CNG poised for significant growth as India focuses on energy transition: Crisil

New Delhi [India], June 21 : The city gas distribution (CGD) sector is at the core of India's energy transition, with compressed natural gas, in particular, poised for significant growth, according to a report by Crisil Intelligence.

This projected growth, according to Crisil, will be powered by government thrust, urban mobility demand, and expanding infrastructure.

With more than 18,000 CNG stations proposed and 12 crore households unlocked through licensing rounds, the momentum remains strong.

"With the top states continuing to anchor demand, the next phase of growth should come from new geographies, backed by evolving gas-allocation patterns, private investments and aggressive vehicle conversion trends," the Crisil report titled 'City Gas Pulse' read.

On the other hand, the competitive intensity is rising, exclusivity periods are closing, and infrastructure gaps are being bridged selectively.

City Gas Pulse provides a sharp, state-wise and player-wise view of CNG demand evolution, infrastructure rollout, investment concentration and market readiness.

CNG is becoming the focal point of India's energy mix and the city gas distribution (CGD) sector's growth as the country works towards achieving a 15 per cent share in the primary energy mix for natural gas.

According to Crisil, expansion of geographical areas and the increasing demand for cleaner mobility position CNG as a viable and sustainable alternative to traditional fuels.

"Regional infrastructure development and readiness play a significant role in enabling wider gas access amid a shift in market focus to electric vehicles," read the report.

"CNG remains competitive despite evolving allocation and pricing pressure," it added.

India meets a sizable portion of its energy needs through fossil fuels, and various renewable energy sources and relatively cleaner energy sources are seen as an avenue to reduce dependence on conventional sources of power.

Green energy for climate mitigation is not just a focus area for India; it has gained momentum globally.

At COP26 held in 2021, India committed to an ambitious five-part "Panchamrit" pledge. They included reaching 500 GW of non-fossil electricity capacity, generating half of all energy requirements from renewables, and reducing emissions by 1 billion tonnes by 2030. India as a whole also aims to reduce the emissions intensity of GDP by 45 per cent. Finally, India commits to net-zero emissions by 2070.

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