Power Ministry revises biomass co-firing policy

The Power Ministry on Tuesday said that it has decided to benchmark the prices of biomass pellets used for co-firing in thermal power plants (TPPs).

The decision comes in view of the evolving market conditions for biomass pellets and requests received from stakeholders including TPPs, pellet manufacturers, farmers, bankers etc, the Ministry said.

“The benchmarked price shall take into account the business viability, impact on electricity tariff and efficient and faster pellet procurement by power utilities. Price benchmarking of pellets will enable TPPs and pellet vendors to establish a sustainable supply mechanism for co-firing of pellets,” it added.

• Read: Meeting green targets through biomass

The benchmarked price, as finalised by the committee under the Central Electricity Authority (CEA), will be effective from January 1, 2024.

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“Till the time the recommendations of the committee are implemented, the power utilities shall go for short term tenders for meeting the immediate requirement of biomass pellets for their TPPs,” the Ministry said.

Co-firing of biomass in coal-based power plants is a key policy of the government towards energy security, reduced use of fossil fuels and at the same time to increase income of farmers. Revised policy shall help in achieving these goals faster, Power Minister R K Singh said.

Explaining the decision, Power Secretary Alok Kumar said the decision would encourage farmers, entrepreneurs and thermal power utilities to strive to establish a sustainable biomass ecosystem, achieve the targets for co-firing, reduce stubble burning and help to ensure a cleaner and greener future for the citizens of India.

In another modification of the policy, it has been directed that since availability of torrefied biomass pellets is presently limited in the country, the torrefied pellets shall only be procured by utilities for which it is technically unavoidable and utilities which can use non-torrefied pellets should utilise the same only.

In line with the biomass policy, which mandates co-firing of Biomass with coal in TPPs, so far around 1.80 lakh tonnes of biomass fuel have been co-fired in 47 TPPs in the country totalling a capacity of 64,350 MW.

Out of this, more than 50,000 tonnes have been co-fired during the first two months of FY24, which has also surpassed the previous highest ever annual quantity.

Further, about 114 million tonnes biomass pellets are at various stages of the tendering process. Purchase order has been placed for around 69 LT of biomass pellets by TPPs.

With the enabling policies in place and thrust from the Ministry through SAMARTH mission, substantial growth of biomass co-firing in TPPs across the country is envisaged.