LPG, Energy Access and the Indian Context - M K Surana - WLPGA
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Questions
LPG, Energy Access and the
Indian Context
- M K Surana
New Delhi
February 7, 2017
1
IndiaQuestions
: Fast facts
• 18% of the world’s population (1.31 billion in 2015)
with improving urbanization rate
• 3rd largest economy in the world by GDP (PPP basis)
expected to grow at a CAGR ~7-8% through 2040
• 3rd highest in energy consumption - consumes
5.3% of world’s primary commercial energy
• Average energy consumption growth has been 5.3%
p.a. (CAGR-5 years)
• Energy consumption/capita (533 KGOE) is among the lowest in the world with high
growth potential as the economy grows:
• 1/11th of North America’s per capita energy consumption
• 1/6th of European Union consumption
• 1/4th of China and 1/3rd of Global average
Rapidly Expanding energy needs and High demand for energy
Source: PNG Statistics 2015-16, IMF Outlook and World Bank data
2
EnergyQuestions
Trends : India
• Energy consumption in India is projected to double, growing by a CAGR of 4.3%
per year to reach ~ 1314 mtoe by 2030.
• The energy mix is projected to change with Renewables & Gas increasing the
share and Oil holding steady.
• Fossil fuels remain the dominant source of energy powering the Indian economy,
providing around 84% of the growth in energy demand (Coal – 43%, Oil – 30% and
Gas -11%) between 2015 to 2030 and accounting for about 89% of total energy
supply in 2030 (down from 93% in 2015).
• Gas is seen to be increasingly used in the industrial sector and for power
generation. Liquid fuels continue to dominate in the Transport sector.
• Among non-fossil fuels, renewables (including biofuels) is projected to grow
rapidly (11.7% p.a.), increasing share in primary energy from 2% in 2015 to reach
6% by 2030.
• Renewables is seen competing with fossil fuels in Power sector.
The degree of Policy measures in carbon emissions will see increased use
of LPG and Natural gas
3
Questions
2015-16 : Consumption of Petroleum Products
Product wise volumes / 5 Y CAGR% 2015-16 (Percentage)
HSD
HSD = 75 MMT 4.5% 18%
MS
MS = 22 MMT 9.0% 6%
LPG = 19 MMT LPG
6.8%
13% 41%
Naphtha, ATF & SKO = 23 MMT Naphtha, ATF & SKO
FO & Bitumen = 11 MMT 10%
FO & Bitumen
Others = 33 MMT 12%
Others
Total Volume = 183 MMT, 5 year CAGR of 5.4%
4
Snapshot ofQuestions
LPG Sales in India
Sales in MMT
Total of 19.6* MMT LPG Sales
20.0
17.2 in 2015-16
123 million Urban 79 million Rural
LPG Customers LPG Customers
1.5
0.4 0.2 0.4
0.0
Domestic (HH) Commercial Bulk Automotive Private Imports
Percentage 88% 7% 2% 1% 2%
of Total
A total of 201 Million LPG Customers (HH) are catered through 14.2
Kg and 5 KG packed LPG cylinders
*Including Private Imports 5
Questions
India : World's second largest consumer of LPG
Population (2015): 1,311 million
Literacy Rate: 74% (2011 Census)
Customer base (2016): 750 million
Sales: Over 19 Million tonnes
Enabled thru: 190+ LPG Bottling plants
2600+ km LPG Pipelines
18,000 + LPG Distributors
In the last two years, India has embarked on unprecedented
expansion of its LPG reach through several programmes
6
QuestionsFuel Mix in India
Census 2011 : Cooking
Rural Firewood
Crop Residue
Cowdung cakes
coal, lignite, charcoal
kerosene
lpg/png
electricity
biogas
Urban other
no cooking
0% 20% 40% 60% 80% 100%
% of Households
7
AffordableQuestions
and Clean Energy
2016 : Year of LPG Consumers
There are 17 Sustainable Development Goals outlined by UN for
Sustainable 2030
Goals by UN
Goal 7 is to ensure affordable and clean energy
India is the home to the largest number people lacking access to
electricity and clean cooking facilities.
India :
Current Out of every three persons lacking access to clean cooking
Scenario
fuel, one is an Indian (approximately 840 million out of 2.7 billion).
PaHaL (2014), #GiveItUp
Enabler:
Policy
SAHAJ, Digital payment and cashless transactions
environment
Pradhan Mantri Ujjwala Yojana - PMUY (2016)
8
Questions
PAHAL
PAHAL
• Increase effectiveness and bring
• Launched: 15th Nov 2014
GoI •
in Transparency
Reduce Subsidy burden
• Subsidy Transferred:
Rs. 4,149 Billion
• Reduce or prevent the
unauthorised sale
OMCs • De-Duplicate multiple
connections
• Cash subsidy to buy upto 12
cylinders
Customer • The subsidy amount is
transferred directly to the bank
Percentage enrolled account
> 160 Million (90%)
9
Questions
PAHAL : Setting World records
10Questions
#GiveItUp: Voluntarily surrender of subsidy
#GiveItUp
Scheme was launched in May’15 for LPG
consumers willing to voluntary give up subsidy
Against each surrendered subsidy, LPG
connection were issued to BPL family
Consumers opted out of the subsidy by
submitting written request to the distributor or
electronically at mylpg.in.
10 million consumers opted out of subsidy within
one year
> 5.5 million deposit free LPG connections were issued to BPL
families in 2015-16
11Pradhan MantriQuestions
Ujjwala Yojana (PMUY)
Launch:
• Launched by Hon’ble Prime Minister on 01.05.2016 at Ballia district of U.P.
• Aadhaar of the consumer as the primary key in verification & deduplication activities.
Scheme Details:
• 5 Crore deposit free LPG connections to women beneficiary
• Empowering women by providing access to Clean Cooking Fuel
• To improve the health of women & children
• The ultimate impact is 85% LPG coverage by 2018-19
• Initiative is on ‘Mission Mode’, dedicated, focused approach for smooth, effective &
timely implementation
Selection of Beneficiaries:
• Women beneficiary identified Socio-Economic Caste Census-2011 (SECC-2011)
data.
• Preference for SC/ST & Weaker Sections of Society
Focus States:
• Priority for States having Lower LPG Coverage vis-à-vis National Average of 62%
12Questions released
PMUY Connections
Target : 50 Million Connections by 2018
New PMUY Connections (Million Nos)
4.0 3.7
3.5
3.0
2.6
2.5 2.4
2.2 2.1
2.0
1.5
1.5
1.0 0.9
0.5
0.0 0.1
0.0
Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16
New PMUY Connections (Million Nos)
A total of 15.3 Million LPG Connections under PMUY scheme have
been released till 31.12.2016.
13Questions
Key Success Factors for PMUY
Detailed planning by Govt. of India
Continuous engagement and support in implementation by MoP&NG
Collaboration among OMCs and structure of District Nodal officer
Camps for customer enrolment and LPG distribution
LPG distributors engagement
Large scale mobilization of LPG equipment
Extensive deployment of Technology
Mission Mode Working by OMCs
14Questions
Leveraging IT for moving towards Digital India
e-SV
Portal in 13 Languages for Enrollment, Payment and Online refill payment can
rolling out various Govt. Release online be remitted in advance
initiatives
Toll free Single Number Cashless transactions
for LPG compliant in Credit card and e-wallet
regional languages
15Questions
Auto LPG Cars in India
Hyundai Eon Magna Hyundai i10 Sportz LPG
Fuel : LPG Fuel : LPG
Price : 4.5 Lakhs (Ex Delhi) Price : 5.4 Lakhs (Ex Delhi)
Mileage ~ 21 km/kg Mileage ~ 20 km/kg
India : Witnessing increasing number of vehicles with Auto LPG
and Natural gas as Fuels
16Questions
Trend of LPG Demand
Projected LPG Demand in MMT
35.0
30.0
30.0
25.0
19.6
20.0
15.0
10.0
5.0
0.0
2015-16 2020-21
2015-16 2020-21
LPG Demand in the country is expected to grow at CAGR of ~ 9%,
covering > 90% of Country’s households
17Questions
Challenges
Supply end
LPG continue to remain in short supply and India will be dependent on
Imports
The LPG Import capacity will need to be augmented
LPG Pipelines currently at < 20% and have to be augmented for effective
logistics
User end
Affordability by economically weaker section
Safety awareness among new users
Socio cultural issues
Type of houses
18KeyQuestions
Messages
LPG to witness a high growth with policies aimed at providing
cleaner cooking fuels and encouraging a move away from solid e-SV
biomass for cooking.
Most of Indian LPG demand comes from the residential
sector, for use as a cooking fuel. Industries are projected to
consume imported ethane along with naphtha from domestic
refineries
Opportunity in LPG market in India lies in Rural Domestic
Segment
Focused strategies needed to address issues of Availability,
Affordability and Awareness
19Questions Thank you
Questions
Key Global Energy Trends
• Weakening energy demand due to decline in China growth, slow recovery
in Europe and shift of fuel mix from Coal to Natural gas in US power sector.
• Increased Supply, due to rapid technology and productivity gains driving
strong growth in US Oil output and growth in other Oil producers like Iraq,
Iran and Saudi Arabia.
• OPEC decided to cut production. However, the global storage inventories
need to be substantially reduced for higher prices to be sustained.
• Non-Fossil fuels grew on the back of growth in new entrants of Solar and
Wind in Power sector, with China becoming the largest generator of Solar
Power.
• Technology costs particularly for wind and solar power have decreased
justifying investments in new capacities.
• Carbon Emissions from energy use witnessed the slowest growth in the
past 2 decades.
Source: Bloomberg, BP Statistical review 2016, Team Analysis
21In India, coal contributes
Questionsto ~ 58% of energy
consumption
2015 : Primary energy consumption comparison
4% 1% Nuclear
2%
3%
7% 7% 4%
Renewables
24% 28%
Hydro
Gas
33%
58% Oil
29% Coal
World (13,147 mtoe) India (700 mtoe)
Source : BP Statistical Review 2016 22Questions
Hydrocarbon Sector in India : Salient aspects
• Third largest consumer of Oil in the world behind US and China.
• Third largest importer of crude oil (188 million tonnes) and Fourth
largest LNG importer (~ 20 Mtoe)
• Produces 0.9% of world oil and consumes 4.5% of world oil demand.
• Produces 0.8% of global Natural gas production and consumes 1.4% of
global gas consumption.
• Consumption of Oil in India grew by 8.1% compared to world growth of
1.9% in 2015.
• Per-capita consumption in Oil is 0.14 toe compared to world average of
0.6 toe.
• Per-capita consumption in Gas is 0.04 toe compared to world average
of 0.4 toe.
Source : BP Statistical Review 2016, MoP&NG
23Questions
Factors shaping the energy sector
Thrust towards Gas and Alternative
Clean fuels and Low energy increasing
carbon emissions significantly
Technology Emergence of New &
enhancement and Unconventional
Cost management sources of energy
24Questions
Plan of Presentation
1 Global Energy Trends
2 Hydrocarbon Sector in India
3 LPG Sales and Challenges in India
4 LPG initiatives for Affordable and Clean Energy
5 LPG Demand Projections and Key Messages
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