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Biomass power plants in a fix in India due to feedstock availability

Panchabuta has earlier opined, the biggest problem in biomass projects is the availability of feedstock and the availability at the right price and usually this varies even within the state and within a particular district this has to be analyzed at a micro market level for the success of the project.

Rice millers in Punjab have had success in developing captive biomass power plants with rice husk as feedstock.

According to reports, burgeoning raw material costs and a mismatch between generation cost and pricing have led biomass power plants to function well below their capacity and, in some cases, end operations.

Against an estimated potential of 18,000 MW, the installed capacity of biomass plants in India is 2,664 MW. These plants are in Maharashtra (403 MW), Andhra Pradesh (363 MW), Karnataka (365 MW), Madhya Pradesh (7 MW), Tamil Nadu (488 MW), Punjab (74 MW), Haryana (35 MW), Rajasthan (73 MW), Uttar Pradesh (592 MW), West Bengal (16 MW) and Uttarakhand (10 MW), among others.

Industry sources said it was difficult to run these plants, as raw material like forest residue, agricultural waste and non-cattle feed was not available even at Rs 3,000 per tonne.

An industry representative said, “The advantage of biomass over other renewable energy is that it can be firmed up, unlike solar and wind projects. Second, biomass projects can be connected to the local grid and, thereby, transmission losses are reduced and decentralised local generation can give grid stability. Ironically, the raw material cost has risen to Rs 3,000 per tonne from Rs 1,800 per tonne. This has made biomass projects unviable. Besides, rates fixed by state electricity regulatory commissions will have to be revised.”

M Komaraiah, chairman and managing director of Shalivahan Group, which has an installed biomass capacity of about 100 MW, said what was paid for power supplied was another major factor after raw material that played a crucial role in making such projects financially unviable.

“Currently, rates range between Rs 3.43 per unit in Madhya Pradesh to Rs 5.46 per unit in Haryana. However, biomass plant operators realise it will be quite difficult to operate projects with rates below Rs 5.46. Recently, Punjab revised it to Rs 5.26 per unit. Several petitions are pending for approval before various state power regulators,” he said.

D Radhakrishna, a power consultant, said, “The power regulator in Maharashtra has increased the rate to Rs 4.98 per unit, from Rs 3.30 per unit, which is also inadequate to meet expenses. The increased fuel cost leaves hardly anything to project developers.”


  1. As I mentioned earlier under this column of punchbuta, that we have a system ( Centrifugal and Divided Space Combustion System) available which can produce 20 Tons / Hr of Steam, with 12 million (1.2 crore) Kcal/Hr, with an input of MSW or any kind of waste 2 Tons (1.66 Ton actual) per hour. The Municipal waste in Metro Cities, especially Plastic waste and other garbage, is available in plenty. Some of the companies are exporting it to Far East, for the consumption in these furnace. The Refused Plastic Fuel is costing them less then 10% of LNG cost, per ton of Steam with double availability of Combustion Temperature, with a 6 times more Calorie Load Factor . Other then forest residue, agricultural waste and non-cattle, Refused Plastic Fuel, waste being petroleum product is one of the best fuels for these furnaces. In fact any waste other then Metal and Glass can be used as fuel in these furnaces.

  2. Biomass projects’s rising raw material costs have made the projects unviable. There is some thinking required here to understand the business dynamics because biomass projects do not make sense on just a contract basis with raw material supplier.
    In case of shortfall of raw material, the plant should be designed for change in raw material also (depending on kind of raw materials available nearby and other factors).

    Sharing some thougths from investors of renewable energy:

  3. It will be difficult for biomass power producers to operate at ANY feed in tariff unless they control the price of feedstock. I find it silly that power producers cry wolf about increasing feedstock price. A key part of the biomass power production model is to have a strategy that can supply them with continuous supply at a predetermined price. If they are not able to get such a contract in place, they should not be getting into the biomass power business in the first place.

    Based on studies done at EAI, if biomass price is kept at or below Rs 2/ Kg, a feed in tariff of 4.5 /kWh will provide decent returns even without the carbon price included. Your returns are commensurate to how well you have thought it out, what do you say?

  4. The issue with the numbers that get quoted about the potential of biomass power in the country is that they seriously under-estimate the competing usage biomass has and the non-substitutability of biomass in these applications.

    The right way to enter biomass power would only be through a strategic long term sourcing of biomass – either like a sugar factory or another agro-processing industry which generates biomass waste. Without these, the biomass power will always remain on the low utilization levels it is currently seeing.

    Out of the new generation expected to come online by 2013, about 65% comes from wind and 27% from biomass. But the biomass numbers, when analyzed carefully show that large chunk – almost two third comes from large scale bagasse cogeneration unit. The non-bagasse biomass is still a challenge.

    – Kedar

  5. Long term strategic sourcing with the likes of sugar factories is hard to find these days due to the competing usage of bagasse for their own co-generation plants. Also for the ones that do not have an alternate usage of bagasse ( like particle board manufacturing, distillery boilers and paper) the procurement procedure is very bureaucratic and non-sustainable. You will find that most of such sugar factories are the “cooperative” ones who have a very rickety and politically inspired hierarchy. Most of the private sugar factories are already using their bagasse to the fullest and are no more selling it in the open market.
    Agro-processing industry, yes thats one thing we should target. Especially these food processing parks that have been licensed by the government (E.g Shirval and Aurangabad).


  6. I wonder why the use of grass like Giant King Grass or Micanthus is not seen as the cheapest and best biomass potential. GKG can be grown on marginal land harvested in the first year of planting and ideal for the climate.

  7. The only solution is actually having your own dedicated biomass plantations. We are working on several such projects & it is not only doable but also extremely profitable. It essentially turns a risky business model into a completely risk-free one with fuel AND price security for 25 years – something that even coal thermal power plants cant boast of.

  8. The other advantage of my above suggestions with CDS (Centrifugal and Divided Space Combustion System) Now we call it KCF (Korea Centrifugal Furnace after patent). We can install the furnace near the power grid, to save transmission losses. And we can install RPF (Recycled/Refused Plastic Fuel) on or near the garbage dump. Our consumption per hour for RPF is only 1.66 Tons actual to run 2.5 MW TG Island setup.

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