Meeting green targets through biomass

Green energy is not only about solar and wind, but about biomass too. Biomass today is an important fuel in many countries, especially for cooking and heating in developing countries and over the years its use as fuel for transportation and electricity generation has been increasing.

India’s focus on this segment of green energy also comes from the statements made by the Prime Minister Narendra Modi. In his statement at the recently held COP26 summit, the Prime Minister said:

“In the midst of this global brainstorming on climate change, on behalf of India, I would like to present five nectar elements, Panchamrit, to deal with this challenge.

“First — India will reach its non-fossil energy capacity to 500 GW by 2030.

“Second — India will meet 50 per cent of its energy requirements from renewable energy by 2030.

“Third — India will reduce the total projected carbon emissions by one billion tonne from now onwards till 2030.

“Fourth — By 2030, India will reduce the carbon intensity of its economy by less than 45 per cent.

“And fifth — by the year 2070, India will achieve the target of Net Zero. These panchamrits will be an unprecedented contribution of India to climate action.”

Though the government has been taking steps to make it an important part of India’s energy basket, the latest being a move to mandatorily push for biomass co-firing in the thermal power plants as a means to reduce carbon dioxide emissions from fossil fuel, concerns remain on how successful this effort will be.

It will be successful only if it finds full acceptance among the stakeholders, particularly power generation companies and distributors. Since it is a policy and not a regulation, making it mandatory may not mean much. Also there are questions over its cost and quantity and quality. Procurement as well as right price and quality may prove to be the most critical aspect.

Also while State power generation companies will be able to manage the increase in cost due to biomass pellet co-firing by claiming Under Change in Law provisions, clarity on regulatory mechanism of pass through for open capacity was also needed, industry observers feel.

Supply chain needed

Therefore, there is a need to establish proper supply chain and ensure adequacy of stock to achieve the 5 per cent requirement, which increases to seven per cent from the second year. There is the issue of additional cash flow burden on independent power producers (IPPs) due to this transition, especially as the IPPs are already in stress due to distribution utilities defaulting on payments.

Recently, the Union Power Ministry reviewed the status of biomass utilisation in thermal power plants. The revised Policy on Biomass utilisation for power generation through co-firing in coal based power plants was issued on October 8. This policy was revised as the earlier policy was an advisory issued by Ministry without any mandatory use of biomass.

The Power Ministry on November 17, 2017, had issued policy on biomass utilisation for power generation through co-firing in coal based power plants. In the earlier policy, it had advised coal based thermal power plants, except those having ball and tube mill, of power generation utilities, to endeavour to use 5-10 per cent blend of biomass pellets made, primarily, of agro residue along with coal after assessing the technical feasibility and safety aspect.

In order to further support the energy transition in the country and to achieve the target of cleaner energy sources, a modified policy was issued on October 8, 2021. This policy is expected to provide the necessary direction in achieving the goals.

The salient points of the “Revised Policy for Biomass Utilization for Power Generation through Co-firing in Coal based Power Plants” were:

(i) Mandating all thermal power plants to use 5 per cent blend of biomass pellets made, primarily, of agro residue along with coal with effect from one year of the date of issue of this guideline. This will increase to 7 per cent (except for those having Ball & Tube mill the use of biomass remain 5 per cent) with effect from two years after the date of issue of this order and thereafter.

(ii) Minimum contract period for procurement of biomass pellets by generating utilities shall be for seven years so as to avoid delay in awarding contracts by generating companies every year and also to build up long-term supply chain.

(iii) Provisions related to tariff determination and scheduling:

(a) For projects set up under Section 62 of the Electricity Act 2003, the increase in cost due to co-firing of biomass pellets shall be pass through in Energy Charge Rate (ECR).

(b) For projects set up under Section 63 of the Electricity Act 2003, the increase in ECR due to biomass co-firing can be claimed under Change in Law provisions.

(c) Such additional impact on ECR shall not be considered in deciding Merit Order Despatch (MOD) of the power plant.

(d) Obligated Entities such as Discoms can meet their Renewable Purchase Obligations (RPO) by buying such generation of co-firing.

Combatting stubble burning

In fact, the Power Ministry has already set-up the National Mission on use of Biomass in coal based thermal power plants, to address the issue of air pollution due to farm stubble burning and to reduce carbon footprints of thermal power generation. The Mission is taking steps to encourage and support the biomass co-firing in the thermal power plants.

According to the government, as a result of these efforts, around 1,400 tonne of biomass has been fired in October and 53,000 tonne of biomass was utilised as green fuel in power plants so far. The Ministry’s National Mission is expected to curtail air pollution in North West India as well as prevent loss of fertility of agriculture land and provide a sustainable income source for farmers, suppliers and biomass fuel manufacturers.

The current availability of biomass in India is estimated at 750 million tonne annually. The estimated surplus biomass availability is at about 230 million tonne annually covering agricultural residues.

Despite these efforts concerns remain as electricity is de-licensed and the Union Power Ministry without backing of any Act may not have the necessary wherewhithal to enforce mandatory use of biomass. According to industry observers, only the Central Pollution Control Board or the Bureau of Energy Efficiency have power/supporting acts which could enable them to put a mandatory condition.

The buzz is that the Power Ministry is planning to a mandatory condition in Energy Conservation Act amendment. Also the Ministry will need to issue a model agreement for procurement of biomass and create a procurement portal. Till all the issues are resolved, the fear is that this effort also may end up being just another initiative of the government.