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New modeling shows gas demand for power will be down 33% by 2022
Jul 03: Keeping the ear to the ground will be one of the biggest challenges for both suppliers and producers of gas in India
8A new quantitative study shows that India's power grid can absorb 100 GW of solar and 60 GW of wind energy by 2022 and this can be done without the collapse of the grid by improving operational efficiencies, including enhanced cooperation between states and regions.
8This new modeling is based on a detailed production cost model, which simulates optimal scheduling and dispatch of available generation in a future year (2022) by minimizing total production costs subject to physical, operational, and market constraints.
8The result cannot be good news for both coal and gas suppliers.
8There is a 20% reduction in gas supply to the power sector -- from 6.4 MMT to 4.4 MMT -- and a 20% cut in coal.
8The fact that new modeling exercises are calling for a cut in gas consumption instead of an increase needs careful investigation by gas suppliers and those who are involved in the forecast of gas demand in India.
8The entire increase in gas demand will then have to come from the non-power sector, while also absorbing a fall in demand from the power sector.
8Pertinently, this will happen at a time when domestic production of gas from existing and proposed investments are likely to peak around the year 2022.
8LNG imports, particularly by new terminals which are expected to come up by then, are likely to be impacted as will be the landed price of LNG in a scenario where LNG supplies will continue to be in excess of demand.
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