Stung By Gas Volatility, GAIL Plans Bigger Clean Energy Footprint

Highlights :

  • The announcement by GAIL management is an important indication of how industry expects the future to unfold, seeing the volatility in gas prices.
  • Gas has been widely assumed to serve as India’s bridge fuel before clean energy dominates, but the recent price spike has hurt a lot of those plans.
Stung By Gas Volatility, GAIL Plans Bigger Clean Energy Footprint

Gas major GAIL (Gas Authority of India Limited), which owns the largest gas pipeline network in India besides a presence across the gas value chain, especially the distribution side of it, is quietly adding a larger clean energy component to its future plans.

After announcing  it’s strong Q1 results for FY 23, the company, which is likely to show the impact of higher prices and contractual issues from key suppliers going ahead, has announced a major push towards clean energy, among other things. The firm has announced plans to seek shareholder nod for doubling its authorised share capital from Rs 5,000 crores to Rs 10,000 crores, to enable it to raise the debt funding required for future plans.

These plans include speciality chemicals, and a foray into clean energy, including solar power,  solar manufacturing including solar glass, and even round the clock (RTC) storage plants powered by renewable energy.

It has announced its solar plans earlier with a ‘modest’ 1 GW target by 2025, and possibly 3 GW by 2030. On the green hydrogen front, it has already started a project to produce green hydrogen using Proton Exchange Membrane   electrolysers powered by a 10 MW solar or Hybrid renewable plant set up in Madhya Pradesh. .

The fresh ambition in the form of manufacturing  augurs well for the sector, as solar glass, a specific area GAIL has mentioned, continues to have just one domestic player, Borosil Renewables Limited.

Large energy storage will also benefit from having integrated energy players back it, especially in the first phase when risks will be considered higher, as they will have a better ability to manage costs as well as find takers for the storage solutions.

GAIL’s announcement leaves out just the 3 key oil marketing firms, Indian Oil, BPCL and HPCL, which are yet to announce significant investments into clean energy, although all three have tried piecemeal efforts so far.  ONGC, which owns HPCL now, besides being the national oil explorer, has also made noises, but specific investment plans and timelines have not been made yet.

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