On whirlwind trip Down Under, Piyush Goyal seeks to broaden LNG, renewable and coal deals with Australia
During his visit to Australia for the third India-Australia Energy Security Dialogue on 9 February, India’s Minister of state (independent charge) for coal, power and new and renewable energy Piyush Goyal, stated that the two nations’ “amplifying bilateral relationship will create a truly energised world”.
At his first stop in Queensland, as he initiated collaboration with the government’s Centre for Virtual Mining Safety in Mines Testing and Research Station, Minister Goyal announced that India was looking to magnify cooperation in skill development in the mining sector by setting up training centres in five states of India.
“The current skill development engagement with Australia was at a scale of 20 people per year. This will be scaled to thousands through Indian centres, e-learning as well as on-site training. This will include leadership training as well as training on mine operations and safety,” Minister Goyal said in a statement after an industry-academia round-table on skill development.
Since 2014, the global surfeit has been helping India’s appetite for cheaper energy supplies from other countries. “India is open for business, with eyes on to buy cheap LNG from Australia,” said Minister Goyal.
Prime Minister of India Narendra Modi is seeking to broaden the country’s renewable power capacity fivefold to 175 gigawatts in seven years as well as revive the stranded gas-based plants with subsidised fuel.
An outcome-based strategist, Minister Goyal said Australia and India will prepare a road map within two months outlining the possibility of supplying LNG to India at prices that compete with coal to produce electricity. Coal-based electricity is available in India at less than 5 cents per unit.
“Opportunities to control the entire value chain right from gas production, liquefaction, shipping, re-gasification and power generation can be evaluated at the current historic low prices of many of these activities,” said Minister Goyal.
With the oil demand forecasted to reach 10 million barrels a day by 2040, the natural gas consumption is anticipated to triple and power generation predicated to quadruple for new 600 million consumers. India’s electricity generation requires 800,000 MW (approximately four fifth of US in recent times).
Minister Goyal added that “climate justice” demands rich nations do more in response to global warming and that it would be unfair to deprive India of low-cost energy from fossil fuels when per capita carbon emissions in developed countries is high. He said the Adani Project will add more employment opportunities for Australia and enhance GDP.
“A deep engagement in the energy sector can become the defining feature of Australia-India economic ties,” he said, but cautioned that delays to Adani’s Carmichael mine could take a toll on investor confidence.
Australia, forecast to overtake Qatar as the world’s largest supplier of super-cooled gas by 2020, is boosting its exports which will add to the global glut. The global market will be oversupplied by 14 million to 21 million metric tons a year in 2018 to 2021, according to Credit Suisse Group AG.
“Resources are to the Australian economy what the baggy green is to Australian sport,” said Australian Minister for Resources, Energy and Northern Australia, Josh Frydenberg, referencing the iconic cap worn by the Australian national cricket team. “Totemic. Iconic. Indispensable to our national story and synonymous without national identity,” he said. Minister Frydenberg alluded on the Indian demand – particularly for evolving thermal coal – noting what Minister Goyal said during his recent visit to Australia about expansion of coal-based thermal power.
India’s steel consumption is also comparatively low, offering opportunities to increase metallurgical coal imports as demand grows. Unlike thermal coal, India lacks the good quality metallurgical coal that is Australia’s speciality.
Nuclear power is the next choice for India; under current policy, it will increase reactor capacity seven-fold and the IEA expects reactor output to be as much as solar power in 2040 and nearly as much as wind generation.
Minister Goyal’s main agenda was to discuss how Australian business and service organisations can help India meet its ushering ambition —and create opportunities for both countries.
India and Australia are now collaborating with a joint sub-group, to include senior officials from the government and industry from both sides, to prepare a roadmap on streamlining issues that would help in providing cheap LNG for power plants in the Asian country.
Representatives from PSUs such as NTPC, GAIL and Petronet LNG will also be a part of the group. It will also have two representatives from private firms who have gas-based power plants, said Minister Goyal.
This sub-group, in about two months, will submit a detailed report on action and requirements on how power plants can get cheap LNG from Australia, the Minister said.
This group will prepare a roadmap on what steps need to be taken from both the sides so that power producers in India can get access to cheaper LNG from Australia, he added. He said LNG Industry needs to embrace a new gas field to power plant end-to-end integrated supply chain model, to push the gas delivery price down far enough to make it competitive in India.
“Building a sustainable planet is PM Narendra Modi’s vision,” the Minister tweeted after the meetings.