Chairman and Managing Director, Kataru Ravi Kumar Reddy
Brookfield-backed renewable energy company, Axis Energy Ventures, is “about to acquire” technology for underground coal gasification, the company’s Chairman and Managing Director, Kataru Ravi Kumar Reddy, told businessline today.
The Hyderabad-based company was among the two companies—the other being Reliance Industries—that won coal blocks, two each, for producing gas through underground coal gasification (UCG). The Ministry of Coal announced on Tuesday that Axis Energy bagged the “dip extension of Belpahar and Tangardihi East coal mines.” The two mines are in Odisha. ‘Dip extension’ means a deeper part of an existing coal mine, from where it is difficult to mine coal—converting the coal into gas is the only way to use it viably.
Reliance Industries won Recherla and Chintalpudi mines in Andhra Pradesh.
Axis Energy is a wind and solar developer, with 1.5 GW of commissioned projects, 8 GW under development and 30 GW more in the pipeline. It has formed joint ventures with Brookfield Asset Management, a Canada-based global infrastructure and energy investor, for executing different sets of projects.
Asked how the company, which has little experience in UCG, would do such a technologically challenging project, Reddy said that acquiring the technology would help. He said the nature of technology “is confidential as of now” but said he is “very, very confident” of its success. Reddy expects the mines to begin to produce gas in 2-3 years.
UCG projects are typically capital-intensive. Reddy said that Axis Energy envisaged investments of about ₹30,000 crore in the venture, calling UGC the need of the hour. He said that the gas could be used for either power generation—in which case the electricity will help handle peak hour demand—or to produce ammonia.
It may be remembered that the Talcher project for coal gasification was conceived around 2007; a joint venture of four government companies—Coal India, GAIL, Rashtriya Chemicals and Fertilizers and Fertilizer Corporation of India—was set up in 2015. The project is yet to be completed.
Underground coal gasification is an even more challenging task than the surface coal gasification that Talcher Fertilizers Ltd is attempting.
Reddy is, however, confident of making it a success and said that the gas produced would be competitive.
The Ministry of Coal has also expressed confidence in the technology. It said in its press release: “This technology unlocks energy from deep, thin, or otherwise unworkable coal seams that traditional extraction methods cannot economically access, significantly expanding India’s exploitable energy resource base.”
By embedding UCG in coal mine auctions, the “Ministry of Coal has future-proofed these mines, enabling operators to pursue this cutting-edge pathway to cleaner and more efficient energy production alongside conventional extraction.”