Innovations in the Energy sector : One Indian...

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

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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

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

Innovations in the Energy sector : One Indian...

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