Innovations in the Energy sector : One Indian Perspective
Dr Ajit Sapre
Reliance Technology Group
16th May 2013
2
Outline
Strategic Drivers & Challenges
Resource Outlook
Coal Conversion Technologies
Agricultural Residues
Role of Biotechnology
Summary
3
Global
Green
Strategic
drivers
Growth
Emerging chemical leaders
from ME and Asia
Increasingly global supply
chain in fuels/ petrochemicals
Favoring Asia and ME
Commoditization of
specialties
Designer materials
Alternate feed-stocks
Carbon risk
Advancing “green wave”
Long-term Strategic Drivers & Challenges
Global “Green” Global Growth
“Green” Growth ?
Sustainability Or
Energy Security
Challenges
In the uncertain world Innovation key to meet Future Global Challenges
4
Meeting Energy Needs of Aspiring Middle Class
Sustainability has to account for well being
Of “Aspiring Middle Class”
Power Mobility
Fuel
Standard
of Living
Sustainability has to
account for well being Of “Aspiring Middle Class”
Bright Lights, Big Planet: The Uneven spread of Electricity
Affluent 5%
Middle Class 45% Strugglers 50%
5
The Global Energy Challenge
3,000 10,000 15,000 25,000
Ener
gy d
eman
d
Industrialization and personal
mobility take off
Services dominate growth and basic households energy needs are met
Urbanization
Economic growth requires little
additional energy
GDP/Capita in constant PPP terms
Demand for energy is growing rapidly as countries like India enter the most
energy-intensive phase of economic development
India
China
OECD (17% world population)
Leapfrogging Efficient Technology Development & Deployment ---- Sustainable path
More, Secure and Responsible Energy Technology for the Growing World
Traditional
Non-OECD (83% world population)
6
Shale gas – Game changing US Energy Scenario
Huge shale gas finds and production has decoupled gas price from oil in US
NG price decoupling from oil in US
India has signed MOU with US for development of shale gas in India
• US natural gas prices are under- $3/mmBTU
• Indian LNG marginal cost is as high as $15/mmBTU
• Petrochemical industry (ethylene) has got huge boost due to
associated ethane in shale gas
• LNG exports from US likely in the future
7
Shale Gas rapidly replacing Coal in the US
Shale gas emits 50% less carbon dioxide than
coal
If large scale projects in major growth economies e.g. India and China, shift to shale gas, carbon emission trends could be reversed
China plans shale gas output rise from 6.5 billion cubic meters in 2015 to 100 billion cubic meters in 2020
In US, shale gas went from 1% of gas production in 2001 to 37% in 2011
Cheap shale gas will make coal uneconomical in the US
Build a successful worldwide cooperation on shale gas technologies to help
near-term reduction in CO2
US Electricity Fuel mix
8
Indian Energy Demand & Supply
Energy efficient clean coal conversion technologies needed
Annual Energy Demand to increase from 590
Mtoe in 2009 to about 1,299 Mtoe by 2030
Today India imports ~70% crude oil and ~30%
natural gas (>$ 80 billion revenue outgo)
Today India has
0.6 % of World’s Gas reserves
0.4 % of Worlds Oil reserves
7% of World’s Coal reserves
Coal has a major role to meet India’s energy
needs
Coal demand will grow at a rate of ~8%/ yr
Indigenous production + imports
Carbon Capture & Sequestration critical
technology with growth of coal burning
Current
Source- Integrated Energy Policy- Planning Commission, Govt. of India
India is 5th largest energy consumer in the world 2030
India scenario (MMTPA) 2010 2015
Coal consumption 656 878
Coal imports 73 240
Petcoke capacity 7 16
9
Challenges faced by Indian coal industry
Conventional technologies employed for extraction / mining / power generation (PC)
- Capex and load factor considerations more important than efficiency in the past
Indian coal is high in ash content (15-45%) & lower calorific value compared to others
(reliability issues with abrasive ash)
Low Thermal Efficiency of conventional boilers
– Need to use Supercritical technology (Indigenous development by BHEL/NTPC is
progressing)
Environmental concerns
- SOx, NOx, Hg, Fly Ash
- Future CO2
Access to clean coal technology is required
– Building latest generation Gasification, PFBC, USCPC, etc.
(Production capacity, Technical capability)
– RIL Petcoke gasification project at Jamnagar
Renewable Portfolio Obligation
- Solar, wind, biomass co-firing, etc.
New technologies required to efficiently utilize high ash, low calorific
value coal
10
Clean Coal Gasification Technologies for
High Ash Indian Coals
Need to advance several Indian coal to SNG pilots to commercialization
Indian Initiatives:
ONGC pilot in Gujarat
Abhijeet Group/ Gail
Cougar Energy JV with Essar
Technology being developed to efficiently convert
in-ground and extracted low rank coal to gas
In-situ Bioconversion:
– Low cost chemicals (bio-stimulants) are
injected into coal seams to stimulate
microbes to convert coal to methane
– Technology may also be used to enhance
or generate methane from fully depleted
CBM wells
Ex-situ Bioconversion:
– Low grade coal converted by chemical
solubilization and anaerobic fermentation
– Does not produce CO2 and hazardous
waste
Underground Coal
Gasification
Bio Route for Coal
Gasification
Advantages:
Potentially an attractive technology for high
ash Indian coals
Lower capex/ opex
No ash handling challenge
Does not require an external water source
Challenges:
Water contamination
Controlled Burn
Land Subsidence
11
Reliance Pet-coke Gasification Project: Deeper integration of Refining with Petrochemicals
Largest Pet-coke Gasification Project in the World – Future Ready for CO2 Mitigation
Largest refinery in the world with 1.4 MM bbl/day capacity, produces 6.4 MMT/yr petcoke
Petcoke gasification with 12 gasifiers – Kick off in May 2012, start-up by May 2015
On path to become a bottomless and ultraclean refinery
CPP = cogen power plant
PSA = pressure swing adsorption
Conoco-Philips gasifier
12
Classical Routes For Coal Liquefaction
Technology advances ongoing for converting coal to useful products
13
SynGas
Generation
Methanol to
Gasoline Steam
Natural Gas
Coal
BioMass
• Both are 3 Step Process
• Thermal Efficiencies are Essentially Governed by
Coal or Natural Gas C/H Ratios
• Coal is CH to Fuels plus CO2
• Natural gas is CH4 to Fuels plus H2O
Primarily
Gasoline
Fischer
Tropsch (LT)
Methanol
Generation
Upgrading Primarily
Diesel
Two Primary Routes for Indirect Coal Liquefaction
Syngas can also be converted to DME
14
High
High
Clean (PM, S, NOx)
Ceta
ne N
o.
DME
Diesel
Biodiesel
GTL
Diesel
For diesel engines
Low
Low
DME: Diesel substitute or LPG blend component
Objective
Coal/ petcoke DME
Product
80/20 LPG + DME blend
Technology
Gasification petcoke/ coal to syngas DME
Technology Licensors
Two stage:
Davy, Lurgi, Topsoe & Toyo
More mature
Single stage:
JFE
Lower capex/ opex; room for
further innovation
Fuel Performance equivalence
1000 t
DME
621 t
LPG
DME can economically substitute for LPG and clean Diesel
15
Prime coking 2%
Medium coking
8% Semi coking 1%
Non- coking 76%
Lignite 13%
Total Reserves
Coal type Quantity (Mtons)
Prime coking 5,313
Medium coking 25,334
Semi coking 1,707
Non- coking 225,027
Lignite 38,755
Type of Coal Reserves in India
Lignite excellent feedstock for direct coal liquefaction
Source :Geological Survey of India
16
Ato
mic
H:C
ra
tio
Anthracite
Biomass
Atomic O:C ratio
0 0.2 0.4 0.6 0.8
0.5
1.0
1.5
Coal
Lignite
Peat
Lignin
Wood
Avg.
biomass
Grass
Cellulose
Increased heating value
Resid
Crude Oil
Petcoke
Lignite
Increasing Heating
Value
Feed H:C Ratio
Hydrogen addition is the key to produce quality liquid products
Diesel
Solar Hydrogen to upgrade coal to transportation fuels
17
DCL with Vacuum Residue (VR) co-processing
Objective
Lignite + VR + H2 synthetic crude
Technology
Headwater / Axens
KBR / BP
Significant opportunity to improve
Product
Synthetic crude
LPG
Exploit synergy of refinery VR to upgrade lignite
18
Distributed Generation & Distributed Consumption for Electricity
4
Today’s Grid Electricity …
Power park
Hydrogen Storage
Industrial DG
Tomorrow’s Likely Choices …
Combined Heat and Power
Fuel Cell
e -
e -
Wind Farms
Rooftop Photo-voltaics
Remote Loads
Load as a resource
SMES
Smart Substation
Fuel Cell
Could we economically develop distributed production and consumption infrastructure for liquid fuels -- bio refineries?
Smart grid technology could accelerate distributed generation/consumption
Energy losses 68% for electricity vs. 8%
for natural gas to consumers
Village level mini-grids in India based
on gasifying agricultural waste
19
Growing Importance of Bio-based approach in Three main pillars of Indian Economy
Does bio-refinery concept provide a leap frogging technology opportunity ?
Source : India Brand Equity Foundation
Today’s cooking stove
only 10% energy
efficient
20
Future of liquid fossil hydrocarbons?
Energy security will likely drive sustainability agenda
Food Heat Light
Clothes House
21
The Ethical Question !
40% of US corn is directed to run cars
European commission admits that the targeted 10% of transportation biofuels by 2020 would raise cereal prices by 3 – 6%
With every 1% increase in food prices, 16 million people go hungry
By 2021, 14% of world’s maize and other coarse grains, 16% of vegetable oil, and 34% of
sugarcane will go to the fuel tank, only partly coming from increase in production
Radical overhaul needed in policy and food production to ensure food supply for the world’s poor
Need pragmatic and flexible policies to ensure a holistic perspective
Must the poor go hungry just so the rich can drive? -- The Guardian, Aug 13, 2012
22
0 10 20 30 40 50 60 70 80 90
1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Wheat $/MWh(t)
Oil $/MWh(t)
Bio-fuels or Renewable Electricity?
1 Ha land – 10 ton wheat/yr –
40 MWh/ha. yr energy
1 Ha land- 100 tons/yr energy crops
400 MWh/ha.yr energy
1Ha land – One 2 MW Wind Mill
Even with only 25% on time
– 4000 MWh/yr
Wind Mill is 10-100 times more
productive
Need on-purpose energy crops orders of magnitude more productive
Today, we have
reached Wheat & Oil
Energy Equilibrium
on Pricing
Oil Calorific value – 12MWht
Wheat Calorific value – 4MWht
US Oil & wheat prices $/MWht
23
Will Biofuels always Remain Expensive?
With low energy density and economies of scale it is challenging to displace
incumbents with existing infrastructure in mature markets
1 Oil Refinery 90 Bio-Refineries 30 Power Plants
Relative Capital Costs/ Unit Energy
X 3 X 1.5 X
24
18
48
102
127
202
635
10,000
140,000
Transitioning to Low Areal Productivity Resources?
Pumpjack
Algae farm
Jatropha
Corn
Do we need a distributed production /consumption model for transportation fuel?
Require:
Large area to support the current demand level
Overhaul of energy distribution infrastructure to suit the fragmented energy generation
25
Mix of alternative regional bio feed-stocks likely due to scale & heterogeneity
Need a feedstock agnostic technology for rapid deployment – Another challenge for Bio-fuels/Bio-chemicals
Ton
s p
er
year
Specialty Chemicals
Commodity Petrochemicals
Refinery Products
Scale Challenge
India
China
USA
Brazil
Australia
Are
a/P
eo
ple
Is “sea water” based bio feed stock for renewables an alternative for limited
land mass countries?
Multiple Feed-stocks Challenge
26
What is more efficient: Bio-derived sugars or syngas?
With current generation technology syngas may provide greater flexibility & profitability
Bio Feedstock
Sugars
Syngas
FT
MeOH/ DME
EtOH
Bio-fermenta
tion
Bio - fermentation
Fuels
Chemicals
Gasification
Lignin
If needed, Base load from hydrocarbons to ensure steady output
Power
Specialty Chemicals
27
Use of advanced synthetic biology
Even with advancing biotechnology only niche chemicals are economically viable
Could advancing synthetic biology play a critical role to retire old processes that are high cost, multi-step and environmentally disadvantaged?
Today
• >$31 Billion Market
• Enzymes, alcohols, organic acids, amino acids, vitamins, pharma chemicals
• Biocatalysis • Whole-Cell Processes • Large-Scale
Biotransformations
• Enhanced Efficacy • High Selectivity • Economies of Scale
Future
• 60% of Fine Chemicals
• 30% of Specialty Chemicals, Polymers & Bio-materials
30% Biotech
5%
Biotech
Today
28
Algae & Bio-technology for Energy, Petrochemicals & Wellness Products
Algae fuel can be grown
on marginal land with non-
potable, saline and even
waste water
Every gallon of algal oil produced consumes 12-15 kg of CO2
CO2
~600 kg Algal oil
1 barrel
Plant mass
on Earth
Photosynthesis
on Earth Aquatic plants Terrestrial plants
610
12
Sugarcane Switch
grass Algae
58
Corn
Growth
efficiency
MT/acre/yr
Sun Light + CO2 +Sea Water Bio- Oil, Bio-diesel, Ethanol, Nutraceuticals
Genetic Modifications can Improve Yield, Selectivity, Tolerance to external factors
Algae are most efficient convertor of sunlight
Biomass Harvesting or Product Secretion ? Open Pond Or Closed Photo- Bioreactor ?
29
Biology Scale-Up Challenges
Genomics/systems biology, Environment
DNA manipulation,
mutation, synthetic biology,
pathway engineering, gene
expression
Kilo Biology
Nano
Biology
Production
Scale-up of biological systems to large scale industrial applications remain a challenge
Circadian rhythm manipulation?
Is photosynthesis the ultimate rate limiter for metabolic pathway
manipulation (PSI, PSII, etc.) ?
Photosynthesis
Metabolic Pathway Engineering
30
Scale and complexity challenge
Bio fuels/ chemicals to succeed we need distributed production distributed consumption business model
Average Fossil Fuel Refinery 250 KBPD
Critical success factors • High efficiency of conversion • Most value from every molecule in feed • Fuels/ Petrochemicals/ Specialty
Integration • Economy of scale/ Mature over 100+ years
Average Bio-Refinery 5 KBPD
Critical success factors • Effective aggregation of biomass • Distributed production and consumption • Reduction in cost of production to meet
incumbency --- Focus on high margin products – Nutraceuticals/ Specialties
Aggregation; Intermediate Collection, Final Processing, Existing Infrastructure
31
Technology Deployment and Development
Slow
Slow
Fast
Fast
Technology Development Speed
Tech
no
log
y D
eplo
ymen
t Sp
eed
IT & Communications
Technologies
Energy Technologies
Characteristics of Energy Sector - Slow development/deployment - Irreversible nature of investment - Very high capital intensity
Would Biotechnology Materially Change the Energy Paradigm?
Biotechnology ?
More, Secure and Responsible Energy Technology for the Growing World
32
Energy Technology Deployment
Source: Kramer and Haigh, Nature, 2009
Deployment rates in energy sector is measured in decades Copyright © 2012 Reliance: All rights reserved.
33
Summary
Efficient/ Effective use of coal resources
– UCG, BCG, CCS
– Ultra super critical technologies for high ash coals
– DME/ CTL
Solar Mission – Increase efficiency/ Reduce cost
Green Mission – Effective use of Agro residues
– Gasification
– Cellulosic sugars conversion (Higher density fuels than ethanol)
– Standardization of biomass (aggregates/pellets)
– Land based vs. sea coast based biomass
Robust Storage technologies
Energy Efficiency/ Recycle/ Reuse Technologies
New Business Models
– Distributed Production/ Distributed Consumption
– Off grid/ Mini grids
34
Science to Drive Affordable Excellence
Process Innovation Product
Innovation
Catalyst Innovation
Raw material
Flexibility
New Creative Business Models
Public Private Partnerships
CAPEX
Efficiency
OPEX
Efficiency
Fossil Renewable
Labor Talent
Indianization
Unique RIL Capital Project
Execution
Inclusive Innovation = Creativity X Execution
Innovations to meet needs
of Aspiring Middle Class
Collective Mandate: Science for Solution,
Technology for Transformation, Innovation for Impact
THANK YOU
Growth is Life
Innovation Led Growth
Copyright © 2012 Reliance: All rights reserved.