Lt Col Monish Ahuja, Managing Director, Bermaco Energy Ltd, provides an insight into the biomass energy sector in India.
What is the current scenario with regard to biomass energy in India and what is its potential?
Biomass-based power generation is renewable, widely available, carbon-neutral technology and has the potential to provide significant employment and income generation in the rural areas. Unlike other renewable energy sources, biomass power is capable of providing firm energy at PLF (Plant Load Factor) of more than 80 per cent on an annualised basis. About 32 per cent of the total primary energy use in the country is still derived from biomass and more than 70 per cent of the countryÂ´s population depends upon it for its energy needs. The biomass power generation industry attracts investments of over Rs 600 crore every year, generating more than 5,000 million units of electricity and yearly employment of more than 10 million man-days in the rural areas. The current availability of biomass in India is estimated to be about 500 million metric tonnes per year. A study sponsored by the government has estimated surplus biomass availability at about 120-150 million metric tonnes per annum covering agricultural and forestry residues corresponding to a potential of about 17,000 MW. In spite of such high potential, the achievement till 31st July, 2013 was only about 1263.80 MW.
What are the barriers to the development of biomass WTE projects?
Non-uniform norms for determination of tariff for procurement of power from biomass-based power plants across various States, is one of the major barriers. The CERC (Central Electricity Regulatory Commission) announced the new tariff determination regulations for biomass power plants on 15th May, 2014. However, many State electric regulatory commissions (SERCs) still do not adhere to CERC norms but follow their own norms which results in low tariff and unviable operations of biomass power plants. Also, irregular tariff revision particularly of variable component of tariff has still worsened the situation. Secondly there are policy incentives for biomass power by both the Central and State Governments. However, due to highly bureaucratic and lengthy procedures, the biomass power plants are unable to avail of incentives like capital subsidy or land allotment for dedicated energy plantation, etc. Due to default by many operating biomass power plants, banks/financial institutions are reluctant to provide debt financing to new projects. Even if they are willing, interest rates charged are exorbitant (in the range of 13 per cent to 15 per cent) resulting in stressed financial situation for biomass power plant owners.
Despite wide availability of biomass waste, we understand that the industry faces some hardships in procuring it. How is this being resolved?
Before setting up any biomass power plant, a detailed biomass resource assessment is done in the catchment area around the proposed site. Once the plant starts operating and biomass drawl begins, local farmers and traders, realising the true value of biomass, begin hoarding it or escalate the price-leading to unviable plant operation. There is also a need for special manpower and machinery to collect, process and transport biomass to the power plant. This situation can be overcome by either going for dedicated energy plantation in waste land or entering into long-term fuel supply agreements with specialised biomass supply and processing companies like Punjab Renewable Energy Systems Pvt Ltd (PRESPL). PRESPL has proposed to develop alternate sources like biomass based IPPs (Independent Power Plants) and CPPs (Captive Power Plants) and has tied up with biotech companies to develop special plant species that can be grown in cultivable waste land and fallow land. PRESPL, which is optimising fuel purchasing through analysis, processes, technology and integrated networking, has provided Energy Plantation for Punjab Biomass Power, Oleander Farms and Tata Power. PRESPL, which has been investing in people, processes and technology to resolve fuel management challenges of biomass power plants, is supplying about 1,000 mt of various biomasses such as paddy straw, cotton stalk, maize cob, cane trash, mustard residue etc., on a daily basis to several power plants in Maharashtra, Karnataka and Punjab.
According to you, which sector (public or private) clients are more interested in WTE conversion projects and why?
Certainly, private sector clients are more interested in WTE projects. Many big corporates such as Tata Power, Reliance and Kalpataru Power have realised the potential of base load power generation as well as (the potential to) uplift to rural economy from biomass power. Some of the corporates are investing in biomass power generation as a CSR activity. On a conservative basis, for every 1 MW of installed biomass power generation capacity, there is rural income and employment generation in the range of Rs 1.5-2 crore due to biomass sale by farmers, employment to rural youth in fuel logistics and operations and maintenance of power plants. MNRE is also working on providing various incentives to the biomass sector in terms of generation based incentives (GBI), interest subvention etc.
Talk us through the biomass energy projects developed/being developed by Bermaco. Bermaco has developed 12 MW biomass based power project, Punjab Biomass Pvt Ltd, in village Baghaura, in Patiala district, Punjab, a first-of-its-kind in the world to be successfully operating on 100 per cent rice straw as fuel. Set up at a cost of Rs 75.25 crore, it was commissioned in November 2010. Rice straw is one the agri-residues which was simply burnt in the fields or left to decay earlier in the State. This power plant has not only demonstrated how this valuable agri-waste can be converted to energy, but also stopped environmental pollution caused by its burning.
We have been awarded three more projects, one each by the governments of Punjab (9 x 12 MW aggregating 108 MW rice straw-based power project); Bihar ( 26 x 12 MW aggregating 312 MW) and Tamil Nadu Energy Development Authority (aggregating 120 MW) in the respective States.
– Janaki Krishnamoorthi