IGL seeks renewable energy assets as it looks to turn net zero
- The company targets to set up 80-90 CNG stations in the current financial year and a similar number in the next fiscal (FY25)
New Delhi: State-run Indraprastha Gas Ltd (IGL) may look at acquisitions in the renewable energy space, particularly solar power, along with its core focus on city gas distribution, biogas and liquefied natural gas (LNG), said its managing director Kamal Kishore Chatiwal.
He noted that acquisition of solar assets would help make the company net zero.
“Capex will remain in the same range ₹1,500-1,600 crore in (FY25). If an opportunity comes for acquisition either in renewables, city gas distribution (CGD) space or any other, then we have the cash," he said, however, adding that there is no proposal available currently.
City gas distribution (CGD), biogas and LNG will remain the core focus of investment plans. “We are also looking for renewables, solar. It will also be helpful for our internal net zero plans," he said.
Promoted by Gail (India) Ltd and Bharat Petroleum Corporation Ltd (BPCL), IGL is a city gas distribution major and supplies CNG (compressed natural gas) and piped natural gas (PNG) across Delhi-NCR (National Capital Region) including parts of Uttar Pradesh, Haryana and Rajasthan.
Chatiwal said the company’s target is to set up 80-90 CNG stations in the current financial year and a similar number in the next fiscal (FY25). In terms of PNG connections, he said that in the past five to six years, the company has expanded its PNG network from 750,000 connections to over 2.5 million.
IGL’s target is to add 2-300,000 connections every year, he said.
In a bid to diversify its operations, the company during the recently ended India Energy Week 2024 signed memorandums of understanding (MoUs) with technology partners to set up compressed biogas (CBG) plants across Delhi, Haryana, Rajasthan and Uttar Pradesh with an investment of about ₹6,000 crore. In May last year, the company had tied up with ACME Group to explore green hydrogen opportunities.
In the interview, Chatiwal also outlined plans to accelerate compressed biogas blending in its city gas distribution network. In November, the union ministry of petroleum and natural gas came up with phased mandates for CBG blending in CNG and PNG, saying the compressed biogas obligation would be kept at 1%, 3% and 4% of total CNG and PNG consumption for FY26, FY27 and FY28 respectively. Starting FY29 the obligation will be for 5% blending.
Chatiwal said that IGL would achieve 5% blending about well ahead of the suggested timeline.
“CBG obligation has come. Whatever obligation is till 2030, we will prepare it before 5 years. We will do it by 2025...We see the value there. Both as a producer I am assured 12-15% return and as a user I get the cheapest gas. That is the area we are focusing on."
On the company’s plans for the LNG space, he said that the company would set up about 10 LNG stations. Further, the company is planning to covert CNG into LNG using the excess capacity at CNG stations in order to cater LNG to places which are far away from ports.
He noted that LNG has the potential to become a viable cleaner alternative to diesel in the long-haul mid- and large-size vehicles such as trucks and buses.
Noting that electric vehicles and LNG based mobility would grow simultaneously and stressing that consumers require incentives for LNG trucks, he said: “At the end of the day decarbonization has to be technology- agnostic. A country like India cannot afford to be dependent on only one technology. Our take is that, if it is technology-agnostic, whoever reduces carbon emission should get tax benefit."
“ In medium and heavy commercial segment, we do not see EVs in this segment. Right now it is a challenge. Then the other option is LNG. So, why don’t we incentivize LNG either on the vehicle side. If LNG trucks can reduce your emission by 50%, some benefits should be given to LNG trucks."
