In Conversation with Sh. Bijay Kumar

Shri Bijay Kumar, Ex General Manager (Alternate Energy), Indian Oil Corporation Ltd. has over 30 years of experience in the Oil & Gas Industry across Engineering, Vigilance, Alternate Energy and Sustainable Development verticals of Indian Oil. A master’s in business administration from Utkal University, Bhubaneswar, Shri Kumar had completed his Civil engineering from NIT-Jamshedpur, both degrees with 1st class and distinction.

The world is completely aware of the adverse effects of global warming, and everyone is very concerned about environmental pollution as the negative effects of fossil fuels are wreaking havoc on planet Earth. In nature, this situation is irreversible. If we continue to exploit the earth's resources at the same rate as in the last 70–75 years, the resources available today will be insufficient for the survival of humanity in the coming future. We must follow nature's lead and stop exploiting resources and start using energy sources in a self-sustaining manner that does not harm or impede the earth's natural course. This viewpoint is shared by all nations on the planet, and thus alternate energy/sustainable energy enters the picture.

The paradigm shift to alternate energy/sustainable energy is no longer a choice but a necessity. This is the time's and the world's demand. As a result, the role of the sustainable energy sector should be to create an energy source that does not harm nature or Mother Earth.

A lot of work remains to be done in the biogas sector, and much of the potential of this sector remains untapped. Biogas has enormous potential all over the world. Whatever energy source we use, whether coal, fossil fuels, or natural gas, is derived from biomass. We have coal because thousands of years ago, plants and animal remains were buried deep within the earth and then converted to coal due to extreme pressure. In a similar way, crude oil and natural gas are also produced by nature. We are replicating what nature has given us by growing plants, doing vegetation, and putting all organic matter in a biogas digester to produce biogas.

We are not disrupting nature's delicate balance; we are creating fuel without harming the environment or causing pollution. As a result, this is a most advantageous process in which everyone benefits, including nature as well as mankind, mother earth, society, and country. This sector has yet to fully mature, particularly in our country. India is an agrarian economy, with agriculture employing 80% of the population. As a result, the biogas sector has enormous growth potential, particularly using agricultural residue.

As a result, it must be promoted in a way that is consistent with the country's economy. There are currently less than 100 large-scale biogas plants in India. However, based on current potential, there is room for at least 5,000 plants to be established across the country, depending on feedstock availability. The role of IBA and other oil and gas companies will be critical in propagating biogas.

2. The welcoming news of the CFA revival is bringing fresh motivation to the entire Biogas fraternity, what are your thoughts on that?

The government has taken a very encouraging step by announcing a substantial capital subsidy for the biogas sector. It arrives at a time when the cost of establishing biogas plants has skyrocketed due to the COVID pandemic and also after the funding difficulties the biogas sector is facing, as very few financial agencies have stepped forward to fund the biogas plant.

However, I believe that capital subsidies alone are insufficient to promote the industry; at the very least, some concrete steps should be taken as productivity-linked incentives for the products produced, such as biogas and fertilizer derived from the biogas industry, to make the biogas project funding more attractive.

OMCs have provided a buyback guarantee/assurance/ agreement that they will purchase it at a certain price, but that price is linked to the CNG price in the market, which is highly volatile in the current scenario, therefore making biogas plants a profitable sector that is highly uncertain. The reason for this is that it is a nascent sector, and the technology is not well established in India; it is far more advanced in the Western nations, but the environment there is different.

Plant equipment such as compressors, balloons, purification systems, and so on are still imported, so they are expensive given that it is not made in the country. Some capital subsidies will help entrepreneurs who are setting up plants with their money, but it must be understood that with interest rates rising to 12% and imported parts such as cascades, balloons, digesters, purification systems, pumps, and so on, the current cost of establishing the plants and the life cycle cost are very high.

With 70% funding from banks and 30% from entrepreneurs, the government should provide some sort of capital subsidy enhancement as well as some productivity-based incentives like INR 10-15 per kg on CBG and INR 2-3 per kg on organic manure to promote the sector. This additional incentive could apply to the first 500 plants that are commissioned. If this is done, then it will ensure the stakeholders' seriousness and promote healthy competition among entrepreneurs.This measure will boost the installation of biogas plants. This move should be allowed for a stipulated time limit, perhaps 3-5 years, rather than for an unlimited time. This ensures that anyone who is interested and serious about learning about this industry will benefit. As a result, they will be compensated based on their output and sales. Thus, the MNRE subsidy alone is insufficient, and this is why many plants are not being established. Despite the MNRE subsidy being declared on November 2, 2022, few players have emerged.

3. What specific, big changes need to be made in the renewable energy sector for India to reach its net-zero goals by 2070?

If net zero energy is to be achieved, it must be accomplished entirely through alternative energy sources, of which only solar and biogas make sense. This is because wind energy is highly uncertain, and reliability and maintenance are also some of the concerns. It is debatable whether it can sustain itself. India has an abundance of agricultural residue, and because it is a tropical country, the sun is available for most of the year.

Piecemeal policies are being developed, but a comprehensive policy should be drawn up in which, in conjunction with agro residues, the plantation of energy crops on barren lands should be taken up. A comprehensive policy must be drafted in order to ascertain from where raw materials will be obtained and how the study will be conducted; a roadmap must be prepared for how this must be accomplished, the availability of solar panels, how they will be made available, and at what cost.

Everything must be clearly specified in the policy draft, including how solar electricity will be generated, how it will be injected into the grid, and at what price it must be injected into the grid. Everywhere, simple declarations are made that are not very helpful. Comprehensive policy development is not taking place.

Similarly, for biogas, how will the equipment be arranged, how many pieces of equipment, compressors, and so on are required, what is the country's current capacity for making cascades, purification systems, or compressors, and how many plants are to be set up? Since the last five years, more and more seminars have been held in place of real action and concrete measures that are required to be implemented on the ground. Some concrete work on the ground is required.

4. How can we reconcile net zero with the many other sustainability challenges? For example, how do we make circular thinking central to the net zero agenda?

To achieve net zero energy, all aspects of energy must be considered. Carbon accounting must be done because there is currently no concept of carbon accounting in the country: how much we are burning, how much we could save, and how many new avenues must be created. This concept of carbon accounting must become a part of every industry, household, organization, and society.

This concept must be accepted and practiced on every level: as responsible citizens, as responsible industries, and as responsible entrepreneurs, we must account for carbon, what we burn, what we create, how much pollution we cause, and how much we can reduce. We must also educate every student and citizen that wasting our resources, whether food, energy, or water, is a criminal offence. From there, the net zero concept emerges.

Unfortunately, whatever is happening is happening intermittently; for example, turn off your car engine at a red light, etc. These are minor things, and even for this, we do not have the right infrastructure: the roads must be designed in such a way that there is no traffic jam if this energy-saving etiquette is followed. It is concerning how much fuel is consumed each day in traffic jams. The sky was clear during the lockdown, and the Himalayan mountains could be seen from Delhi. So, it is quite understandable how much pollution we produce on a daily basis.

5. In 2047, India will celebrate 100 years of independence, so to attain Atmanirbhar Bharat, what are your suggestions or opinions on making the CBG sector more robust?

A comprehensive policy is required for the CBG sector. Starting with feedstock management, the plant's layout, technology, and economics must be worked out or modelled so that any entrepreneur setting up the plant finds them appealing. The following concerns need to be addressed: at what rate funds are available, what incentives are being provided, so that it encompasses everything, including the availability of the cascade, material, compressor, and purification system in India, how many industries must be established, and so on. What we could do, whether some equipment is imported, whether we can make those in India, whether we can replicate that model— so, starting from feedstock management and policy intervention to technology and product off-take, intervention is required everywhere.

Off-take from oil companies is currently not very appealing, in the sense that a buyback arrangement exists, but demand is dependent on market conditions. Because CBG is essentially replacing CNG, there is no CBG market. The gas grid is not yet operational; it is currently in the process of being built. As a result, there is a need to intervene as a policy matter and as a solution everywhere.

Micromanagement is required at all levels. Not only at the feedstock level but also at the plant setup level. Improvements are required everywhere because the current policy interventions are insufficient. That is the primary reason why even though it is beneficial to society, this industry is not growing despite the large number of interested visitors, including IOCL, HPCL, BPCL, and GAIL. As a result, we must make the sector appealing at all levels.

We must identify the major problems and find potential solutions in each biogas segment. Every problem must have an implementable solution. Financing is currently a major issue; banks are demanding collateral that entrepreneurs cannot provide. Interest rates are currently so high that it makes no sense to invest in this sector as a plant owner.

These are the primary reasons why this sector is not growing at a faster rate, despite numerous benefits such as job creation, scientific waste management, environmental cleaning, and the achievement of the Swachh Bharat Mission. This is the only government programme that addresses four or five government programmes with a single SATAT programme.

The main idea behind SATAT was that what came from the field should be returned to the field, extracting the energy component and utilizing it more effectively. That is why we proposed collecting feedstock within a 25-kilometer radius of the plant and selling biogas within the same radius.