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Assessment of demand for natural gas from the electricity sector in India

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  • Shukla, P.R.
  • Dhar, Subash
  • Victor, David G.
  • Jackson, Mike

Abstract

Electricity sector is among the key users of natural gas. The sustained electricity deficit and environment policies have added to an already rising demand for gas. This paper tries to understand gas demand in future from electricity sector. This paper models the future demand for gas in India from the electricity sector under alternative scenarios for the period 2005-2025, using bottom-up ANSWER MARKAL model. The scenarios are differentiated by alternate economic growth projections and policies related to coal reforms, infrastructure choices and local environment. The results across scenarios show that gas competes with coal as a base-load option if price difference is below US $ 4 per MBtu. At higher price difference gas penetrates only the peak power market. Gas demand is lower in the high economic growth scenario, since electricity sector is more flexible in substitution of primary energy. Gas demand reduces also in cases when coal supply curve shifts rightwards such as under coal reforms and coal-by-wire scenarios. Local environmental (SO2 emissions) control promotes end of pipe solutions flue gas de-sulfurisation (FGD) initially, though in the longer term mitigation happens by fuel substitution (coal by gas) and introduction of clean coal technologies integrated gasification combined cycle (IGCC).

Suggested Citation

  • Shukla, P.R. & Dhar, Subash & Victor, David G. & Jackson, Mike, 2009. "Assessment of demand for natural gas from the electricity sector in India," Energy Policy, Elsevier, vol. 37(9), pages 3520-3534, September.
    • Handle: RePEc:eee:enepol:v:37:y:2009:i:9:p:3520-3534
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    3. Blenkinsopp, T. & Coles, S.R & Kirwan, K., 2013. "Renewable energy for rural communities in Maharashtra, India," Energy Policy, Elsevier, vol. 60(C), pages 192-199.
    4. Kani, Alireza H. & Abbasspour, Madjid & Abedi, Zahra, 2014. "Estimation of demand function for natural gas in Iran: Evidences based on smooth transition regression models," Economic Modelling, Elsevier, vol. 36(C), pages 341-347.
    5. Das Gupta, Supratim, 2021. "Using real options to value capacity additions and investment expenditures in renewable energies in India," Energy Policy, Elsevier, vol. 148(PA).
    6. Sylwester Robak & Robert Raczkowski & Michał Piekarz, 2023. "Development of the Wind Generation Sector and Its Effect on the Grid Operation—The Case of Poland," Energies, MDPI, vol. 16(19), pages 1-16, September.
    7. Dzikri Firmansyah Hakam & Ayodele O. Asekomeh, 2018. "Gas Monetisation Intricacies: Evidence from Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 8(2), pages 174-181.
    8. Eto, R. & Murata, A. & Uchiyama, Y. & Okajima, K., 2013. "Co-benefits of including CCS projects in the CDM in India's power sector," Energy Policy, Elsevier, vol. 58(C), pages 260-268.
    9. Pasimeni, Maria Rita & Petrosillo, Irene & Aretano, Roberta & Semeraro, Teodoro & De Marco, Antonella & Zaccarelli, Nicola & Zurlini, Giovanni, 2014. "Scales, strategies and actions for effective energy planning: A review," Energy Policy, Elsevier, vol. 65(C), pages 165-174.
    10. Chen, Hao & Geng, Hao-Peng & Ling, Hui-Ting & Peng, Song & Li, Nan & Yu, Shiwei & Wei, Yi-Ming, 2020. "Modeling the coal-to-gas switch potentials in the power sector: A case study of China," Energy, Elsevier, vol. 192(C).

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