NGV market has the potential to create new job opportunities, help small and large businesses reduce costs of operations and the country achieve Forex savings - Nomura Research Institute
NGV market has the potential to create new job opportunities, help small
and large businesses reduce costs of operations and the country achieve Forex
savings”: Nomura Research Institute
India‘s bio-CNG generation potential, once fully realized, can meet the
current natural gas demand of the country and can power 54 lakh additional
vehicles
Mumbai, 26th May 2022: With
fuel prices soaring and electric vehicles becoming prohibitively expensive for
most Indians, vehicles that run on compressed natural gas could be considered
as a welcome relief and alternate fuel for mobility. A recent report by NRI
(Nomura Research Institute) Consulting & Solutions titled as Path
to clean mobility: Increasing penetration of NGVs in India released at the
Messe Frankfurt’s NGV India Summit, 2022 , highlights some of the major
trends across the Natural Gas Vehicle (NGV) ecosystem that are disrupting the
automotive industry.
The report states that, with increasing focus on blue hydrogen as a
bridging solution, Natural Gas can play a key role in transition towards
hydrogen economy. It further added that the expansion of the CGD (City Gas
Distribution) network and increasing number of CNG stations is expected to
encourage the proliferation of NGVs.
With increased differential TCO (total cost of ownership)
benefits compared to other fuels, CNG is gaining more prominence among consumer
preference post BS VI. The technology is now well established in India
with major OEMs concentrating to bring in a range cost efficient and fuel
efficient CNG variants.
Megatrends
in NGV Space:
Increasing NGV Penetration
- 5.3% growth rate in the no. of CNG vehicles from March ’18 –March’
22
Improving Fuel Infrastructure
- CNG fuelling stations growing at a rate of 32% from March ’18-March
’22
Improved Customer preference for CNG
- Total Cost of Ownership of NGV is better compared to Diesel and
Petrol
Increasing focus of OEMs on NGVs
- New CNG Models launched across Passenger Vehicles & Commercial
Vehicle segments
Upcoming alternative sources of CNG
- Bio-CNG plants that are being set up can act as alternative sources
of CNG
Supporting Regulatory environment
- Favourable regulations and policies to accommodate growth of NGV
segment
However, the report underlined the
following challenges too:
- Availability of domestic
natural gas
- The domestic production of
natural gas is much lesser than the reserves, investments in exploration
& production are needed
- Increasing gas prices leading
to unfavourable CGD economics
- Increase in CNG prices and
greater imports will make the economics unfavourable for CGD players and
impact network expansion
Ashim Sharma, Senior Partner & Group Head, NRI Consulting &
Solutions, said, “The immense volume and favourable
conditions of the Indian automobile market give an opportunity to promote
widespread adoption of NGVs in India. However, higher gas prices will
exacerbate the CGD industries' already unfavourable economics, limiting network
expansion and negatively impacting consumer experience. The government,
industry, and CGD companies must all work together for India's NGV market to
thrive in the future.”
The study laid down the following
set of solutions to deal with these challenges:
- Boosting NGV adoption through
incentives and infrastructure development will help in establishing
economies of scale in manufacturing and hence, reduce costs
- Use of composite light-weight
materials in CNG components will help in reducing the vehicle weight
- Type IV tanks can be used to reduce the vehicle weight
No comments