Reliance proposes generating power from CGD gas

Vol 11, PW 10 (20 Sep 07) Midstream & Downstream
     

Radical thinking is nothing new for Reliance Industries.

PETROWATCH learns the Mukesh Ambani-controlled group has come up with another innovative business idea: generating electricity from D6 gas supplied to retail City Gas Distribution networks in towns and cities. Reliance submitted a blueprint of this idea to the oil ministry earlier this year alongside an application to set up CGD networks in Andhra Pradesh, Tamil Nadu, Karnataka and Maharashtra.

RP Sharma, president of Reliance’s LNG business, tells us electricity generated by local gas supplies would be a huge improvement on the inefficient present system that relies on electricity from a centralised generation and transmission system. “With centralised generation, a combined cycle power station has 50% efficiency, which means only 50% of primary energy is used,â€‌ says Sharma.

“Then, there are transmission and distribution losses of between 35% and 40%. Eventually, effective utilisation of primary energy for power generation is only about 32%.

â€‌ Adds Sharma: “The cost of gas is high. It is not cost-effective to use gas for this kind of power generation.

â€‌ Instead, Reliance proposes setting up decentralised gas-based power stations within CGD networks. Under this system, gas would be supplied to the power stations to generate electricity and supplied to apartment blocks and other users in the vicinity.

“The advantage of this system is that transmission and distribution losses are only 6%,â€‌ says Sharma. Crucially, it would be much cheaper: Rs2.60/KwH from decentralised power generation against Rs4.43/KwH for centralised power generation, assuming delivered gas at $6/mmbtu.

The only significant loss in decentralised power generation, says Sharma, is the 50% â€کprimary energy’ loss while producing electricity. Reliance also proposes CNG supply points to apartment complexes within a CGD zone, so cars parked inside could be supplied with gas instead of going to a vending station.

This is similar to systems operating in parts of Canada.

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