Agenda for the Decade 2023-2032 Financial Plan – Part 1

Financial Plan – Part 1Overview

This is in continuation with our recent article contouring the National Agenda for the decade 2023-2032 wherein we had taken the opportunity to touch upon the various social and industrial aspects that needed attention in the forthcoming decade, for the country to emerge as a major global power. The response to the Article had been enthusiastic and a lot of suggestions/opinions have been articulated on the subject. Apparently, the subject is close to the heart of a large number of people in the country. And why not?

During the various responses to queries, it was indicated that we would be constructing a sequel to the article, wherein, the financial aspects associated with the mega plan would be touched upon. Amongst other things, it would be important to estimate the Investment that would be required to give shape to the plan, as well as the employment that could potentially be generated in the process. While it would be desirable to also evolve the OPEX and the returns towards the investment, however, those assessments may be left for another day. Since the subject is vast, even the financial planning for such a proposition is a long drawn affair.

It was recognized, that the article issued earlier was somewhat long, and there was a distinct possibility of some people finding to go through the same in a single sitting. It was important however, that the entire contour of the plan and its import be appropriately absorbed in one go, and therefore, even while the desire to restrict the length of the Article was strong, it could not be divided into two separate sections as continuity and sustained interest was apprehended to be lost otherwise.

For the financial proposition however, the aspect of restricting the size of the Article perhaps can be addressed better, as distinct categories in which the issue is developed can be segregated, without any issues linked with continuity and loss of interest. Consequently, the financial agenda for the decade has been ?developed in two parts as below.

Part-1 would address the critical aspects associated with the energy sector and traverse all the segments such as Hydrocarbon, Gas, Renewable, Gasification and Water.

Part-2 would be addressing the general economy with an industrial orientation and shall cover the mining and metals, transportation, health and education, IT, manufacturing.?

Sectors such as Defense, Railways, Automobile, Utility Power generation and transmission, Agriculture, Tourism & Culture, Real Estate etc and industries connected with social welfare, are excluded from the analysis as part of this exercise.

In this piece, specifically, we will concentrate on the energy sector and examine the various projects that could be considered and evolve an investment plan for the same along with the cascading effect which it could have on engineering, manufacturing and construction sector. Needless to mention, that investment in the segment pertaining to development of large industrial projects is not only important for the sustained development of the country, but could also be instrumental in generating significant direct and indirect employment.

Energy Sector

The financial investment plan for the decade 2023-2032 addresses the various aspects associated with the energy industry and includes the following in considerations of the same.

1.????Hydrocarbon sector including Refineries, Petrochemical and Integrated Complexes.

2.?????Gas segment and Gas integration, connectivity and penetration in the industry.

3.????Renewable Industry and its impact/ramification in the larger basket of energy domain. This section also deals with the Bio fuels.

4.????Coal Gasification to chemicals to support production of fertilizers, methanol, ethanol and DME.

5.????Water segment to support all the above industries and a lot more.

Consciously, we have not concentrated on the Utility Power Plants and Electricity Generation and Transmission in this article. We reckon that the existing structure would continuously be upgraded for higher efficiencies, even as gradually, the pressure builds on phasing out coal based power plants slowly. While the world is currently in turmoil, it would be very na?ve to make any prognostication with respect to the time frame of phasing out coal based power plants. As things stand, there is likelihood of coal based power generation augmentation across the globe, more particularly in Europe, where geo political tensions have completely upset the apple cart.

Hydrocarbon Sector Geopolitical Ramifications of European Energy Crisis

As covered extensively in our earlier piece, India has already established itself as a refining hub of some standing, but in spite of considerable domestic capacity, recent geo political tensions in Europe almost stretched production to limits!?The cracks between crude and distillates were strong and consequently, the export of the refined products too enhanced substantially. The fact, that the availability of Russian Crude at discounted price was a strong incentive, the country immediately found itself enhancing its crude imports from Russia from about 2% to 12.5% within a span of a couple of months. Discounted price of crude enhanced the cracks even further, prompting the Government to impose windfall profit tax on the abnormal margins that the exporters were making in the process. Its another matter that the Government seems to have saved up to Rs 35,000 Crores between Feb22 and Aug22 as Indian purchase of crude from Russia climbed from 2% to 12 %. All this suggests that the Oil and Gas Sector remains susceptible to geo political tensions.

The Gas segment too, is witnessing near carnage! As Russia is beginning to squeeze Europe with the availability of gas, wide spread panic is visible. Prices of gas have soared stratospherically, and frantic purchases are being made by Europe from across the globe, including the USA. It appears that the gas prices are likely to remain firm for a while and therefore, Europe can be expected to be in serious economic trouble. Availability of gas for heating will diminish and consequently, gas rationing appears more and more likely. Black outs and power cuts which were somewhat intrinsic to the Asian sub-continent, are likely to become a frequent phenomena in Europe, at least for a while. The industry is in serious trouble too, as soaring gas prices is leading to melt down of the steel industry, with almost all the major steel plants in Europe heading for partial or complete closure. Fertilizer production which is critically dependent on availability of Gas, is also witnessing a steep decline, and it would not be surprising, if the production of Chemicals and Petrochemicals too, goes downhill. Almost all refineries and Petrochemical facilities are also likely to be hurt substantially.

The trouble is that it appears unlikely for these troubles to be resolved shortly. While frantic actions are under way to mitigate the energy crisis, environmental control and negative Environmental fallout seems to have been relegated in the background. Coal based power generation and nuclear power plants are back in the reckoning and are beginning to get revived.?In fact, some coal plants are already running to threshold capacity. Trade of gas from USA and Qatar to Europe is likely to enhance substantially, and a lot of Russian gas also will make entry into Europe via China route. All in all the dynamics of geo political energy matrix seems to be changing rapidly. While it was thought, that the sanctions would immediately hurt Russia dramatically, so far the indications seem to be suggesting otherwise, as with escalated prices of oil and gas, Russia seems to be making a lot more money with much lesser quantum of supplies. Additionally, a distinct shift of energy supply is taking place, with China and India enhancing their purchase of discounted crude Oil from Russia and perhaps, in the times to come, lots of LNG as well.?Since Russia is already connected to China through massive gas pipelines infrastructure, Russian gas supplies would continue to meet China’s gas requirements. ?It is possible that China’s LNG import requirements from other countries may reduce in the process as Russia begins to gear up their own LNG infrastructure. Even Japan is witnessing a change of strategy, wherein revival of their nuclear installations is once again under focus as gas prices continue to hit the ceiling. ?All this paints a high priority / agenda for India as well, which is perched precariously, with respect to its energy requirements. ???

As is well known, India imports over 80% of its energy as fossil fuels. While the gas component in the country’s energy basket is only close to 6% of its requirements, even this is a large number. It is natural that slowly and gradually, the intention of penetrating gas into the economy will come under pressure as the prices of imports continue to rule high. It is suspected that even the long term contracts that the country has with other counties, may be put to jeopardy, as Europe perhaps, would indulge in diverting gas from all quarters to secure themselves even at much higher cost penalty. The only silver lining in this game perhaps could be, lifting of sanctions on Iran for flooding the market with Oil and Gas. This of course, at the moment is more of a desire than a practical realization!

Very high energy prices in Europe are likely to push various Nations into recession somewhat quickly, till such time an alternate solution is in position. While revival of nuclear and coal based power plants has already commenced, it is also a certainty that several LNG terminals and renewable energy installations to augment production of green hydrogen will happen sooner than anticipated earlier. While flurry of industrial activity on this front will ensue in the forthcoming months, it is more than likely, that the immediate impact of loss of a large segment of European Industry to high energy prices, will be difficult to obviate through alternative measures in the immediate future. At least 3-5 years span would be required, before an alternative reasonable cost energy solution can be evolved. Till such time, the World at large will unfortunately be subjected to high energy costs. In the long term though, there is likelihood that USA, Europe and Canada might form an energy cooperation axis, while Government of India works closely with Russia – Saudi Arabia - Iran to enable the energy security issues to be combated with realism.

The other important aspect to be kept under vigil is the growing strain in relations between USA and China. It is possible that in the process of giving wind to their strategy, Europe and Canada may also follow suit and try to isolate China to the extent possible.

India on the Edge

For countries like India, the problem is somewhat serious, as not only oil but perhaps in sometime, LNG too may have to be procured substantially from Russia. While Russia does not enjoy availability of the most efficient LNG technology, yet the changed energy dynamics may alter its own course and vision towards expanding their LNG installations base as well.

As things stand therefore, inspite of global turmoil and high crude prices, crude availability may not be a very difficult proposition to circumvent. However the scenario for gas may be somewhat different. While a lot of CGD infrastructure is being created at break neck pace in the country, any major obstruction towards the availability of gas at reasonable prices may imbalance the differential price between natural gas and LPG.?Higher gas price will directly impact the fertilizer segment, wherein huge gas requirements are already committed. Higher gas prices will not only translate into difficulties of current account deficit, but might hurt the subsidy bill associated with the fertilizer segment adversely.?All in all, higher gas prices do not augur well for the country!

The other silent player is Petrochemicals on which, not much discussion is taking place currently. However, it is worthy of notice that the country imports about Rs.80,000 - Rs.90,000 crores worth of petrochemicals annually. With the European petrochemical plants in trouble, there is likelihood of the prices of niche petrochemicals also increasing in the times to come. Right now, of course the way cracks have altered between crude prices and distillates, the margins on the petrochemicals has reduced as the feedstock prices of naphtha and Gas have increased, while the commensurate increase in petrochemical product prices is not possible on the ground.?For some time therefore, the Petrochemical linked margins that were available hitherto, may come under pressure in several new configurations. Consequently, as has been consistently mentioned, countries which remain vulnerable to import of energy, ?will always have their strategy for Hydrocarbon and hydrocarbon linked products to remain somewhat critically dependent on the global pricing and geo political conditions.

For a country as large as India, which evidently is giving indications of robust National growth and development, it will consistently have to evolve strategies through which, its own interests are protected in the longer run.

Another important inference that can be drawn from the discussions is the fact that, fossil fuels are here to stay. It could be a while, before the Oil and Gas related Energy dependence moves on to alternate sources of energy. India in this connection has its work cut out to develop a strategy, which would be clear and succinct, to address the issue not only in its immediate short term future, but for longer periods of time.

Proposition

The Indian Hydrocarbon sector strategy has to be evolved therefore, in perspective of the above. Our estimates and plan envisages that in the decade to follow, at least four major integrated complexes of minimum 20 MMTPA capacity should be envisaged and spread out in the country along the EAST, WEST, South and Central India. ?All these complexes must have the flexibility of swinging between distillates to petrochemicals, to ensure that at any given point of time, maximum revenues can be realized by the promoters. The other important aspect is that the configuration of these complexes must be developed for maximization of feedstock to support world scale petrochemical production captively. On an average, minimum 55% of the throughput should be converted into Aromatic and Olefin intermediates through which, large variety of petrochemicals could be produced, including niche petrochemicals, which currently are predominantly imported.

Upon availability of these integrated complexes within a decade, India will consolidate its strength in refining, while also positioning itself strongly, as a major petrochemical hub. All the new integrated complexes have to be gas and green hydrogen integrated with large number Refinery and Aromatic furnaces and Crackers coupled with renewable energy, for meeting the requirements of heating of the fluids for intended purposes. This way, distillates could be maximized, gas requirements could also be reduced, and above all, CO2 emissions could be dramatically reduced. In addition, SMRs in the complexes could be practically eliminated and the complexes green hydrogen integrated. This will further improve the economic efficiency of the refineries, besides reducing the carbon foot print substantially. Since coal based power plants too, are not likely to be phased out quickly in the Indian context, all these integrated complexes may be fed directly through dedicated grids, for minimizing, if not eliminating captive power generation in these complexes. Typically, CPPs may begin to look more like steam generation facilities catering to process requirements.

About 5000 Kms of gas pipelines, 7500 Km of product pipelines and about 20 odd marketing terminals are envisaged to support hydrocarbon segment initiatives. Additionally, the strategic storages could be enhanced further as large as additional capacity of 15 MMTPA of crude storages could be foreseen. It is reckoned that by the time these complexes are set up, the self sufficiency in distillate products would continue, while substantial export of distillates is also a target. The petrochemical imports could be reduced by about 80% of their current levels.

An order of magnitude estimate suggests that about 5 Lakh crore of investment would be incurred to install these facilities progressively in a decade’s time. The initiative would also support employment to the tune of 200,000 nos of labor and??about 7000 Nos of personnel on permanent roles. Additionally, the cascading effect of 4 to 5 times can be foreseen towards the auxiliary infrastructure and facilities that will come up concurrently to support the segments new facilities proposed.

Gas Infrastructure Consolidation

As mentioned above, gas segment is likely to be under pressure in the times to come. On account of the anticipated shortfall in supplies or high prices, it might have a direct bearing on the CGD and fertilizer segment requirements. Since the domestic production is relatively low and the import dependence is high, with the probability of cargo movement more towards Europe, India will have to find new allies who can support the country with gas supplies.?Russia certainly is going to be one of the major countries on whom the gas dependence will increase and perhaps, in some time to come Iran could be another.

While in the recent past, there has been considerable discussion with respect to the creation of additional gas infrastructure in the country, not many LNG storage plants have materialized, even FSRUs, which have been discussed for quite some time, have not really taken shape in the country. The gas grid currently established in the country consequently, continues to be underutilized. It is likely therefore, that some of these issues might continue for a while. A silver lining perhaps, could be as to what is happening in the Bay of Bengal area, where serious exploration activity is under way in the Krishna Godavari Basin. A lot of country’s woes would stand obviated in case a large gas find is struck in this area. However, this is only subject to what might unfold in future. For the moment, uncertainty continues. India’s strategy of gas to be utilized as domestic fuel in place of LPG is a concerted initiative, and shall continue to remain under focus. This is a positive, as long as gas availability is ensured for the country.

The Installation of LPG terminals is another important area which will also be on the policy radar. LPG in the medium term might emerge as a strong feedstock to the Petrochemical complexes, thereby improving the cost of production of petrochemical intermediates. The critical part however remains, of securing a sure and reasonably priced gas supply, which could keep on displacing LPG as a domestic cooking fuel. While several Cross Country gas pipelines, including TAPI & IPI which have been under discussion for over a decade, nothing much has been realized on the ground on account of geopolitical concerns/constraints. It is suspected, that nothing much on this front will be realized even in the decade to follow, as the geopolitical considerations are not likely to alter in the near future.

On the contrary, the immediate political tensions in Europe may perhaps, provide fillip and momentum to revive an important gas initiative which was undertaken between India and Russia in 2016-17. The scheme for gas transportation at that point of time, envisaged a subsea gas pipeline to be laid by the Russians, connecting Iran to India at a landfall point near Gujarat to serve at least 33 BCM of gas annually. Since both Iran and Russia are major gas producers, the Iranian gas could be pushed into the sub-sea pipelines, while an equivalent amount could be exported by Russia to Iran. This arrangement could be a tripartite agreement between three countries which could provide a very substantial quantum of gas to India, to solve one of its most pressing problems. This pipeline was envisaged to be routed through shallow waters crossing the Indus Fan, with the obligation of the pipeline security in the continental shelf of Pakistan, remaining exclusively the responsibility of Russians, as Owner’s of the pipeline. If need be, to keep the interest of Pakistan alive, a spur line could be connected from this gas pipeline for supply of some gas to Pakistan as well. This way the infrastructure would be secured and gas availability to India could be addressed. We reckon that in the decade to ensue, such an initiative is within the realms of possibility.

As part of the gas initiative therefore, we foresee at least 5 LNG Terminals, 5 FSRUs, 8 LPG Terminals about 1150 Kms of cross country pipeline between Iran, India, an incremental gas grid to the extent of 20 lakh Kms in the country. While we have our fingers crossed, but in case a major gas find is realized in the Bay of Bengal Region with the efforts of both the private and public sector companies, the gas matrix of the country could alter significantly. With these initiatives maturing in the positive, one can expect the gas component in the energy basket of the country to at least reach 15% by 2032, if not more, with considerable amount of gas also allocated to the existing refineries and new integrated complexes.

Renewable Segment

Across the globe the discussions of the energy segment in the current times is focused around renewable energy. Even while the world is waking up to the benefits of renewable energy, it may not be out of place to mention that India had already launched itself strongly in this domain over the past 5-8 years. As much as 175 GW of renewable capacity by 2022 and about 500 GW capacity by 2030 or thereabout, is already committed as part of the Nation’s aggressive renewable agenda. This is a strong positive. Additionally, while wind energy has essentially been exploited in certain pockets onshore, plans are already underway to even look at offshore wind energy and its benefits lot more closely.?This is simply because prices of wind energy too, similar to solar energy, have dropped precipitously.?Both solar and wind therefore, are important initiatives which are likely to unfold seriously in the decade to follow.

Bio Fuels

The other major segment where non conventional energy is making a solid contribution is the arena of bio-fuels. While bio-diesel has not been subject of great interest in the country, on account of its direct conflict with agricultural farming, ethanol and bio-CNG have secured a strong place for themselves in the energy basket. With E-10 having already been achieved in the country, the focus is now clearly on E-20 and the Government is encouraging the industry to augment its ethanol production substantially from agri-waste. Therefore, Ethanol and Bio-CNG, both are important subjects on which considerable investment and a fairly large investment is likely to unfold in the forth-coming decade. This initiative gains further credence as both Bio-CNG and ethanol are supporting in rationalizing the fossil fuel import bill.?

Green Hydrogen

The critical area however, around which the Nation is likely to witness serious investment and progress centers around the developments that are unfolding in the arena of green hydrogen. Green hydrogen production has already been launched as a mission by the Government to exploit the low price of solar power between Rs.2 to Rs.2.5/Unit. This is an opportunity which cannot be allowed to go awry by an energy starved Nation like India. The plans for mega investments by the private sector and the public sector to build domestic capacity, not only to produce electrolyzers indigenously, but to establish large green hydrogen manufacturing capacity have already been announced. All these plans are mega in nature in terms of Vision and Investment. Green hydrogen which currently is being priced at $ 5 to $ 6/Kg is likely to be brought down to $ 1 to $ 2/Kg in this decade, which would involve India Inc. to put together a strategy by which indigenous manufacturing of electrolyzers and its associated engineering nuances are mastered to ensure that reasonably priced hydrogen remains a focused objective. Once this happens, the complete energy matrix of the country is likely to alter.

Integration of green hydrogen to refineries is bound to happen, leading to displacement of a lot of naphtha which is currently utilized to produce hydrogen in the refineries. This displaced naphtha could be utilized either to enhance the gasoline pool or to find way as petrochemical feedstock for enhancement of aromatic & olefin intermediates.

Similarly green hydrogen would lead to production of large quantities of green ammonia by synthesizing green hydrogen with nitrogen, which in turn, could be utilized for production of urea, by securing CO2 recovery from refinery and petrochemical complexes. This will lead to significant cost savings in terms of reduction in gas and fertilizer imports, reduction in subsidy bills, and also reduce carbon foot prints of the hydro carbon complexes for enabling the country to move a step ahead towards carbon neutrality. All in all, this would be a significant game changer for a country like India, which is so heavily dependent on energy import. A natural fall out of green hydrogen availability additionally, would be to create fuel cells which in turn could facilitate displacement of distillates. This could be extremely critical in supporting the country to reduce its current account deficits, largely resulting out of import of fossil fuels and the corresponding subsidies. The key lies in successful implementation of the green hydrogen initiative by creating the necessary infrastructure through which indigenous manufacturing and construction of these plants could be initiated on fast track.

As per our estimate about 8 MMT of Green hydrogen (50 GW Equivalent), about 15 numbers of green Ammonia/Green Urea plants of world scale size (60% Export), about 2500 Bio plants pertaining to Bio CNG and Ethanol from a variety of Agri-Feedstock, and about 30,000 MW of Wind Power production linked facilities ought to be installed as a minimum, in the forthcoming decade

This certainly would be a major step towards securing the energy requirements of the country wherein the fossil fuel import bill would be substantially curtailed and in fact, a large part of the import bill could be substantially minimized, as green Ammonia or green Urea could be exported in large quantities.

Gasification/Methanol/Fertilizers

Over the years there has been a lot of discussion with respect to the gasification technology. It is a travesty for the country that in spite of being a second or third largest producer of coal in the world, India’s attention to coal has been restricted to coal based power production only.?And now this too is coming under serious pressure on account of environmental considerations. Alternatives, with respect to utilization of coal as an important constituent for meeting the energy requirements of the country, partially if not completely, has some-how not invited the attention of the policy makers as much perhaps, as it should have. Consequently, India has remained vulnerable to energy import, particularly fossil fuels, and continues to be subjected to price volatility shocks associated with fossil fuels. This invariably, almost always, keeps the Nation at an edge of a precipice.

It is well known, that Indian coal has serious quality constraints as it is laden with significantly high ash content, which prevented it from being exploited for usage as feed for gasification technologies in particular. Either an upstream washery would be necessary to remove the ash from coal, or alternatively, petroleum coke/high quality coke will have to be blended with indigenous coal in a suitable ratio, to ensure that the ash content of the blend is brought well below 30% to support gasification of the blend. ??A blend of coal + pet coke / high quality coal could be gasified in a manner, such that the intent of the system is more towards chemical production rather than power production. This would amply lower temperatures in the Gasifiers. The other important consideration is the fact, that gasification leads to production of significant quantities of carbon dioxide, which in totality should be consumed within the gasification block, such that no CO2 is emitted to atmosphere.?Once this is achieved, the gasification process certainly would begin to invite the attention and interest of policy framers.

The synthetic gas produced after gasification could be cleaned in a Rectisol section, wherein all acid gases could be removed and utilized for production of sulfur or sulfuric acid. The synthetic gas free from acid gases could be routed to the shift section where in presence of steam, carbon monoxide could be shifted preferentially in favor of production of hydrogen, thereby ending up producing a lot of carbon dioxide along side. A part of the synthetic gas prior to shift could be utilized for production of methanol, which subsequently could also be utilized to produce DME and ethanol.

The hydrogen produced in the process could be combined with the nitrogen from the air separation plant to produce ammonia. The entire CO2 produced in the process could be combined with the ammonia to produce urea, as well as?partially utilized to maximize production of methanol.?Tail gases from the back end of the PSA Unit of the shift section could also be utilized to produce ethanol by utilizing microbe based environmental friendly processes. All the ethanol & methanol could be used as blend streams for the gasoline pool, whereas DME could be utilized to supplement the diesel or LPG pool. All in all, the distillate pools could be enhanced substantially through usage of coal as a fuel, thereby directly facilitating reduction of crude imports and enhanced energy security.

Since CO2 is completely sequestered in the plant, significant quantity of urea could be produced from the complex. This would correspondingly benefit by reducing the gas import commensurate with the production of urea from the complex. It may be noted, that the cost of production of urea from the gasification complex is the lowest, and therefore significant economic advantages could be to be realized. A significant gasification capacity can alter the hydrocarbon map of the country dramatically, wherein gas and crude imports could reduce substantially and domestic coal could be utilized more optimally. It is encouraging to note that the Government has already announced gasification of about 100 MMT of coal by 2030. However, we would envision that this quantum should be enhanced by at least four times to realize its maximum possible benefits for the most economical production of distillates, fertilizers to substantially reduce not only the import bills, but also take advantage of reduction of subsidies associated with the fertilizer and hydrocarbon segment. This could truly be a game changing initiative for the country.

It is envisaged that at least 10 gasification complexes each processing between 25-30 MMTPA of coal must be put together, such that a world scale ammonia urea complex of 3850 TPD of urea production and methanol to the tune of 5000 TPD/ complex and Ethanol to the tune of 200,000 TPD and about 150,000 TPD of DME production is envisaged from each of these complexes. Certainly the hydrocarbon map of the country would alter significantly once these plants materialize.?A total Investment of about 4 Lakh Crore is foreseen towards the setting up of these facilities generating a labor employment of 600,000 personnel and about 10,000 personnel on permanent rolls.

Water

To serve the social and industrial requirements, the water segment is a critical area, around which a lot of strategy and focus will have to be developed to ensure that water requirements are rationalized and addressed appropriately.?It is well known, that most of the globe is likely to face a water crisis in the times to come, and off-shoots of the same are already being witnessed in India as well. Around the year, except for the monsoon season, most of the rivers are bereft of water thereby, directly impacting the flora and fauna of the country. While over the years, water has remained under focus, the water connected investments and capacity creation has a lot of catching up to do, if the requirements of the Nation are to be appropriately addressed.

It is well known that about 60-70% of the water utilized in the house-holds is generated as waste, which finds way into various outlets. A lot of surveys and reports reveal that the capacity of Sewage and Water Treatment Facilities provided in the country, are far below the required capacity to treat the waste water. Consequently, a lot of waste water finds its outlet into rivers, canals and rivulets.?At the outset, therefore, it is important that commensurate waste water treatment plant capacity is established in the country, such that most of the waste water could be treated and perhaps facilities considered for its recycling as well. The important part would be to ensure that at the tail end of the Water Treatment Facilities, RO membranes are provided to recover low TDS water (200 ppm) which could be utilized as service water while the treated reject from RO could be routed to meet the agricultural requirements, as well as replenishing the rivers with clean reject water. This will not only ensure that the agriculture sector is appropriately provided with requisite quantity of water for irrigation, but also rivers and their health would be restored substantially. In fact, a large number of such initiatives have already been implemented as part of the Namami Gange Program to ensure, that the sewage and other waste water is not diverted to the rivers and instead, finds way into the treatment plants for being appropriately treated and recycled. ?

India is plagued with severe ground water table depletion. States like Punjab & Haryana are dependent on tube well water extensively, which ends up doing more harm than good to the overall Water Management System. Consequently, once ?municipality waste water treatment plants are in position with recycling facilities, water recovery from tube wells could be reduced, if not eliminated, such that ground water table does not deplete beyond acceptable levels.

It is important that a Pan India plan for recycling of waste water generated from the house-holds must be in position in the forthcoming decade. The capacity of the waste water treatment plants should be about 10-15% in excess of the anticipated waste water from the residential facilities and small industries. A fair degree of water security will be ensured in the process wherein the society’s service water requirements are completely addressed, and the balance service water is routed to industries.

Nature has gifted India with a vast coast line which creates huge opportunity for establishing facilities for desalination of sea water, for generating industrial water, such that industrial plants do not have to exploit the natural resources to meet their water requirements from rivers, canals and rivulets. This will ensure health of the rivers to be restored, which in turn will have a positive ecological impact.?The soil quality will improve and receding greenery will find its natural way of being rejuvenated. It is encouraging to note, that some of the major installations have already commenced the process of setting up desalination plants to meet their water requirements. For instance Mangalore Refinery is one of the first one’s amongst the PSUs to set up a seawater desalination plant, which is expected to supply water to the refinery and enable release of the water currently sourced from a river to be diverted for meeting alternative social requirements. This is an important way through which, both the industrial and social requirements could be met and ecological water balance could also be sustained. The mega refinery of Reliance at Jamnagar also meets its water requirements through the process of thermal desalination of sea water. The facilities thus established not only cater to the requirements of the refining complex, but also produces surplus water for meeting the requirements of the adjoining city.

It is proposed that along the entire coast line as many as 30 nos. of desalination plants each of over 1500 M3/hr capacity are established in the forthcoming decade such that, these desalination plants produce industrial water of raw water quality to meet the requirements of Refineries, Petrochemicals, Utility Power Plants, Steel Plants, Non-Ferrous Metallurgy Plants. These plants could be powered through a renewable power grid to ensure that the price of power charged for these desalination plants is compatible with what is being proposed for the green hydrogen plants. This would emerge as a major win-win as the price of water produced from the desalination facilities would reduce dramatically as well as the requirements of sourcing power from other power grids would stand obviated. It is a fact, that cost of the desalinated water is directly related with cost of power. Since the renewable power led by solar and wind has already witnessed a steep decline in the prices, the industrial water through the desalination route could be produced at very reasonable prices.

Immediately upon this being in position, all the rivers in the peninsula will begin to flow round the year and gradually, the pristine ecological balance would be restored. In addition to the above, water harvesting, particularly the rain water from residential colonies and buildings of industrial plants, is also a serious avenue through which water management and replenishment of ground water table can be ensured. Across the country, this needs to be launched as a campaign, such that maximum water can be harvested through it.

For major cities and towns which have plans to transform into smart cities or for new smart cities formed out of villages, an important way of harvesting water could be by building underground water tunnels, which could house all the buried services for the smart city such as fire water, waste water sewage, drinking water, service water, CGD along with electrical and instrumentation cabling connectivity for the city. These water tunnels could be equipped with manholes, which could remain open during rainy season to allow water storage in the tunnels up to designed capacity. Through the same manholes water evacuation, through pumping systems could be installed to cater to the city requirement during dry seasons.??This facility would also augment the net storage capacity of water to be used for catering to the residential requirements, as well as service water requirements for the city.

??As part of the water distribution plan, for main trunk lines 10,000 Kms of pipeline and for irrigation purposes about 100,000 Kms of small size piping is estimated to be installed in the next decade for complete water management cycle to be established. This water distribution network also includes the piping work that is under progress with respect to the Government of India’s JAL to NAL Scheme.?In addition to the above, about 2000 Kms of open canal is also envisaged to cater to various water distribution requirements.?About 30 desalination plants and 100 municipality water treatment and recycling plants are foreseen to be installed during the forthcoming decade.

Total Investment and Employment Potential

All the segments associated with the energy sector including Hydrocarbon, Gas Installations and Grid, Renewable, Gasification and the water segment would involve considerable investment, if the plans as highlighted above are to be undertaken.

We reckon that inspite of all the noise with respect to fossil fuels, India will possibly be investing substantially in the Hydrocarbon segment. Our estimates suggest that as high as 41% of the Investment may possibly be linked with Hydrocarbons and facilities thereof. The Investment towards the Renewable sector including bio fuels will perhaps be close to about 35 % of the total investment. The gasification and water segment will share the balance investment.

We reiterate that Coal mining, Nuclear Power, additional Hydropower, Power generation and transmission other power related infrastructure, other than that connected with renewable energy, in not included in the analysis at hand.

Our estimate reveals that about $ 4060 Billion of investment would be required to establish all the facilities mentioned above in the forthcoming decade split variously as above.

The total employment potential generated out of this investment over a period of decade would involve employment under two categories, the labor component and the other involving creation of additional permanent jobs. Our estimate reveals that about 2.6 million jobs for labor and about 130,000 Nos permanent jobs could be created. This would certainly be a win-win with respect to the investment in the employment generation thereof.

The above estimates of employment do not include the cascading impact of the additional employment that will be generated through various other facilities such as fillip to manufacturing support to construction, IT and Bank etc. Basic infrastructure development a safe estimate could be roughly to be approximately 3 to 4 times of the nos. estimated above.

With the above installation of plants, it can safely be assumed that while the Oil and Gas import would continue it would reduce substantially, perhaps the petrochemical import could be brought down to a maximum of 10% of the current levels. Also the net crude and gas import would reduce by about 40% of its current levels on account of the penetration of green hydrogen, bio-fuel, green ammonia, green urea led facilities. Along with the above, the broad water Management plan to curb the degradation of forest cover would be addressed substantially, as the river waters begin to appear as perennial source of water. The average agriculture produce per hectare is expected to at least double from its current levels.

Hopefully, the Policy framers might like to examine the above directional analysis with an open mind to have the Nation guided in a trajectory which sets it up as a force to reckon with, by the time it completes 100 years of independence till 2047. If the decade 2023-2032 can be guided well the decade and the half to follow could emerge as the Golden era for the Nation!

?Jai Hind! Jai Bharat!

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