The Ministry of New and Renewable Energy has constituted a working group to review issues troubling biomass-based power producers in the country. The group, chaired by Alok Srivastava, a Joint Secretary in the Ministry, will hold its first meeting on June 19.
While India produces 500 million tonnes of biomass, enough to generate 18,000 MW of power, the total installed capacity in the country today is just 1,264 MW. Again, a number of biomass power plants are lying shut because it is not viable to run them.
The constitution of the committee indicates that the Government is concerned about issues facing the sector.
The biggest problem is the rising costs of finance and fuel. Although biomass comes under both the ‘clean energy’ and ‘infrastructure’ sectors, biomass power companies are only able to borrow at rates of around 15 per cent, notes Mr P. Krishnakumar, President, Indian Biomass Power Association, a member of the working group.
As for fuel, the Association has filed a petition with the Appellate Tribunal for Electricity, requesting it to direct the various State electricity regulatory commissions to fix tariffs in such a way that the fuel costs are automatically passed on to the electricity distribution companies, or to fix the tariffs annually.
The Association also wants interest subvention — it wants the Government to bear a part of the interest costs. It estimates that a 5 percentage point interest subvention would not cost the Government more than Rs 50 crore.
It is also seeking the abolition of electricity tax and is asking State governments to allot it unused lands to grow crops for fuel.