Energy transitions in developing countries and the role of alternative liquid fuels in reducing energy poverty: exploring the use of domestically produced dimethyl ether (DME) to augment the use of imported liquefied petroleum gas (LPG) as a clean cooking fuel in India

Abstract

The lack of access to electricity and clean cooking fuels is commonly referred to as energy poverty. In 2014, approximately 819 million people in India relied on solid fuels (including wood, crop residue, dung and coal) for cooking, the use of which is claimed to contribute to premature death caused by indoor air pollution, deforestation and gender inequality. In the interest of improved health and wellbeing, the Indian Government is, therefore, promoting a transition to the use of Liquefied Petroleum Gas (LPG) as a cleaner cooking fuel. Dimethyl ether (DME) is a LPG compatible synthetic fuel, and the primary purpose of this thesis is to understand the use of domestically produced DME to offset a growing Indian LPG import requirement. The thesis starts by exploring the links between alternative liquid fuels production and use, human wellbeing, energy poverty reduction and sustainable development (Objective 1). The analysis finds that the proportional share of income used to purchase fuel is larger in developing countries when compared with richer, more developed countries, and that extended periods of high oil prices may exacerbate poverty in developing countries which are dependent on oil imports. In addition to reducing this vulnerability, there is a strong (potential) synergy between the production and use of alternative liquid fuels and several of the United Nations sustainable development goals. These include the provision of affordable and clean energy, promoting economic growth, climate action, reducing inequality and improving health and wellbeing. Affordability is a key driver in the adoption (and continued use) of cleaner cooking fuels globally. Therefore, to be considered viable, the cost of domestically produced DME would have to be equal or lower than the cost of imported LPG. In this context, the remainder of the thesis is devoted to the techno-economic evaluation of producing DME from three different feedstocks, each offering a different greenhouse gas emissions intensity. The first evaluation (Objective 2) is based on the conversion of low-grade Indian coal in Jharkhand, where 18% of households used coal as a cooking fuel in 2011. Based on using a similar (energy equivalent) quantity of coal, it was found that producing DME (with associated excess electricity) would likely require oil prices greater than $73 per barrel to be cost competitive with imported LPG.Additionally, and due to higher overall process and cooking energy efficiency, this approach could result in 36% less coal being consumed when compared with direct use of the coal for cooking and as a means of producing an equivalent amount of electricity. India’s metropolitan cities generate large quantities of Municipal Solid Waste (MSW), 90% of which is disposed of onto unsanitary landfills, creating major environmental and health concerns. This second evaluation (Objective 3) therefore considers the techno-economic merits of reducing some of these impacts by converting a portion of the MSW generated in Kolkata into DME. Results suggest that DME produced from a 50:50 blend of locally available coal and Refuse Derived Fuel (RDF) could provide the cooking needs of approximately 15% of Kolkata’s population, and become cost competitive with imported LPG at an oil price of $130 per barrel. At this blend ratio, the quantity of the fossil fuel derived greenhouse gas emitted through DME production will be more than offset by avoided landfill methane emissions. The third study (Objective 4) investigates the production of DME by combining CO2 released in India’s ethanol plants, with hydrogen gained by water electrolysis using renewable electricity. More than 85% of India’s ethanol is produced in five states, four of which are richly endowed with a renewable electricity generation potential, but the cost of DME produced in this manner is several orders of magnitude higher than the prior two options considered. The production and use of this DME is, however, carbon neutral, and could become viable in the EIA’s “high oil price” scenario if future (US DOE) electrolysis performance targets are achieved, and at electricity costs below $45 per MWh. Although not commercially applied in India currently, the use of fluidised bed gasification technology is likely suited to the conversion of multiple Indian feedstocks into DME, and this approach could facilitate a transition to a lower carbon future. Gasification based DME production costs are very scale sensitive however and, used as an LPG blend stock, the size of plants dedicated to DME production alone are likely be market constrained. The use of neat DME for cooking, or as a diesel substitute, will provide access to a larger market, but require dedicated end-use devices, not yet commercially available. In this respect, the co-production of methanol and DME in larger scale facilities may be beneficial. This approach will require a wider use of methanol (or derivatives) and an assessment of the opportunity associated with establishing a local Indian market, based on the experience in China, is recommended as a next step.