Need for Alternative Fuels in India- What are the Advantages of Methanol as Fuel? (Important) (Download PDF)


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The National Institution for Transforming India (NITI) Aayog plans to set up Methanol Economy Fund of Rs. 4, 000 - 5, 000 crore for promoting production and use of methanol clean fuel.

Image of India Fossil Fuel Imports

Image of India Fossil Fuel Imports

Image of India Fossil Fuel Imports

Fund will promote generation of cheaper, safer and pollution free methanol fuel by converting high ash content coal and stranded gas assets into methanol.

Need for Alternative Fuels in India

  • India’s import dependence has been soaring – the share of imports in primary energy requirement have grown from 28 % in 2005 - 06 to 40 % in 2015 - 16 and, still around 300 million and 800 million Indian’s do not have access to electricity and clean cooking fuels respectively.

  • Need for alternate fuels becomes clear for achieving government targets of:

    • 24x7 power for all by 2022

    • 175 GW of installed capacity of renewable energy by 2022

    • Distribution of 50 million LPG connections to rural BPL women under Prime Minister Ujjwala Yojana (PMUY)

    • 10 % reduction in oil and gas import dependence by 2022 from 2014 - 15 levels.

Methanol from Coal

  • Coal to methanol is proven technology but still not used in India. India should use coal instead of imported natural gas methanol production:

    • Well-to-wheel emissions for methanol produced from coal is quite high i. e. 190 grams of CO2e/MJ of fuel in comparison to gasoline/diesel run vehicles for which the number is in the range of 95 - 100.

    • Well-to-wheel emissions for coal to methanol production can however be reduced to 85 grams CO2e/MJ of fuel if carbon capture and storage (CCS) equipment or cogeneration plant for electricity generation is used alongside a coal to methanol plant.

    • India does not produce natural gas as per its requirements and imported 43 % of natural gas in 2016 - 17. Since, there is a high volatility in the price of imported natural gas which is driven by international market forces, it becomes difficult for India to assimilate it in its energy ecosystem due to which around 14000 MW of gas based power plants are stranded

    • India has 5th largest coal reserves, it must tap on coal-methanol potential.

  • With per capita emissions of India (1.7 ton CO2e/capita) being just 1/3rd of the world average (China- 7.7, US- 16.1, Japan- 10, Russia-12.3 India has room to improve on fuel independence even at cost of higher emissions.

    • India has also taken effective steps to reduce its carbon footprint, it has the right to use its carbon space while it achieves its developmental ambitions.

  • Methanol can also be produced from MSW, biomass and wood- dovetailed with Swatchh Bharat Mission

Advantages of Methanol as Fuel

  • Methanol is one of simplest single carbon compound, which can serve as the alternative fuel for India.

    • It is a highly efficient and can be blended with petrol or diesel. It can even substitute those reducing the already high import dependence on crude oil (82 % of the crude requirements were met through imports in 2016 - 17) - for target of 10 % reduction in oil and gas import dependence by 2022 form 2014 - 15 levels.

    • Use of methanol/DME (10 - 15 % more efficient) would result in significant improvement in vehicle efficiency, as it is an efficient fuel than gasoline or diesel.

    • M15 (15 % methanol-85 % gasoline/diesel) mixtures would require minimal modifications to internal combustion engines and the conversion kits for the same are easily available globally. Anything beyond M15 requires major changes in the IC engines

    • Sagarmala Project gives an opportunity to use methanol/DME as a fuel in Inland waterways which would cause far less pollution in the water bodies and at the same time be more efficient

  • It emits lesser NOx, PM, no SOx and can be further converted to Dimethyl ether (DME) which is a clean diesel alternative

  • It can be blended with LPG as well. Methanol/DME cookstoves will provide access to clean cooking fuels in India and further PMUY.

    • Methanol/DME can be blended with LPG with slight modifications in existing cookstoves but can also substitute LPG completely with new cookstoves. China is already blending 20 % DME with LPG.

    • LPG is one of the distillates of crude oil, India imports 50 % of its total LPG requirement of 21 MT. Therefore, the use of methanol/DME would curtail the imports of LPG as well.

  • Methanol/DME can also be blended in diesel telecom towers, especially in rural areas where they run as long as for 16 - 18 hours a day on diesel.

  • Methanol is used for producing various chemicals like formaldehyde, acetic acid and olefins which can be high foreign exchange earners.

  • Huge landfills from metro cities can be converted to methanol to avoid toxins leaching into our soil, release of GHG emissions etc.

Problems with Methanol as Fuel

  • Although, methanol is quite safe to handle, it is toxic if inhaled, and anti-syphon systems and bitter additives can be used to prevent its ingestion.

  • China has already leapfrogged to methanol in a big way. China accounts for 55 % of the global methanol production of 85 MTPA and has been using it as a drop-in fuel for transportation vehicles and blending it with LPG. The consumption of methanol has risen sharply at a CAGR of 18 % over the last decade in China.

  • India with installed capacity of 0.47 MT has produced only 0.16 MT of methanol in 2015 - 16 against a total requirement of 1.83 MT. Capacity utilization of methanol plants is only 34 % in India as they depend on imported natural gas to produce methanol making it uncompetitive.

  • Since, the global crude oil prices have fallen by more than 60 % since mid-2014, it makes it less attractive to invest in alternate fuels. India’s crude oil import bill has decreased from a high of $144 billion in 2012 - 13 to $70 billion in 2016 - 17

  • Ethanol has been the choice of fuel in India used to blend with gasoline in vehicles. Motor Spirits Act, 2013 called for mandatory 5 % blending of ethanol with gasoline which was not achieved due to un-remunerative prices of ethanol.

  • With ethanol sources food vs fuel debate hampers the use of liquid transportation biofuels derived from plant-based feedstocks.

Therefore, keeping in view the above scenario, it is in the best interest of India to move towards a methanol economy

- Published/Last Modified on: January 2, 2018


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