 • 113 Bio-Diesel substitution • Net import • 18 • 7 • Production • 2000 • 2005 • 2010E • 2015E • 2020E • % imported Reduction in crude imports by 5% by 2015 and 10% in 2020 (assuming a 10 % blending mandate and 20% blending mandate in 2015 and 2020 respectively) can be achieved through Bio-Diesel Source: FACTS 06 Fall; BP; EnergyFiles; Wood Mackenzie

  7. BIO-DIESEL HAS SIGNIFICANT ENVIRONMENTAL BENEFITS • Emissions are lower compared to conventional diesel • Units in per cent • 20% blending of Bio-Diesel • Total unburned Hydrocarbons • -30% • Carbon monoxide • -20% • Plant prevents soil erosion helps in nutrient replenishment of soil • Leaves, flowers and barks can be used for medicinal purposes • Particulate matter • -22% • NO2 • -+2% • Sulphates • -20% • PAH (Polycyclic aromatic hydrocarbons) • -20% • Nitrated PAH • -50% • Ozone Potential of Speciated HC • -10%

  8. Key initiatives BPCL’S EFFORTS IN THE BIO-DIESEL CHAIN • Phase 3(2009-2015) • Phase 2 (2008-09) • Phase 1(till 2007) • Partnerships with State Governments with high activity in Jatropha and Pongamia cultivation for large scale commercial play in the Bio-Diesel Value Chain • Initial commercial efforts for entering in the Bio-Diesel Value Chain in collaboration with State Governments and other partners • Pilot efforts in Jatropha cultivation in BPCL owned tracts of land across the country • Over 600 acres brought under Jatropha cultivation. • 100,000-200,000 acres to be brought under Jatropha cultivation • Over 1 million acres to be brought under Jatropha cultivation to produce 1 million tonnes of Bio-Diesel by 2014-15

  9. 13.2 • 3 • 2 • 1 • Farming • + • Production • + • Marketing • Production • + • Marketing • Marketing A FULLY INTEGRATED PLAY IS REQUIRED FOR SUCCESS IN BIO-DIESEL • Rationale • Bio-Diesel Value Chain : Business Model • Jatropha • farming • The rural community in India are lacking in perception to raise suitable crops upon waste and barren lands. • Union Govt. through NREGS is keen to uplift the standards of such farmers by encouraging them to take up the Jatropha Cultivation Activity. • Such Programmes can be effectively implemented under the P3 model (Private, Public, Panchayat ) with the active involvement of established Companies in diversified areas. • Integrated play • Seed collection, oil extraction and esterification • Blending and Marketing

  10. BIO-DIESEL VALUE CHAIN : KEY ACTIVITIES • Identification / Allocation of waste / fallow Land in large chunks for Jatropha Cultivation by Local Panchayat / Collector / State Government. • Cultivation of Hybrid High Yield Jatropha in a phased manner @ few lakh acres per year. • Fruit / Seed produce Collection network. • Setting up of Oil extraction plants / Solvent extraction plants. • Setting up of Trans-esterification Plants. • Distribution & Logistics, Blending & Marketing of Bio-Diesel.

  11. 19.7 OPERATION MODEL : BIO-DIESEL BUSINESS • Saplings developed in nursery • Glycerol • 10% • Seed cake • 70% • Bio-Diesel • 30% • Trans-esterification • Jatropha cultivation • Installations /Depots • Seeds (100%) • Farmers • Oil extraction • 3-4 year growing period (20-25 year life) • Marketing through ROs • Storage • Cost of operations + • 10% of chemicals • Revenue from carbon credits

  12. BENEFITS • Generation of Employment / Self Employment to Lacs of families of farmers • Huge area of waste land to be converted into productive use • Industrialization through investment of huge capital outlay in the State running into few thousand crores • Alleviation of poverty in rural areas • Soil and Water conservation • Breaking the cycle of drought

  13. BENEFITS-CONTD.. • Afforestation • Reduction of air pollution • Reduction of green house gases & Global warming mitigation • Curbing rural migration • Energy Security and Revenue generation to concerned State • Self Reliance of energy needs • Foreign Exchange Savings for the Country • Rural economy improvement

  14. SUPPORT FROM GOVERNMENT • Classification of Jatropha crop under Agriculture / Horticulture / Forest Depts. • Single Window facilitation through Bio-Energy Mission Cell or Renewable Energy Dept. created by various State Govts. in co-ordinating with all its concerned Departments at State / District level & upto Village Panchayat level • For smooth implementation of the entire Bio-Diesel Value Chain, and • To ensure strong bond between Village Panchayat and Entrepreneurs • Starting from land identification to collection of fruits from the allocated fields. • Assistance for identification and leasing on Long Term and or allocation of Suitable land for establishment of • Nurseries • Demonstration Units • Training Centres • R&D Centres • Seed collection Centres • Expelling Units • Trans-esterification Plants.

  15. SUPPORT FROM GOVERNMENT - CONTD.. • To extend the Transport Subsidy Scheme to facilitate the execution of this Project to the farmers as well as the Entrepreneurs. • To render support in terms of waiving state level taxation in the best possible manner. • To provide applicable subsides to the small industries in establishment of Oil Expellers and Solvent Extraction Units. • To render power tariff waivers for the expelling Units, S.E. Units and Trans-esterification Units. • The non-edible oilseeds cannot be marketed / used / consumed directly without a complex transesterification refining process. Therefore, the respective State • Govts. may issue an Executive Order to exempt this transaction from the purview of the State Mandi Act, thus facilitate procurement of the non-edible oilseeds from the farmers directly by the Entrepreneurs.

  16. SUPPORT FROM GOVERNMENT-CONTD.. • Assist the Entrepreneurs in bringing awareness and Farmers mobilization for Jatropha cultivation, including development of village youths by bringing orientation and perception regarding the plantation activity. • Ensuring implementation of Government’s Employment Guarantee Scheme and all other relevant schemes to support farmers for Jatropha cultivation. • Convergence of various development schemes of State and Union Government for the benefit of this activity. • Entrepreneurs to be involved in the restructuring of the existing Advisory Body formed by various State Govts. for implementation of Bio-Diesel Value Chain in the respective States. • Facilitates formulation of Policies for Jatropha crop Insurance and also involve Banking Institutions to arrange soft loan to farmers.

  17. THANK YOU !

  18. BACK - UP

  19. POTENTIAL RURAL IMPACT ON INCOME AND JOBS CAN BE HIGH • 2015 substitution level* • Land under cultivation • Rural economic impact (Rs crore) • Multiplier effect • Total • Rural impact • Per cent • Million Acre • Income • Jobs • Rs crore • Million • 5 • (3-4.5%)** • 2 • 6750 • 4.5 • 3,375*** • 3.8-5 • 7.5-10 • 10 • (9-11%)** • 2 • 13500 • 9 • 6,750*** • 20 • 15-20 • (18-21%)** • 13,500*** • 2 • 27,000 • 18 • Maximum blending without any engine modification * Fossil diesel demand 75 million metric tonnes ** Percentage of 35-40 million hectares of wasteland that can be used for plantations *** Based on ~Rs.5-6 per kg of seeds contracts signed by blenders with farmers

  20. 0.05 • 2 • 1 • 3 3 ENABLING INTERVENTIONS ARE REQUIRED TO MAKE BIO-DIESEL A THRIVING INDUSTRY IN INDIA • National Board for development and execution of fuel policy • Policy on blending proportion of Bio-Diesel • Approach to creating “Bio-Diesel fund” to manage against crude fluctuations • Models of possible tri-partite contracts between farmers/villagers, the government, and the private producers (processors/blenders) that could be adopted to make significant acreage of Government owned wastelands for cultivation Public private partnership involving State Governments • On R&D on seed productivity-Create a dedicated Bio-fuel seed resource at Department of Bio-technology • Certification of seed quality and other farming standards • Ensure close involvement of Panchayats to gain farmer confidence Farmer insurance and financing and purchase guarantees • Coordinate policies to finance marginal farmers for wasteland cultivation *Source: Interviews, press searches

  21. 3,500-7,0002 • Japan • EU (2010-11) • Domestic 1 • 7,000-9,500* FURTHER, INDIA CAN CATER TO THE GLOBAL BIO-DIESEL DEMAND TO EARN SIGNIFICANT FOREIGN EXCHANGE • Bio-diesel demand • India’s share • Required supply • Implied forex inflows/savings • Tonnes million • Rs crore • Per cent • Million tonnes • 8-93 • 20-30 • 1.5-3 • Rs.13,000-17,000 crore foreign exchange opportunity • 3-4 • 100 • 3-4 • 2-3 • 0 4 • 0 • 0 1. Based on 5% blending at a diesel demand of 65-70 MMT 2. Based on Rs 18 sale price per litre 3. Net of EU internal production 4. Early indications are that Japan is likely to tie-up with Brazil for bio fuels 

  22. Total • 40.4 • Solid waste & biomass • 34.1 • Nuclear, hydro2 & renewables • 29.1 • Oil3 • Oil will contribute to at least 25% of total energy supplies even in 2020 • 24.0 • 22.2 • Natural Gas • Solid Fuel4 • 2002 • 2005 • 2010 • 2015 • 2020 OIL WILL CONTINUE TO BE A KEY SOURCE OF ENERGY EVEN IN 2020 Primary energy consumption by fuel Quadrillion BTU1 1 1 quadmillion BTU = 2.61 BSCFD of gas equivalent 2 Hydro includes geothermal renewables include solar, wind and tide, wave and ocean energy 3 Oil consumption includes international marine bunkers 4 Solid fuel consumption and imports include net imports of coke Source: DRI-WEFA World Energy Service forecasts

  23. JATROPHA PLANTATION : COST BREAK-UP : WORKING SHEET- I

  24. BIO-FUEL PLANTATION & PROJECT COST PROJECTIONS

  25. JATROPHA COST OF CULTIVATION PER ACRE IN NORMAL SOILS : SHEET - II

  26. SODIC & ROCKY SOIL TREATMENT SODIC SOILS: For making Sodic Soils suitable for the cultivation of Jatropha curcas Gypsum has to be added for amending the soil. Gypsum should be added @ 10 tons/acre. For that in addition to the cost of cultivation of Jatropha in Normal soils Rs.4000.00 per acre has to be incurred additionally to improve the soil condition. ROCKY SOILS: For making Rocky Soils suitable for the cultivation of Jatropha curcas in addition to the cost of cultivation of normal soils extra cost @ Rs 3950/- per acre has to be incurred for the pit preparation and soil mixture.

  27. REVENUE EARNINGS TO THE FARMERS: SHEET - III * The earning to the farmer in first 3 years is considered from NREGS based on only labour component works out to Rs. 11328/- .i.e. the computation of benefits through NGER excludes items 4, 5 & 7 given in Sheet I.

  28. ** If the cost of plantation material / manure etc. as well as labour cost is reimbursed, to the farmers under NREGS / Other schemes the in the first three years, and thereafter the earning to the farmer is based on crop yield, then the farmers earning is estimated at Rs 11,350/- in the first year and Rs.4050/- in the second year, Rs.4900/- in the third year, Rs 5250 in the fourth year, Rs 11250/- in the fifth year, with a regular income of Rs.17250/- per acre / per annum from sixth year onwards as under. Rupees Per Year Per Acre State Governments may kindly consider reimbursement of cost of sapling material and labour, by suitably extending their existing schemes for Jatropha Cultivation for first three years of Rs.11350/- + 4050 + 2400 = Rs.17800/-, first Rs.10,000/- from NREGS & Rs.7,800/- from Horticulture / Other Schemes currently operating in the State for Mango / Guava and other Agricultural / Horticultural items.

More Related