India’s GAIL to invest £486 million in renewable energy

STATE-OWNED GAIL (India) Ltd is planning to invest Rs 50 billion (£486 million) in renewable and clean energy opportunities.

Under the plan, GAIL will lay pipeline infrastructure to connect consumption centers to gas sources and spend about Rs 40bn (£389m) on renewable energy, the company’s chairman and managing director Manoj Jain said.

"We are a business that is already eco-friendly - gas. And now we want to leverage our position to go greener in line with the vision of the government and the prime minister to cut carbon emissions and pollution," he said.

It also plans to set up ethanol units to convert agriculture waste or sugarcane into less polluting fuel that can be blended with petrol, helping India to cut import dependence, he said.

The estimated cost for setting up two compressed biogas plants and an ethanol factory is Rs 8bn-10bn (£77.8m - £97m), he said.

The announcement from GAIL comes amid India’s growing efforts to explore new forms of clean energy and reduce dependence on imported fuels.

India imports 85 per cent of its crude oil requirement.

"We have 120 MW of renewable energy capacity which we want to scale up to 1GW in next three-four years," Jain said.

Besides, GAIL will bid for a 400 MW solar power capacity being auctioned by SECI (formerly Solar Energy Corporation of India) in Rewa, Madhya Pradesh.

The company’s maiden compressed biogas plant will come up in Ranchi with an investment of Rs 2bn-3bn (£19m – £29m). It would produce five tonnes of gas per day and about 25 tonnes of manure.

"The gas produced will be fed into the city gas network supplying CNG to automobiles and piped natural gas to households. This will help reduce pollution," Jain said.

GAIL has floated an expression of interest tender seeking partners for setting up of the biogas plants.

The latest announcement is seen as part of the government's vision for energy transition in India, which envisages to raise the share of gas in the energy mix to 15 per cent by 2030, from the current 6.2 per cent.

The company accounts for 75 per cent market share in gas transmission and more than 50 per cent share in gas trading in India.