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Biomass plants across Tamil Nadu shut shop

According to reports, biomass-based power plants across Tamil Nadu are going quiet. Over the last few weeks, many companies have shut down their plants as they no longer find it viabletooperate atthecurrent tariff. The recent withdrawal of power cutsfor industrialusers has made the situation worse as the little revenue that biomass power producers earned by selling to these industries,has also dried up.

According to data from the Ministry of New and Renewable Energy, the state has 488.2MW of biomass power and co-generation projects in the country. Of this, 170MW of power is generated from around 20 exclusive biomass plants, located mostly in rural areas.

“All our plants have been shut down for the past 10 days ascompanies are nolonger under pressure to buy from us,” said P Krishnakumar, managing director of Orient Green Power, which owns biomassbased power plants of about 60MW of capacity in the state. Several companies have backed out of the power purchase contracts signed, he said.

Plants of several players like Empee Group, Auro Mira Energy, Orient Green Power, Synergy Shakthi have been shut, industry sources said, and added that even those operating aredoing so at very low capacities.

“Our 10MW plant is operating at a capacity of just 2.5MW and even this will be shut in a few days,” P C Gopalakrishnan, general manager (corporate), ETA Power Gen Pvt Ltd, said. While companies will not immediately write off the assets, the units will not be in operation until a solution is in place.

Existing contracts are not viable either, companies say. Currently, the companies are paid 4.58 per unit if they sell to the state utility, and 6 if they sell to third-party buyers. “With prices of the feed going up, it is not viable to operate,” said Gopalakrishnan.

Biomass power plants use agricultural waste and forest residue like bagasse, rice husk, straw, cotton stalk, coconut shells, soya husk, jute wastes, groundnut shells and saw dust for power generation and close to 60% of the income of the plant is used to source the feed. Biomass power producers are in talks with the state electricity regulatory authority to revise tariffs from 4.85to around 6 a unit.    

Shutting down plants will not just affect power generation,but also employment, given the intensive involvement of the agricultural community across cropping, segregation, collection, processing, storage, handling and supply logistics for the supply of biomass, Gopalakrishnan said. On an average, about1,000 people are employed per MW of biomass power production.

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