Biomass-based power producers seek tariff revision

Biomass-based power producers, with an installed capacity of 2,664 Mw, have made a strong pitch for according priority sector status on the lines of agro sector. These producers have also appealed to the Centre to launch biomass mission on the lines of solar mission to attract more investments.

They have also brought to the notice of the Centre that a large number of biomass-based power projects were lying idle or running below capacity due to low tariff, which ranges between Rs 2.80 per unit in Kerala and Rs 5.53 per unit in Jharkhand. Bio-mass tariff in Maharashtra was recently revised by the state power regulator at Rs 5.41 per unit, while it is Rs 5.36 per unit in Harayana, Rs 5.35 per unit in Punjab and Rs 3.91 per unit in Madhya Pradesh.

D Radhkrishna, secretary general of Bio-Mass Power Association, told Business Standard that producers had to procure bio-mass at a higher cost of Rs 3,500 per tonne against the cost of Rs 2,275 to Rs 2,695 per tonne fixed by the Central Electricity Regulatory Commission in the bio mass tariff regulations. This cost is key ingredient for tariff fixation.

Mamta Dalmiya, managing director, Parijat NextGen Energy, emphasised the need for an out-of-box solution like giving incentive for having dedicated energy plantation, setting up briquetting machines, bio-mass plants aiding farmers to increase the yield of agricultural output thus getting extra agri-waste, setting up contracts for assured bio-mass supply. She said, “Seasonal variation to the bio-mass power price can be considered. Most of the bio-mass plants tend to close down during the monsoons. They could increase the power prices by 50 paise to 75 paise per unit for generating power during monsoons when the cost of producing power during this period is the highest. During this period the output of other renewable energy like solar and wind are challenged. Bio-mass can still continue with the predictable performance if correct incentive is provided for generation during these lean months.&”

“There is an immediate need for a clear policy and guidelines for fixing the variable cost of fuel released by Central Electricity Regulatory Commission (CERC), based on the annual independent survey conducted by either the CERC or by the Ministry of New and Renewable Energy (MNRE),&” said M Komaraiah, chairman and managing director of Shalivahana Green Energy, which has operational biomass projects of 70 Mw in various states.

Komaraiah, while giving the example of Madhya Pradesh, said the basic assumption of biomass price of Rs 1.507 per tonne for 2012-13 was far from the reality. Also, it was not clear whether these prices include components of the moisture and other storage losses


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