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“Converting waste agricultural biomass into energy” Resource Conservation and GHG
Emission Reduction
Outputs VIII of the SSFA Policy Recommendations for India Page 1
“Converting waste agricultural biomass into energy”
Resource Conservation and GHG Emission Reduction
Outputs VIII of the SSFA
Report on Policy Recommendations for Enhancing
Conversion of Waste Agricultural Biomass into
Energy for India
“Converting waste agricultural biomass into energy” Resource Conservation and GHG
Emission Reduction
CONTENTS
Chapter Sub Chapter
Title Page
Summary 51 Energy from waste agricultural biomass 6
1.1 Introduction 61.2 Energy from Waste Agricultural Biomass 6
2. Assessment of Waste Agricultural Biomass in India 82.1 Energy potential of waste agricultural biomass 82.2 Generation of Waste Agricultural Biomass in India 102.3 Generation of waste agricultural biomass from various crops
in India 10
2.4 Surplus waste agricultural biomass in India 112.5 State-wise Estimation of Surplus Waste Agricultural
Biomass 13
2.6 Other references 163 Government Policy 17
3.1 The national scenario -- Biomass related Policies and Programmes 17
3.1.1 Institutional framework – Ministry of New and Renewable Energy 18
3.2 Analysis of climate change related policies 193.2.1 National Action Plan on Climate Change (NAPCC) 193.2.1.1 Market based mechanism 193.2.1.2 Accelerated shift to energy efficient appliances 203.2.1.3 Mechanism to finance Demand Side Management (DSM) 203.2.1.4 Fiscal instruments to promote energy efficiency 203.2.2 Goals of National Action Plan on Climate Change 213.3 Analysis of renewable energy related policy development 213.3.1 Early Policy Perspective 213.3.2 Multi-pronged approach 223.3.3 Shift in Policy Perspective 233.3.4 Major programmes of MNES 243.3.4.1 National Biomass Cookstoves Programme 243.3.4.2 Programmes for Biomass based Electric Power 243.3.4.3 National biomass gasifier programme 253.3.4.4 Programmes for building research institutions 263.3.4.5 Programmes for Biomass based Energy in rural areas 273.3.4.6 Policies by state governments 273.3.4.7 Incentives for investing in Renewable Energy Technologies 283.4 Analysis of Foreign Investment Policy 303.5 Gaps/inadequacies in current policy framework 313.5.1 Uncertain economic viability of biomass to energy projects 313.5.2 Irrational incentive schemes for biomass to energy projects 323.5.3 Preference to large size biomass to energy projects 323.5.4 Application of same environmental and land use related 32
Outputs VIII of the SSFA Policy Recommendations for India Page 2
“Converting waste agricultural biomass into energy” Resource Conservation and GHG
Emission Reduction
regulations3.5.5 Lack of emphasis on technology research and development 333.5.6 Location of biomass to energy plants 333.6 Policy drivers to promote enhanced conversion of waste
agricultural biomass into energy 33
3.7 Challenges for enhancing conversion of waste agricultural biomass into energy 34
4 Proposed National Strategy for enhancing conversion of waste agricultural biomass into energy 37
4.1 Vision 374.2 Objectives 374.3 Targets 384.3.1 Scope and Timing 384.4 Relation to other strategies 384.5 Specific elements of the strategy 384.5.1 Comprehensive data base on availability of waste
agricultural biomass 38
4.5.2 Enable sustainable and affordable supply of waste agricultural biomass to points of application 39
4.5.3 Technology modernisation 394.5.4 Price regulation of waste agricultural biomass 404.5.5 Fiscal Incentives 414.5.6 Financial subsidies 414.5.7 Awareness raising 424.5.8 Capacity building 424.6 Implementation and delivery mechanism 44
5 Conclusion 47
List of Tables
Table-2.1-a Derived Calorific Values (wet basis: natural form) of various WABs 8
Table-2.1-b Calorific value (Dry basis) of different WABs 9Table 2.5-a State-wise Biomass Data Based on Survey Data of Agro-Kharif 14Table 2.5-b State-wise Biomass Data: Agro-Rabi 15
List of Graphs
Graph-2.3 Contribution of various crops in generation of waste agricultural biomass 11
Graph-2.4 -a State wise generation of surplus waste agricultural biomass in India 12
Graph-2.4 -b Surplus waste agricultural biomass after conventional use 13Graph-2.6 Waste agricultural biomass generated, surplus and burnt in field 16
Outputs VIII of the SSFA Policy Recommendations for India Page 3
“Converting waste agricultural biomass into energy” Resource Conservation and GHG
Emission Reduction
Outputs VIII of the SSFA Policy Recommendations for India Page 4
“Converting waste agricultural biomass into energy” Resource Conservation and GHG
Emission Reduction
List of Annexures
Annexure-1 Status of biomass power cogeneration tariff across states 48Annexure -2 List of biomass power projects commissioned 50Annexure -3 CFA for Biomass Power Project and Bagasse Cogeneration
Projects by Private/Joint/Coop./Public Sector Sugar Mills 51
Annexure-4 Special exemptions 53
Outputs VIII of the SSFA Policy Recommendations for India Page 5
“Converting waste agricultural biomass into energy” Resource Conservation and GHG
Emission Reduction
Summary
There is large biomass use in India. The use of biomass as a source of energy is confined
primarily to traditional uses such as cooking in rural households and heating in rural
industries. Most biomass is not traded on the market, but is gathered or home grown for
use by family. The key policy issue is to develop market for biomass energy service. A
primary response is to modernize the biomass use. Lately, there has been a growing
experience of modern biomass technologies in India. Currently, the penetration of modern
biomass energy services is insignificant.. Due to high cost and low service reliability, the
biomass energy is not yet competitive to cause significant demand (market) pull. Biomass is
however competitive in niche applications such as in remote biomass rich locations and agro
and wood processing industries generating cheaply available biomass waste. Increased
penetration of technologies to convert waste agricultural biomass into energy, through
government programmes acting a ‘push factor’ is urgently required
The government policies in India during the next decade shall play a key role in enhancing
the conversion of waste agricultural into energy in future.
The challenge before the Indian policy makers is to develop the market for biomass energy
services by ensuring reliable and enhanced biomass supply, removing the tariff distortions
favouring fossil fuels and producing energy services reliably with modern biomass to energy
conversion technologies at competitive cost.
Outputs VIII of the SSFA Policy Recommendations for India Page 6
“Converting waste agricultural biomass into energy” Resource Conservation and GHG
Emission Reduction
1 Energy from waste agricultural biomass
1.1 Introduction
A rural energy crisis started getting faced during the mid-1970s decade. Increased oil price,
increased household energy demand due to high population growth, and depletion of
local wood resources due to unsustainable use were found to be the three most important
reasons and causes for this situation.
The national policy makers needed to find economically viable and sustainable energy
resource to meet rural energy needs. Although, import of kerosene and LPG for cooking and
diesel for irrigation pumping remained a possible short-term supply-side solution, this was
not viable in the long run due macro as well as micro economic constraints. While at
macro-economic level the high proportion of Petroleum, Oil and Lubricants (POL) in
the total imports of India was a matter of concern to the policy makers, a t micro
economy level, a majority of the poorer section of rural households was facing the
problem of very low disposable income to spend on commercial fuels. With a view to meet
these challenges of rural energy crisis, the programmes for renewable energy technologies
(RETs) were developed in the 1970s. Biomass, being a local, widely accessible and
renewable resource, was potentially the most suitable to alleviate both macro and micro
concerns.
1.2 Energy from Waste Agricultural Biomass
Biomass is highly diverse in nature and classified on the basis of site of origin such as field
and plantation biomass, industrial biomass, forest biomass, urban waste biomass and aquatic
biomass. However, most common source of biomass is wood waste and agricultural wastes.
In this report, we have focused mainly on waste agricultural biomass (WAB) because India
has a large agriculture base, generates huge quantities of waste agriculture biomass and most
of which is currently unutilized.
Biomass has been used as a fuel since millennia. Until the mid-19th century, biomass
dominated the global energy consumption. With rapid increase in fossil fuel use, share of
biomass in total energy has declined steadily over a century, mainly due to the development
Outputs VIII of the SSFA Policy Recommendations for India Page 7
“Converting waste agricultural biomass into energy” Resource Conservation and GHG
Emission Reduction
of the petroleum sector and more convenient forms of energy like the LPG and kerosene. This shift
was further accelerated by the special concessions and subsidies accorded to these two forms of fuel,
especially for the poorer population, who were otherwise using the biomass as their primary source
of fuel.
Predominant use of biomass still continues to be in the rural household and traditional
artisan type craft and industry sectors. In this segment, biomass continues to retain the
tag of "poor man's fuel". On the supply side, since most biomass fuels are home grown or
gathered by the households for own needs, the market for the biomass fuels does not exist.
Under such circumstances organized technological interventions to convert waste agricultural
biomass to energy is minimal.
Environmental concerns like global climate change, acid rain and the deterioration in local air
quality from the use of fossil fuels have revived the interest in biomass energy as a
renewable, sustainable and environmentally friendly energy source. The rural energy crisis
due to the low purchasing power of rural poor and the shortages of commercial fossil
fuels demand development of the biomass energy sector. Developing country policy makers
have also begun to perceive other economic benefits of commercial use of biomass, like
enhanced access to energy for rural areas, rural employment and saving of foreign
exchange for oil imports.
Outputs VIII of the SSFA Policy Recommendations for India Page 8
“Converting waste agricultural biomass into energy” Resource Conservation and GHG
Emission Reduction
2. Assessment of Waste Agricultural Biomass in India
2.1 Energy potential of waste agricultural biomass
Different types of waste agricultural biomass have different calorific values. The Calorific
Value of different WABs ranges between 1,500 KCals/Kg. to 4,200 KCals/Kg. on an as is
basis. The derived values of the calorific values of individual WAB have been worked out as
shown in Table 2.1-a.
Table-2.1-a: Derived Calorific Values (wet basis: natural form) of various WABs
WAB Calorific Value (Wet basis) KCals/Kg.
Sugarcane Bagasse 1494
Sugarcane Top & trash 1586
Paddy Husk 2988
Paddy Straw (top) 2053
Oil palm Empty bunches 3811
Oil palm Fiber 3755
Oil palm Shell 3939
Oil palm Frond 1853
Coconut Husk 3463
Coconut Shell 3824
Coconut Empty bunches 3189
Coconut Frond 3368
Cassava Stalk 3971
Maize Corn cob 3867
Groundnut Shell 2791
Cotton Stalk 3072
Soybean Stalk, leaves, shell 4205
Sorghum Leaves & stem 4111
Over all average 2003
Outputs VIII of the SSFA Policy Recommendations for India Page 9
“Converting waste agricultural biomass into energy” Resource Conservation and GHG
Emission Reduction
From the table it is also clear that bagasse, which has a high moisture content, of the order of
about 50%, stands at the lowest level with some of the pulses stalks standing at the highest
level. Another study1 reported the Calorific Values ranging between 3000 to 4700 KCals/Kg.
on a dry basis. Table 2.1-b provides the figures for various WAB as reported in the study.
Table-2.1-b: Calorific value (Dry basis) of different WABs
Biomass Agricultural residues Calorific Value (Dry basis) KCals/Kg.
Paddy straw 3000
Rice husk 3040
Mango leaves 3390
Groundnut 4200
Sugarcane 3800
Wheat straw 3800
Cotton stalks 4700
Maize stalks 3500
Maize cobs 3850
Bajra stalks 3950
Gram straw 3810
Masoor straw 3980
Considering the fact that generally biomass is available on as is where is basis, in it’s natural
wet form, and also keeping in view the geo-climatic conditions in India, an overall thermal
value at 2,500 KCals/Kg. can be considered for estimating the energy potential.
Again, considering that the average calorific value of petroleum products as 10,000
KCals/Kg, it is considered that every 4 units of WAB can replace one unit of petroleum
product.
1 http://www.ces.iisc.ernet.in/energy/paper/alternative/calorific.html
Outputs VIII of the SSFA Policy Recommendations for India Page 10
“Converting waste agricultural biomass into energy” Resource Conservation and GHG
Emission Reduction
2.2 Generation of Waste Agricultural Biomass in India
Ministry of New and Renewable Energy (MNRE 2009), Government of India estimated that
about 500 Million tons of waste agricultural biomass is generated every year2. There is a large
variability in generation of waste agricultural biomass depending on the cropping intensity,
productivity and crops grown in different states of India. The generation of waste agricultural
biomass is highest in Uttar Pradesh (60 Million tons) followed by Punjab (51 Million tons)
and Maharashtra (46 Million tons)3.
2.3 Generation of waste agricultural biomass from various crops in India
Graph 2.3 depicts the generation of waste agricultural biomass from various crops. According
to MNRE Report 20094, among different crops, cereals generate 352 million tons waste
biomass followed by fibres (66 million tons), oilseed (29 million tons), pulses (13 million
tons) and sugarcane (12 million tons)5. The cereal crops (rice, wheat, maize, millets)
contribute 70% while rice crop alone contributes 34% of waste biomass. Wheat ranks second
with 22% whereas fibre crops contribute 13% of waste biomass generated from all crops.
Among fibres, cotton generates maximum (53 million tons) with 11% of waste biomass.
Coconut ranks second among fibre crops with 12 million tons of waste biomass generation.
Sugarcane crop generates 12 million tons of waste biomass comprising of tops and leaves, 2%
of crop residues in India6.
2 Biofuels Annual New Delhi Report, GAIN Publications 2011http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Biofuels%20Annual_New%20Delhi_India_7-1-2011.pdf3 Crop Residue management report by IARI 2012http://www.iari.res.in/files/Important_Publications-2012-13.pdf4 MNRE Report 2009:http://mnre.gov.in/file-manager/UserFiles/MNRE_REC_Report.pdf5 Crop Residue Management with conservation agriculture IARI 2012:http://www.iari.res.in/files/Important_Publications-2012-13.pdf6 Final CRM document:www.nicra.iari.res.in/Data/FinalCRM.doc
Outputs VIII of the SSFA Policy Recommendations for India Page 11
“Converting waste agricultural biomass into energy” Resource Conservation and GHG
Emission Reduction
Graph-2.3: Contribution of various crops in generation of waste agricultural biomass
Apart from wheat and rice, crops like maize, soyabean, tapioca, bajra, groundnut, jowar,
arhar, castor seed, gram and til contribute the major shares of waste biomass in that order.
While there are many other crops which generate agricultural residues, their share is
negligible. These residues, as and when and wherever available, will have to be used in
combination with the major residues in the area.
The generation of waste biomass from cereal crops is highest in Uttar Pradesh (53 Million
tons) followed by Punjab (44 Million tons) and West Bengal (33 Million tons). Maharashtra
contributes maximum to the waste biomass generation from pulses (3 Million tons) while
fibre crop is dominant in Andhra Pradesh (14 Million tons)7. Gujarat and Rajasthan generate
about 6 Million tons each of waste biomass from oilseed crops.
2.4 Surplus waste agricultural biomass in India:
The amount of waste agricultural biomass, which does not have any identifiable end use; is
either left in the fields to rot or is burnt away, is termed as Surplus Biomass. Sometimes a
small part of such residues are used to meet household energy needs by farmers. The
estimated total surplus waste agricultural biomass in India ranges from 84 to141 million
tons/year where cereals and fibre crops contribute 58% and 23%, respectively8. Remaining
7 Crop Residue Management with conservation agriculture IARI 2012www.iari.res.in/files/Important_Publications-2012-13.pdf8 Management of Crop Residue NAAS(National Academy of Agricultural Sciences, India)http://naasindia.org/Policy%20Papers/policy%2058.pdf
Outputs VIII of the SSFA Policy Recommendations for India Page 12
“Converting waste agricultural biomass into energy” Resource Conservation and GHG
Emission Reduction
19% is from sugarcane, pulses, oilseeds and other crops. Out of 82 million tons surplus
biomass from the cereal crops, 44 million tons is from rice followed by 24.5 million tons of
wheat which is mostly burnt in fields. In case of fiber crops (33 million tons of surplus
biomass) approximately 80% is waste biomass from cotton crop. This is mostly burnt in open
in the field9. Graph 2.4–a depicts the state wise status of cumulative surplus waste
agricultural biomass. Graph 2.4 -b depicts the surplus after conventional uses.
Uttar Prad
esh
Mahara
shtra
Madhya
Pradesh
Andhra Prad
esh
Karnata
kaOris
sa
Punjab
West Ben
gal
Gujarat
Bihar
Chhattisga
rh
Rajasth
an
Haryan
a
Tamil N
adu
Assam
Kerala
Himach
al Prad
esh
Uttaranch
al
Jharkhan
d
Jammu & Kash
mir
Manipur
Nagalan
dGoa
Meghala
ya
Arunachal P
radesh
Sikkim
Mizoram
0
5000
10000
15000
20000
25000
30000
Biomass Generation (kT/Yr)
Biomass Generation (kT/Yr)
States
Kilo
Ton
s/Yr
Graph-2.4 -a: State wise generation of surplus waste agricultural biomass in India
From the above graph, it may be seen that the states of Uttar Pradesh tops the list followed by
Maharashtra, Madhya Pradesh, Andhra Pradesh, Karnataka, Odisha and Punjab, accounting
for almost 60% of the total nationaal generation of biomass. All rest of the 20 states account
for the rest 40%.
A very small part of surplus residues are used for various purposes such as to meet household
energy needs by farmers, thatching roofs, animal fodder etc.
9 Crop Residue management report by IARI 2012http://www.iari.res.in/files/Important_Publications-2012-13.pdf
Outputs VIII of the SSFA Policy Recommendations for India Page 13
“Converting waste agricultural biomass into energy” Resource Conservation and GHG
Emission Reduction
Punjab
Uttar Prad
esh
Mahara
shtra
Madhya
Prad
esh
Haryan
a
Karnata
ka
Andhra Prad
esh
Orissa
Bihar
Gujarat
Chhattisg
arhKera
la
Tamil N
adu
West B
enga
l
Rajasth
an
Himach
al Prad
esh
Assam
Uttaranch
al
Jharkhand
Jamm
u & K
ashmir
Manip
ur
Nagalan
d
Meghala
ya
Arunachal P
radesh Goa
Sikkim
Mizoram
0
2000
4000
6000
8000
10000
12000
14000
Biomass Surplus (kT/Yr)
Biomass Surplus (kT/Yr)
States
Kilo
Ton
s/Yr
Graph-2.4 -b: Surplus waste agricultural biomass after conventional use
From the above graph, it may be seen that the states of Punjab tops the list followed by Uttar
Pradesh, Maharashtra, Madhya Pradesh, Haryana, Karnataka, Andhra Pradesh, Orissa and
Bihar, accounting for almost 80% of the total national generation of biomass. All rest of the
18 states account for the rest 20%.
2.5 State-wise Estimation of Surplus Waste Agricultural Biomass:
Due to limitations of data availability, the year 2004 has been used as a base for estimating
the availability of surplus waste agricultural biomass. Table 2.5-a (Kharif crop season) and
2.5-b (Rabi crop season) depict the details of state-wise area under agricultural cropping, total
crop production, biomass generation, estimated surplus biomass available for alternate uses
and the estimated potential of power generation opportunity. The data is presented under the
two different major cropping patterns adopted in India, viz: the Kharif and the Rabi crops.
The data has been organized in the order of the availability of surplus biomass and the
corresponding power generation potential.
It may be observed that the states of Punjab and Uttar Pradesh occupy their positions in the
top four highest biomass producing states.
Outputs VIII of the SSFA Policy Recommendations for India Page 14
“Converting waste agricultural biomass into energy” Resource Conservation and GHG
Emission Reduction
Table 2.5-a: State-wise Biomass Data Based on Survey Data of year [2002-04] for season:
Agro-Kharif10
State Area(kha) Crop Production (kT/Yr)
Biomass Generation (kT/Yr)
Biomass Surplus (kT/Yr)
Million Tons Oil eqv.
Power Potential (Mwe)
Punjab 2723.0 9357.1 16187.1 12298.7 3.07 1464.3Uttar Pradesh 7605.1 13646.4 24895.1 7614.3 1.90 914.7Maharashtra 10485.3 13232.5 24512.9 5721.2 1.43 731.3Madhya Pradesh 8891.4 10424.8 20195.1 4574.7 1.14 583.6Haryana 1778.9 3412.6 6438.8 4120.6 1.03 494.0Karnataka 5770.4 10080.5 18608.0 3702.3 0.93 466.4Andhra Pradesh 6285.7 10439.5 19244.4 3336.4 0.83 399.5Gujarat 5274.4 6076.6 14158.7 2927.9 0.73 372.0Orissa 5029.3 10026.9 17118.6 3147.2 0.79 364.2Bihar 3826.5 6776.7 12126.5 2980.7 0.75 352.0Chhattisgarh 4082.7 6113.6 10453.4 1940.1 0.49 224.6Kerala 530.5 3399.3 3388.1 1538.8 0.38 195.9Tamil Nadu 1313.1 2997.9 4116.2 1500.8 0.38 193.5West Bengal 2377.6 8316.3 14273.2 1436.0 0.36 172.1Rajasthan 6081.3 3352.4 7718.9 1310.1 0.33 168.5Himachal Pradesh 384.8 814.9 1792.6 818.1 0.20 104.1Assam 1100.9 2628.4 3875.0 685.7 0.17 81.8Uttaranchal 468.3 783.5 1250.1 351.4 0.09 42.0Jharkhand 472.1 919.5 1138.1 227.5 0.06 28.6Jammu & Kashmir 507.0 403.9 925.4 146.4 0.04 19.6Manipur 339.1 434.4 905.4 111.3 0.03 13.9Nagaland 178.6 275.6 488.9 83.0 0.02 9.7Meghalaya 144.6 235.8 345.0 55.8 0.01 6.5Arunachal Pradesh 179.5 212.4 331.8 49.3 0.01 5.9Goa 70.6 232.4 400.4 48.9 0.01 5.6Sikkim 43.3 59.0 130.7 14.1 0.00 1.82Mizoram 13.9 22.6 51.6 5.3 0.00 0.69Total 75957.9 124675.4 225070.0 60746.6 15.19 7416.8
10 http://lab.cgpl.iisc.ernet.in/atlas/Tables/Tables.aspx
Outputs VIII of the SSFA Policy Recommendations for India Page 15
“Converting waste agricultural biomass into energy” Resource Conservation and GHG
Emission Reduction
Table 2.5-b: State-wise Biomass Data Based on Survey Data of year [2002-04] for season:
Agro-Rabi
State Area (kha)
Crop Production
(kT/Yr)
Biomass Generation
(kT/Yr)
Biomass Surplus (kT/Yr)
Million Tons Oil eqv.
Power Potential
(Mwe)
Punjab 3526.6 15715.1 28304.6 7123.6 1.78 948.9Rajasthan 8244.1 11538.6 19843.4 7098.5 1.77 925.0Uttar Pradesh 6454.3 16772.3 30017.3 5054.3 1.26 681.5Haryana 3229.0 10762.2 19899.2 4821.5 1.21 626.8Maharashtra 4595.5 3390.4 7374.3 2141.1 0.54 282.9West Bengal 3386.8 12085.1 20469.2 2140.9 0.54 257.8Madhya Pradesh 3767.8 5206.2 8887.0 1957.8 0.49 258.1
Bihar 3393.9 6612.1 12374.3 1930.9 0.48 258.1Andhra Pradesh 2230.9 5970.5 10771.7 1910.6 0.48 225.5
Tamil Nadu 2128.9 4880.4 7258.5 1899.3 0.47 234.8Karnataka 2348.6 2745.9 6209.0 1262.2 0.32 165.5Assam 2037.5 3909.7 6735.8 1251.6 0.31 144.9Jharkhand 1375.7 1472.4 2503.5 662.2 0.17 78.0Gujarat 1067.1 1780.1 3207.7 649.5 0.16 85.7Orissa 1560.4 1526.0 2593.8 444.8 0.11 53.2Uttaranchal 447.0 749.9 1340.6 224.5 0.06 30.2Himachal Pradesh 400.3 620.6 1100.8 215.9 0.05 28.4
Chhattisgarh 669.2 508.7 818.7 187.7 0.05 23.9Jammu & Kashmir 242.5 369.9 665.9 133.2 0.03 17.5Arunachal Pradesh 24.9 24.5 54.1 14.2 0.00 1.75
Meghalaya 11.9 12.0 23.6 4.86 0.00 0.62
Sikkim 14.7 10.1 18.8 3.68 0.00 0.48Mizoram 2.42 1.79 3.80 0.97 0.00 0.12Nagaland 0.39 0.45 0.76 0.14 0.00 0.016Total 51160.3 106664.7 190476.3 41133.9 10.28 5329.9
Outputs VIII of the SSFA Policy Recommendations for India Page 16
“Converting waste agricultural biomass into energy” Resource Conservation and GHG
Emission Reduction
The potential of using WAB is equivalent of about 25.47 million tons oil equivalent (15.19
for Kharif and 10.28 for Rabi) in India. Considering the fact that the annual oil consumption
in India is of the order of about 168 Million Tonnes, the WAB offers a scope to reduce the oil
requirement by about 15%.
2.6 Other references
Many other references are available regarding the surplus residues and burnt residues. Graph
2.6 depicts two such references, where the surplus WAB have been estimated to be of the
order of 83.65 million tons and 92.84 million tons per year respectively. The different figures
quoted by the two sources vary by about 11%, which can be attributed to the sample size,
geographic zones, climatic conditions and time of sampling used for the purpose of these
studies. However, keeping in view the huge quantity of surplus WAB, this difference is rather
small and of little or no major consequence. A safe figure of about 85 million tons can be
assumed as surplus WAB.
Residue generation Mt/yr Residue surplus Mt/yr Residue burned Mt/yr (IPCC)
Residue burned (Pathak et al. 2010)
0
100
200
300
400
500
600Agricultural residue generation, surplus and burned in field
Million Tons/Year Agricultural residue
Mill
ion
Tons
/Yr
Graph-2.6: Waste agricultural biomass generated, surplus and burnt in field (IPCC Coeff.,
Pathak et.al)
Outputs VIII of the SSFA Policy Recommendations for India Page 17
“Converting waste agricultural biomass into energy” Resource Conservation and GHG
Emission Reduction
3 Government Policy11
3.1 The national scenario -- Biomass related Policies and Programmes
A rural energy crisis started getting faced during the mid-1970s decade. Increased oil price,
increased household energy demand due to high population growth, and depletion of
local wood resources due to unsustainable use were found to be the three most important
reasons and causes for this situation.
The national policy makers needed to find economically viable and sustainable energy
resource to meet rural energy needs. Although, import of kerosene and LPG for cooking and
diesel for irrigation pumping remained a possible short-term supply-side solution, this was
not viable in the long run due macro as well as micro economic constraints. While at
macro-economic level the high proportion of POL (Fuel Oil and Lubricants) in the total
imports of India was a matter of concern to the policy makers, a t micro economy level, a
majority of the poorer section of rural households was facing the problem of very low
disposable income to spend on commercial fuels. With a view to meet these challenges of
rural energy crisis, the programmes for renewable energy technologies (RETs) were
developed in the 1970s. Biomass, being a local, widely accessible and renewable resource,
was potentially the most suitable to alleviate both macro and micro concerns.
Despite rapid growth of commercial energy, biomass remains principle energy source in
rural and traditional sectors and is estimated to contribute a third of India's energy12. The
national biomass policy of India has few decades of history, emanating with the rural energy
policies. The GOI strategy was multi dimensional and was focused on improving efficiency
of conventional technologies, enhancing supply chain of biomass, stressing on introduction
11 http://web.grinnell.edu/courses/ant/S00/ANT154-01/magar/policy.html12 Biomass energy: Key Issues and Priority Needs : P.R. Shukla: IIM-A: Paper presented at
the workshop on Biomass Energy: Key Issues and Priority Needs Organized by International
Energy Agency (IEA): Paris, February 3-5,
Outputs VIII of the SSFA Policy Recommendations for India Page 18
“Converting waste agricultural biomass into energy” Resource Conservation and GHG
Emission Reduction
of modern biomass technologies to provide reliable energy at competitive prices and
establishing institutional support.
Despite some successes, the overall impact of biomass programmes on the Indian energy
scene has been only marginal. The trend of the rural masses has shifted to use of more
convenient modes of cooking fuel like the LPG etc. The free markets are not involved in
this form of energy supply as well as conversion. Most of the successful technology
implementations have been seen in the government supported projects only, or in those
cases where there was considerable financial support from various national and
international sources.
3.1.1 Institutional framework – Ministry of New and Renewable Energy
The Government of India, seeing the limited results of the biomass energy related
programmes and realising imminent need of new and renewable energy resources that would
ensure sustainable development and energy security identified use of various renewable
energy resources and efficient use of energy as the two thrust areas of the sustainable
development. In order to make concentrated efforts in this sector, the Government of India
established a Commission for Additional Sources of Energy (CASE) in the Department of
Science and Technology, in 1981. The mandate of CASE was to promote research and
development activities in the field of renewable energy. CASE was formally incorporated in
1982, in the newly created Department of Non -conventional Energy Sources (DNES). In
1992 DNES became the Ministry for Non-conventional Energy Sources, commonly known as
MNES, and now the Ministry of New and Renewable Energy (MNRE). It has been accorded
more importance for working on higher levels of renewable energy technology programmes.
The changed emphasis was aimed at promoting modernization and commercialization of
biomass production, combustion, densification, and electricity generation.
The Ministry continues to support the implementation of a large broad –spectrum programme
covering the entire range of new and renewable energies. The Ministry has Regional Offices,
three specialised research Institutions and a non -banking financial company –Indian
Renewable Energy Development Agency (IREDA) -under its administrative control to
promote its policy and programme initiatives.
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3.2 Analysis of climate change related policies
3.2.1 National Action Plan on Climate Change (NAPCC)
On June 30, 2008, Prime Minister released India’s first National Action Plan on Climate
Change (NAPCC) outlining existing and future policies and programs addressing climate
mitigation and adaptation. The plan identifies eight core “national missions” running through
2017 and directs ministries to submit detailed implementation plans to the Prime Minister’s
Council on Climate Change by December 2008.
Emphasizing the overriding priority of maintaining high economic growth rates to raise living
standards, the plan identified measures that would promote India’s development objectives
while also yielding co-benefits for addressing climate change effectively. These national
measures were planned to be more successful with assistance from developed countries, and
India’s pledge that per capita greenhouse gas emissions, will at no point, exceed that of
developed countries even as we pursue our development objectives.
The eight national missions were;
1. National Solar Mission:
2. National Mission for Enhanced Energy Efficiency:
3. National Mission on Sustainable Habitat:
4. National Water Mission:
5. National Mission for Sustaining the Himalayan Ecosystem:
6. National Mission for a “Green India”:
7. National Mission for Sustainable Agriculture: and
8. National Mission on Strategic Knowledge for Climate Change:
Para 4.2 of the National Action Plan on Climate Change mandates four new initiatives, viz:
3.2.1.1 Market based mechanism
A market based mechanism to enhance cost effectiveness of improvements in energy
efficiency in energy-intensive large industries and facilities, through certification of energy
savings that could be traded. (Perform Achieve and Trade)
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3.2.1.2 Accelerated shift to energy efficient appliances
Accelerating the shift to energy efficient appliances in designated sectors through innovative
measures to make the products more affordable. (Market Transformation for Energy
Efficiency)
3.2.1.3 Mechanism to finance Demand Side Management (DSM)
Creation of mechanisms that would help finance demand side management programmes in all
sectors by capturing future energy savings. (Energy Efficiency Financing Platform), and
3.2.1.4 Fiscal instruments to promote energy efficiency
Developing fiscal instruments to promote energy efficiency (Framework for Energy Efficient
Economic Development)
In addition, The NAPCC also describes other ongoing initiatives, including:
Power generation: The government is mandating the retirement of inefficient coal-
fired power plants and supporting the research and development of IGCC and
supercritical technologies.
Renewable energy: Under the Electricity Act 2003 and the National Tariff Policy
2006, the central and the state electricity regulatory commissions must purchase a
certain percentage of grid-based power from renewable sources.
Energy efficiency: Under the Energy Conservation Act 2001, large energy-consuming
industries are required to undertake energy audits and an energy labeling program for
appliances has been introduced.
Implementation: Ministries with lead responsibility for each of the missions are
directed to develop objectives, implementation strategies, timelines, and monitoring
and evaluation criteria, to be submitted to the Prime Minister’s Council on Climate
Change. The Council will also be responsible for periodically reviewing and reporting
on each mission’s progress. To be able to quantify progress, appropriate indicators
and methodologies will be developed to assess both avoided emissions and adaptation
benefits.
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3.2.2 Goals of National Action Plan on Climate Change
Some of the important goals of NAPCC are:
- Market-based approaches to unlock energy efficiency opportunities, estimated to be
about Rs. 740 billion (US$ 12 billion) By 2014-15:
- Annual fuel savings in excess of 23 million toe
- Cumulative avoided electricity capacity addition of 19,000 MW
- CO2emission mitigation of 98 million tons per year
- Specific Energy Consumption (SEC) reduction targets for the 685 energy-intensive
units which are designated consumers under the Energy Conservation Act
3.3 Analysis of renewable energy related policy development
The importance of Government Policy in the rapid adoption and growth of renewable energy
technologies cannot be overemphasized. A comprehensive analysis of the effectiveness of the
policies is rather difficult. While assessing the effectiveness, enough care is needed to be
exercised to take care of and accommodate the multitude factors like technological,
economic, social and institutional barriers. The policies are required to provide for steps to
remove such barriers. The main issues for policy making are to develop the market for
biomass energy services by ensuring reliable and enhanced biomass supply, removing the
tariff distortions favouring fossil fuels and producing energy services reliably with modern
biomass technologies at competitive cost.
3.3.1 Early Policy Perspective:
The DNES’s emphasis was on the decentralized and direct use renewable technologies. The
renewable energy sources were viewed as the primary source of rural and remote area
energy needs. Direct subsidy to the user remained a major element of the renewable energy
programmes. During the early 1990s, it was realized that faster diffusion of renewable
energy sources required greater reliance on commercialization through fiscal rather than
financial incentives involving the private sector - the role of the Ministry of Non-
Conventional Energy Resources (then a Department of the Ministry of Power called the
DNES) had to change from that of an implementing organization to one facilitating the rapid
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commercial application of renewable energy. Since then the thrust of the programmes has
been on market development in order to facilitate and catalyze commercialization resulting in
several-fold increase in the diffusion of renewable energy technologies. India is perhaps, the
only country in the world with an independent ministry for the promotion of RETs.
The subsidies, fiscal support, information, and consultancy services provided by the MNES
have and will likely continue to be the single most important factor in the growth of these
technologies. This is because the MNES has to essentially make these technologies
competitive with conventional technologies by helping overcome the two primary problems
of slightly higher costs and high initial costs. The future of these technologies in India will be
determined on the basis of the success of the MNRE being able to address these two issues,
viz: making the technologies competitive with conventional technologies by helping
overcome the primary problems of slightly higher costs and high initial costs. The World
Bank, IMF, and Asian Development Bank (ADB) have provided a large portion of the
financing for these projects. Since it is most likely that the MNES cannot provide near the
same level of assistance to these projects the continuing help (and hopefully increased help)
of these multilateral lending organizations is also vital to the development of these
technologies.
3.3.2 Multi-pronged approach:
The biomass policies were designed to address the five main areas as:
i) Improving efficiency of the traditional biomass use (e.g. improved cook-stove
programme),
ii) Improving the supply of biomass (e.g. social forestry, wasteland development),
iii) Technologies for improving the quality of biomass use (e.g. biogas, improved
cook-stoves),
iv) Introduction of biomass based technologies (wood gasifiers for irrigation, biomass
electricity generation) to deliver services provided by conventional energy sources,
and
v) Establishing institutional support for programme formulation and implementation.
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Specific programmes were developed to address the above-mentioned five areas. These
programmes are briefly described in section 3.2.4
3.3.3 Shift in Policy Perspective:
It was increasingly realized that the failures of the biomass programmes resulted from the
deficiencies in policy perspective. Firstly, the biomass was viewed solely as a traditional fuel
for meeting the rural energy needs. Secondly, the policies primarily focused on the supply-
side push. Since early 1990s decade, keeping pace with the technological developments
in the biomass use area, there has been a visible policy shift. Under the market oriented
economic reforms policies pursued by the Government of India, the market forces are now
allowed a greater role. The shift in the policy approach is characterized by:
i) Higher emphasis on market instruments compared to regulatory controls,
ii) R eorientation from technology push to market pull, and
iii) Enhanced role of private sector.
The new policies signify a shift in policy perspective towards biomass. The old perspective
viewed biomass as a non-commercial rural resource (poor man's fuel) which has to be pushed
by the government programmes. The new perspective considers biomass as a clean
competitive energy resource which will be pulled commercially by energy users if the
government policies help to internalize its multiple social benefits and the social costs of
conventional fuels. The new policy perspective has resulted in enhanced support to the sugar
cane bagasse based co-generation, improved biomass combustion technologies, biomass
densification, charcoal making and decentralized electricity generation.
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3.3.4 Major programmes of MNES
A brief description of some of the major programmes of MNES addressing the five main areas is given below.
3.3.4.1 National Biomass Cookstoves Programme13
A National Biomass Cook-stoves Initiative (NBCI) was launched by MNRE on 2nd December
2009 at New Delhi with the primary aim to enhance the use of biomass cook-stoves. The
initiative stressed the setting up of state-of-the-art testing, certification and monitoring
facilities and strengthening R&D programmes. The aim was to design and develop the most
efficient, cost effective, durable and easy to use device.
The NBCI of MNRE is structured differently from the earlier National Programme on
Improved Chulhas (NPIC), although building on the several successes of that programme as
also drawing lessons from the experience gained from its implementation. Under this
initiative, a series of pilot scale projects are envisaged using several existing commercially –
available and better cook-stoves and different grades of biomass fuel.
3.3.4.2 Programmes for Biomass based Electric Power:
The organized thrust on biomass based electric power in India has been in place ever since
the 1990s. The thrust on bagasse based co- generation resulted in many sugar producing
plants adopt the cogeneration route, thereby helping the country in bridging a part of the gap
in energy supply and demand.
Most of these projects were supported through the surplus Power Purchase Agreements
(PPAs), which was the much needed support for getting economic tariffs for the surplus
cogenerated electricity. The programme was modified in August 1995 and subsequently
in September 1996 to attract sugar mills in the co-operative and public sector. The
important features of the programme include:
Demonstration scheme: provides a subsidy up to Rs. 60 million per project for 12
projects. The co-operative and public sector units are offered additional benefits of
13 http://www.mnre.gov.in/schemes/decentralized-systems/national-biomass-cookstoves-initiative/
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Rs. 20 million per Mega Watt (MW) of surplus power comprising of subsidies
and soft loans.
Interest subsidy scheme: provides grants up to Rs. 3.5 million per MW of surplus
power to financial institutions for them to reduce the interest rates on loans.
Support to R&D Projects: to contribute to enhancement of power potential.
International support: US$ 12.5 million USAID/GEF project for promotion of
alternative biomass use in co-generation using off-season, and an ADB line of credit
of $ 100 million.
Besides the Central Financial Assistance, fiscal incentives such as 80% accelerated
depreciation, concessional import duty, excise duty, tax holiday for 10 years etc., are
available for Biomass power projects. The benefit of concessional custom duty and excise
duty exemption are available on equipments required for initial setting up of biomass projects
based on certification by Ministry. In addition, State Electricity Regulatory Commissions
have determined preferential tariffs and Renewable Purchase Standards (RPS). Indian
Renewable Energy Development Agency (IREDA) provides loan for setting up biomass
power and bagasse cogeneration projects.
A summary of such provisions in different states of India is provided in Annexure -1
Annexure-2 provides a list of such biomass power projects resulting from such policies.
Annexure-3 provides the details of such central financial assistance schemes and provisions
for biomass power and cogeneration projects.
3.3.4.3 National biomass gasifier programme
The programme aiming at providing mechanical, electrical, thermal heating applications and
village electrification has been in operation since mid 80s. Financial incentives for installation
of gasifier systems are provided under the programme. Biomass gasifiers in the capacity
range of 5 kW to 1 MW equivalent electric capacity have been developed indigenously and
are being manufactured by around 15 manufacturers in the country. The systems being
proposed for village electrification applications are based on 100% producer gas which is a
recent technological development.
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The estimated cost of gasifier systems is about Rs.10, 000/-to Rs. 15,000/-per kWh for
thermal applications and Rs. 30,000/-to Rs. 45,000/-per kWe for mechanical and electrical
applications. The estimated cost of village electrification projects with biomass gasification
systems is about Rs. 50,000/-to Rs. 80,000/-per kWe in capacity range of 5 KW to 50 KW
including the cost of land, civil works, distribution lines and development. (1US$ = Rs. 60
approx.)
The biomass gasification systems are quite versatile for use in a diverse range of applications
in rural areas. Apart from use as a cooking fuel and for electricity generation, the gas can be
used for heating applications in village industries.
Biomass gasifiers in India are being made in capacities ranging from a few kWs to MW scale.
For heating applications, the current upper limit on unit size is equivalent to 300-500 Kg/hour
of oil consumption (which is equivalent of 1200 to 2000 kg. of biomass per hour). There are
about 12 manufacturers who offer gasifiers up to 1 MW capacity.
Technology for these systems has been developed by the research institutions with the
support of government. Some biomass gasifiers have also been exported to the USA, South
Asia, Europe and Latin America.
3.3.4.4 Programmes for building research institutions
The policy proposals aim at expanded and ambitious biomass programme. Addition of five
more biomass research centres to the existing nine was proposed during the ninth five year
plan itself, thereby covering all fourteen agroclimatic zones. In addition to the four
existing Gasifier Action Research Centers, it was also proposed to establish an
International Centre for Biomass Production and Conversion Technologies.
There is lack of authentic and readily usable data on availability of fodder, crop residues, agro
industrial by- products and feed grains (coarse cereal grains). There is a need to build an
actual database, on surplus agricultural, forestry and other similar bio wastes, to be used for
more effective and realistic planning of generation of energy to support the existing gap in
demand and supply.
The Ministry of New and Renewable Energy (MNRE) has initiated a detailed study and
creation of national database on the available and surplus biomass. The project has been
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assigned to the esteemed Indian Institute of Science, Bangalore (IISc). However, due to the
difficulties in collecting the huge amounts of data, the database is not being kept up to date,
with a result that detailed data is available only till the period 2004.
3.3.4.5 Programmes for Biomass based Energy in rural areas
The major biomass related rural energy programmes include:
i) Gasifier demonstration programme for higher capacity (100 KW) systems for captive
use. As on date, a total of 67 power plants have been commissioned with capacities varying
between 1 kW to 1,500 kW rating and the total installed capacity is of the order of about
8461.5 kW or 8.5 mW.14.
ii) Fiscal and financial incentives for biomass briquetting with a view to enhance supply
of briquettes to replace coal and oil, and
iii) A village electrification pilot project by MNES through biomass gasifiers and biogas
in unelectrified remote villages and coverage of 200 villages under biomass
electrification during the ninth plan period. Programmes for biomass based power
generation are relatively more ambitious. It is targeted to set up 500 MW biomass
based power capacity during the plan period. Significant allocations are proposed for
research and development activities (Rs. 770 million) and technical assistance and
publicity support (Rs. 90 million). It is also proposed to estimate the biomass potential
in different locations in India to guide the technology promotion effort.
3.3.4.6 Policies by state governments
A number of states have announced policy packages including banking, third party sale and
buy-back, which have been outlined in the respective technology or programme areas in this
report. Some states provide concessions or exemption in state sales tax. These rates vary
widely from state to state and between different technologies. Policies introduced by State
Government for purchase of electricity from Biomass Power projects have been laid down in
the policy document of the GOI.
Fourteen states have so far announced policies for the purchase and support of electrical
energy generated from various RE sources.
14 http://www.eai.in/ref/ae/bio/csbg/list_of_installation.html
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3.3.4.7 Incentives for investing in Renewable Energy Technologies
MNRE provides financial incentives, such as interest and capital subsidy
Soft loans are provided through:
IREDA, a public sector company of the Ministry Nationalised banks and other financial institutions for identified technologies/systems The government also provides various types of fiscal incentives for the RE sector,
which include:o Direct taxes-100 per cent depreciation in the first year of the installation of the
projecto Exemption/reduction in excise duty
Exemption from Central Sales Tax, and customs duty concessions on the import of material, components and equipment used in RE projects
Under Income Tax Rules following concessions are available to the non-conventional energy
sector:
Section 32: Accelerated 80% depreciation on specified RE-based devices/projects.
Section 80 IA: For industrial undertakings set up in any part of India for the generation or
generation and distribution of power at any time during the period beginning on the 1 st day of
April, 1993 and ending on the 31s' day of March 2003, 100% deduction is allowable from
profits and gains for first five years and thereafter 30 per cent of the profits and gains. This
benefit can be availed for any 10 consecutive assessment years falling within a period of 15
assessment years beginning with the assessment year in which that industrial undertaking
begins generation or generation and distribution of power. The budget for 2001-2002 has
proposed a 10-year tax holiday for the core sectors of infrastructure, including solid waste
management systems. This may be availed during the initial 20 years. Further, the budget has
also proposed a 10-year tax holiday for the generation and distribution of power, to be availed
during the initial 15 years.
Section 115 J: Exemption from Minimum Alternate Tax (MAT) to industrial undertakings on
profits derived from the business of generation and distribution of electricity.
Section 80JJA: 100% deduction in respect of profit and gains from business of
collecting and processing biodegradable wastes.
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Section 10 (23G): Income by way of dividends, interest or long-term capital gains of
infrastructure capital fund or infrastructure capital company from investments by way of
shares or long-term finance in any enterprise wholly engaged in the business of developing,
maintaining and operating any infrastructure facility and which has been approved by the
Central Government on an application made by it in accordance with the rules made in this
behalf and which satisfies the prescribed conditions. For the purpose of this clause among
other things, infrastructure facility means a project for generation or generation and
distribution of electricity or any other form of power where such project starts generating
power on or after April 1, 1993.
In addition, MNRE extends financial incentives for renewable energy power generation. The
incentives vary at different levels for special category of states and other states. Some of the
fiscal incentives available to both manufacturers and users of renewable energy systems
include:
100% accelerated depreciation for tax purposes in the first year of the installation of
projects/systems;
No excise duty on manufacture of most of the finished products;
Low import tariffs for capital equipment and most of the materials and components;
Soft loans to manufacturers and users of commercial and near commercial
technologies;
Five year tax holiday for power generation projects;
Remunerative price under alternate power purchase policy by State Government for
the power generated through renewable energy systems, fed to the grid by private
sector;
Facility for banking and wheeling of power;
Facility for Third party sale of renewable energy power;
Financial Incentives/Subsidies for devices with high initial cost;
Involvement of women not only as beneficiaries but also for their active contribution
in implementation of renewable energy programmes;
Encouragement to NGOs and small entrepreneurs;
Special thrust for renewable energy in North-Eastern region of the country. 10% of
Plan funds earmarked for North-East towards enhanced and special subsidies.
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3.4 Analysis of Foreign Investment Policy
Analysis of renewable energy relevant features of Foreign Investment Policy revealed the
following:
Foreign investors can enter into a joint venture with an Indian partner for financial and
/or technical collaboration and for setting up of renewable energy based power
generation projects.
Proposals for up to 100 per cent foreign equity participation in a joint venture qualify
for automatic approval.
100 per cent foreign investment as equity is permissible with the approval of the
Foreign Investment Promotion Board (FIPB).
Foreign investors can also set up a liaison office in India
The Government of India also encourages foreign investors to set up renewable
energy based power generation projects on Build, Own and Operate (BOO) basis.
Various Chambers of Commerce and industry associations in India provide guidance
to the investors in finding appropriate partners
The Government of India encourages foreign investors to set up power projects on
BOO basis. Investors are required to enter into a power purchase agreement with the
concerned state government
No prior approval of the government is required to set up an industrial undertaking
with Foreign Direct Investment (FDI) by Non-Resident Indians (NRIs) or Overseas
Corporate Bodies (OCBS)
The Reserve Bank of India (RBI) has permitted Indian companies to accept
investment under the 'automatic route' without obtaining prior approval from RBI.
Investors are required to notify the regional office of RBI, of receipt of inward
remittances within 30 days of such receipt and file required documentation within 30
days of issue of shares to foreign investors Foreign Investment Promotion Board
(FIPB)
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3.5 Gaps/inadequacies in current policy framework
The analysis of the current policy framework reveals several gaps and/or inadequacies. These
are briefly discussed below.
3.5.1 Uncertain economic viability of biomass to energy projects
A study of the current scenario of biomass energy projects reveals that the comparison of
prices of biomass energy is made entirely on the basis of conventional energy sources. The
projects are primarily based on various subsidies provided by the central and state
governments and are highly vulnerable to volatile markets as regards the price of the basic
biomass is concerned. In most cases, while the prices are reasonably low at the time of
starting of any project, the vendors and producers of agricultural biomass invariably increase
the prices of the material in due course, thus rendering most of the projects economically
unviable. With regards to technologies, most of the technologies are highly energy intensive
in their own operation. The auxiliary power requirement for running the systems warrants the
availability of conventional power to operate the system. Although the specific energy
consumption of such systems is quite attractive, being low, but the installed load is rather
high.
There is a total lack of understanding of the importance of biomass energy in general public,
and most of the projects thus have ended up as demonstration projects only, primarily based
on some or the other subsidy or incentive provided by the local governments.
Most of the biomass energy projects are considered too small to take advantage of economies
of scale with larger processing units that lead to reduced unit costs. The developers do not
understand that increasing the scale/size of the biomass production and processing capacity
can actually help the growth of supporting R&D and subject specialists which will lead to the
creation of a situation where the industry can generate more investments.
3.5.2 Irrational incentive schemes for biomass to energy projects
The current incentive schemes usually provide support in the form of subsidies and low
interest loans for establishing a biomass to energy facility. This results in an initial rush of
entrepreneurs wanting to take advantage of the subsidy without looking into the term
economic viability of the project. The issue gets further exacerbated as the tariffs for biomass
based power plants are calculated on the same lines as for large thermal power plants.
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Considering the small size of biomass plants, there are many cost elements which cannot be
accurately worked out right from the beginning thus resulting in a large number of projects
becoming unviable in a short time.
3.5.3 Preference to large size biomass to energy projects
The government’s emphasis continues to be to support large size projects. Knowing that cost
of transporting biomass is a major cost element and that the large size plants will have to
source biomass from a large catchment area thus increasing the transportation cost. On the
other hand, small decentralized biomass to energy projects can source their biomass from a
small local area at relatively lower transportation costs. Not only the invest cost per project is
much lower, such small projects also provide much large employment per unit of investment
cost.
3.5.4 Application of same environmental and land use related regulations
Almost all the biomass projects need to be built on agricultural lands. The project proponents
need to go through the same process, as for any other industry, for conversion of agricultural
land for non-agriculture use. This is a time consuming and tedious process as the government
departments dealing with such process do not distinguish between the merits of biomass to
energy vis-à-vis other usual projects. For such biomass power plant, either the use of
agriculture land should be allowed or there should be automatic process of conversion as soon
as approval is given by State Nodal Agency. This will accelerate the process of setting up of
small biomass power plants in the country.
Similarly, biomass-to-energy projects require same level of environmental clearance from
State pollution Control Board through it is a source of Green Energy. It is again time
consuming and tedious process. Biomass to energy projects should be given directly
approval, while the concerned pollution control boards can exercise all the monitoring of the
environmental norms.
3.5.5 Lack of emphasis on technology research and development
The current policies do not adequately support the necessary research required to develop
innovative technologies which are economically viable and locally suitable. The research
should extent to cover farm machinery as well so that waste agricultural biomass can be
properly collected and stored.
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3.5.6 Location of biomass to energy plants
In many states, biomass-to-energy projects are covered under Scheduling and ABT
mechanism of power generation. Theoretically, biomass power can be considered as Firm
Power like thermal power but in practice, due to various issues involved in use of biomass, it
is really infirm power and Scheduling and ABT mechanism should not be made applicable to
such plants.
It is understood that the biomass energy to projects should not be either in or close to any of
the existing industrial and urban locations, and should be located in identified rural areas and
at least say 50 Kms. from any such location. Such provisions should continue to apply.
Similarly, to ensure that the units are economically viable, two such units should be separated
by a distance of at least 50 Kms. from each other. This is necessary to ensure that the
resources available in a given region and so also the logistics of handling and transportation
support the viability of one unit.
3.6 Policy drivers to promote enhanced conversion of waste agricultural
biomass into energy
Appropriate amendments to the existing policy are needed to enhance the use of waste
agricultural biomass as a source of energy. The main drivers for formulating a conducive
policy framework are as follows:
• GHG emission: Reduction in emission of green house gases by substitution of
equivalent amount of fossil fuels as waste agricultural biomass being a renewable
form of energy is basically carbon-neutral.
• Energy security: with recent concerns over the reliability of petroleum oil supplies, the
country needs to increase its energy security by enhancing domestic energy supplies.
• Environmental co-benefits: enhancing conversion of waste agricultural biomass into
energy will also help to achieve other environmental objectives, such as improving air
quality (e.g. reducing smoke and particulates emission particularly short lived climate
pollutants), and biodiversity conservation.
• Rural development: the increase in biomass feedstock offers the potential to expand
market opportunities for agriculture, while providing a new opportunity to stimulate
rural industrial development and employment.
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• Economic development: At current market prices, the cost of energy produced from
waste agricultural biomass is considerably lower than that from fossil fuels
particularly oil and gas. Lower energy cost will have a cascading impact on cost
competitiveness of goods and services.
• Market innovation: Enhanced conversion of waste agricultural biomass can also spur
the development of a bioeconomy as an engine of growth and market innovation. This
can, on one side, offer possibilities in developing local solutions to energy needs and
industrial development, and also raise the opportunity for exports based on new and
emerging bio based technologies.
3.7 Challenges for enhancing conversion of waste agricultural biomass into
energy
Government policy is the biggest factor behind lack of investment in bio-power sector in
states with high biomass potential. Defragmented nature of agricultural land does not allow
high mechanization which results in reduction of efficiency and increase in procurement cost.
Most of the farmers are small or marginal with little or no investment capacity, little or no
education and somehow meet their own needs through agriculture.
Transportation cost constitutes a significant portion of the costs associated with the
establishment and running of biomass power plants. There is need of processing in form of
shredding the biomass onsite before transportation to increase its density when procurement
is done from more than a particular distance. While transportation in any kind or form from
more than 50 Km becomes unviable for a power plant of size 10-15MW. European power
plants are importing their biomass in form of pellets and briquettes from other countries to
meet the requirement of the huge bio-power plants.
To ensure that the benefits of such technology development are transferred to the farmers, and
providing them a competitive cost of the agricultural waste, local entrepreneurs should be
motivated to take up the responsibility of supplying biomass to processing facilities.
Collection centres covering a group of villages can be set up to facilitate decentralization of
biomass supply mechanism.
Outputs VIII of the SSFA Policy Recommendations for India Page 35
“Converting waste agricultural biomass into energy” Resource Conservation and GHG
Emission Reduction
At this stage it may be prudent to briefly mention biofuels of which the world is witnessing15
a sudden growth, especially those suited for replacing oil like ethanol and biodiesel. The
environmental, economic, and policy studies reveal the possible ill-effects of these types of
biofuels. The studies have come to three key conclusions.
i) The current generation of biofuels, which is derived from food crops, is intensive in
land, water, energy, and chemical inputs. It also gives rise to the debate of energy
security vs. food security
ii) The literature is dominated by a discussion of net carbon offset and net energy gain,
while indicators relating to impact on human health, soil quality, biodiversity, water
depletion, etc., have received much less attention.
iii) There are a large number of policies - including energy, transportation, agricultural,
trade, and environmental policies - which influence the development of biofuels.
However, the policies and the level of subsidies do not reflect the marginal impact on
human welfare or the environment. In summary, all biofuels are not created equal.
They exhibit considerable spatial and temporal heterogeneity in production. Thus, the
impact of biofuels will also be heterogeneous, creating winners and losers.
It is well known that agriculture has the potential to help meet the growing energy and raw
material needs of society in a sustainable manner and a necessary step towards a biobased
economy. However, like any other commercial option, agricultural biomass can only be
considered sustainable if it meets the conditions of economic viability; social acceptability;
environmentally neutrality or positivity, pro-rural development; and is compatible with policy
goals for agriculture, environment, energy, industry.
The issues related with the environmental advantages or otherwise of biomass usage for
energy however vary with the type process of production of the particular biomass.
Fiscal incentives on different biomass products like the central/state excise duty exemptions,
price offsets or incentives for using bioenergy, like the briquetted biomass, coal from biomass
or electricity generated using biomass etc. should also include support to farmers.
The rationale for any such policy interventions in this field should be based on the scope,
potential and impact on: 15 http://ideas.repec.org/p/wbk/wbrwps/4341.html
Outputs VIII of the SSFA Policy Recommendations for India Page 36
“Converting waste agricultural biomass into energy” Resource Conservation and GHG
Emission Reduction
Reducing greenhouse gas emissions;
Making energy available to every nook and corner of the country;
Environmental co-benefits like biodiversity, natural resource conservation; and
Supporting or strengthening of various socio-economic initiatives, such as rural
income generation and rural employment creation.
India should emphasise on developing the agricultural biomass technologies with primary
concentration on converting waste agricultural biomass into energy. Annexure-4 provides the
details of such exemptions.
Outputs VIII of the SSFA Policy Recommendations for India Page 37
“Converting waste agricultural biomass into energy” Resource Conservation and GHG
Emission Reduction
4 Proposed National Strategy for enhancing conversion of waste agricultural biomass into energy
The estimated potential in the country to generate power from wind, small hydro and biomass
is around 80,000 MW. Electricity generation from these sources is becoming increasingly
competitive with some preferential treatment being meted out to them. The Government of
India’s aim is that 10 percent of the additional grid interactive power generation capacity
should come from renewable sources during the 10th & 11th Plan periods. The challenge is to
mainstream renewable based power generation in terms of reliability, quality and cost. This
can be met to a large extent by addressing issues pertaining to the need to lower the cost of
equipment, increase its reliability and set up projects in areas which give the maximum
advantage in terms of capacity utilisation. Keeping in view the large potential of waste
agricultural biomass as a source of energy, the following vision is proposed.
4.1 Vision
Utilize at least 50% of waste agricultural biomass as a source of energy by 2025 and at least
70% by 2030 by building requisite infrastructure and development of human resources.
4.2 Objectives
The strategy is based on the following objectives:
a. Establishment of efficient collection and transportation system for waste agricultural
biomass, from the point of generation to the point of application
b. Development, promotion and wide-scale implementation of technologies to either convert
waste agricultural biomass directly into energy (such rice-husk or bagasse fired boilers) or
convert it into more easily usable fuel (such as briquetting or pelletising to make solid fuel,
pyrolysis for making char, thermal gasification and anaerobic digestion to make gaseous
fuels).
c. Price equalisation, fiscal incentives and financial subsidies to create greater business
interest in waste agricultural biomass to energy projects.
Outputs VIII of the SSFA Policy Recommendations for India Page 38
“Converting waste agricultural biomass into energy” Resource Conservation and GHG
Emission Reduction
d. Raising awareness among all energy and fuel users to switch over from fossil fuels to fuels
derived from waste agricultural biomass.
e. Building capacity to support increased application of waste agricultural biomass as a source
of energy and carry out research and development of technologies tailor-made to suit socio-
economic conditions of India.
4.3 Targets
By 2035, energy generation from waste agricultural biomass reaches 35,000 MW (9 percent
of the additional grid interactive power generation capacity). At this level waste agricultural
biomass will replace 80 million tons of coal and avoid 40 million tons of GHG emissions
annually.
4.3.1 Scope and Timing
The strategy covers the entire Republic of India and includes all types of waste agricultural
biomass as illustrated earlier. The period of strategy implementation is 2014-2035.
4.4 Relation to other strategies
The strategy complements and supports the renewable energy policy. It is in support of major
ongoing programmes of Ministry of New and Renewable energy such as; biomass cook-
stoves programme, biomass based electric power generation, and biomass based energy in
rural areas. It also supports the climate change related policy (National Action Plan on
Climate Change – target of GHG emission mitigation of 98 million tons per year).
4.5 Specific elements of the strategy
The strategy is built around following key elements, which when implemented will enable the
objectives to be met.
4.5.1 Comprehensive data base on availability of waste agricultural biomass
There is lack of authentic and readily usable data on availability of crop residues and waste
agricultural biomass, agro industrial by- products and coarse cereal grains. There is a need to
Outputs VIII of the SSFA Policy Recommendations for India Page 39
“Converting waste agricultural biomass into energy” Resource Conservation and GHG
Emission Reduction
build an actual database, on surplus agricultural, forestry and other similar bio wastes, to be
used for more effective and realistic planning of generation of energy.
The Ministry of New and Renewable Energy (MNRE) has initiated a detailed study and
creation of national database on the available and surplus biomass. The project has been
assigned to the esteemed Indian Institute of Science, Bangalore. However, due to the
difficulties in collecting the huge amounts of data, the database is not being kept up to date,
with a result that detailed data is available only till the period 2004. The data base needs to be
continually updated and disseminated for wider use.
4.5.2 Enable sustainable and affordable supply of waste agricultural biomass to points
of application
By its nature, waste agricultural biomass is generally available in rural whereas the
opportunities for using it to replace fossil fuels is more in urban and industrial areas. Thus
provisions have to be made so that waste agricultural biomass is available in urban and
industrial areas. Since biomass is very bulky material (low bulk density), transporting it in
loose form may be quite expensive and inefficient. Thus collection centres for collecting and
densifying (e.g. baling, briquetting, pelletising) relatively dry biomass (such as rice straw,
wheat straw, husks etc.) may be required.
4.5.3 Technology modernisation
Future penetration of biomass technologies will depend vitally on the cost and reliability of
delivered energy services. Foremost option for this is the efficient conversion technologies
that deliver reliable, better quality and higher level of energy services for the same biomass
input. This will need modernization of biomass conversion technology and taking advantage
of applications such as co-generation in sugar mills and wood processing units. A softer but
effective response to improve productivity is better management of biomass systems through
options like:
i) Shift of ownership from government to private, co-operative and community
organizations,
ii) Professional management of biomass plantation and end-products systems,
iii) Improved institutional support by co-ordination with multiple agencies,
Outputs VIII of the SSFA Policy Recommendations for India Page 40
“Converting waste agricultural biomass into energy” Resource Conservation and GHG
Emission Reduction
Research for development of innovative technologies which are simpler to operate and less
capital intensive needs to be promoted as investment capacity of entrepreneurs in this sector
is much lower compared to that of usual industrial entrepreneurs. Research should also extend
to agricultural engineering to develop farm machines which facilitate collection and pre-
processing of waste agricultural biomass.
4.5.4 Price regulation of waste agricultural biomass
It has been experienced globally, and especially in India, that as long as a productive use of
any waste is not identified, the generators of the waste pay for disposing it. However, as soon
as a productive and value added use for such waste is found, the prices of such waste have
escalated. This is further complicated by the fact that many users jump in to the fray, thus
creating a higher demand for such waste, and the suppliers resort to escalating the prices of
such waste. Over a period of time, the project on utilizing waste becomes economically
unviable.
Particularly in case relatively large scale projects such as power projects the price of biomass
increases very fast after the commissioning of the project. The government should, therefore,
implement a biomass tariff policy with provisions for periodic revisions.
Transportation cost constitutes a significant portion of the costs associated with the
establishment and running of biomass power plants. There is need of processing in form of
shredding the biomass onsite before transportation to increase its density when procurement
is done from more than a particular distance. Transportation of waste agricultural biomass of
any kind and in any form becomes unviable over distances of 50 Km. European power plants
are importing their biomass in form of pellets and briquettes from other countries to meet the
requirement of the huge bio-power plants.
To ensure that the benefits of such technology development are transferred to the farmers, and
providing them a competitive cost of the agricultural waste, local entrepreneurs should be
motivated to take up the responsibility of supplying biomass to pre-processing facilities.
Collection centres covering a group of villages can be set up to facilitate decentralization of
biomass pre-processing and supply mechanism.
Another area which indirectly affects the pricing of waste agricultural biomass is the
subsidies being given to fossil fuels. In India, the substitute commercial fuel for biomass in
Outputs VIII of the SSFA Policy Recommendations for India Page 41
“Converting waste agricultural biomass into energy” Resource Conservation and GHG
Emission Reduction
the domestic cooking sector is kerosene. In commercial energy market, the biomass competes
with kerosene in domestic use and with diesel in irrigation pumping and rural electricity
generation. Both diesel and kerosene enjoy substantial subsidy as these are considered
to be the fuels for meeting the needs of poor strata of society. The implicit price of
biomass on the market is equivalent to replacement price of kerosene and diesel. With
subsidies under-pricing kerosene and diesel, the energy producers from biomass are unable to
fetch economic prices in commercial energy markets.
4.5.5 Fiscal Incentives
Some fiscal incentives for the biomass power generation projects have already been provided.
These include accelerated depreciation, income tax holiday, customs/excise duty exemption,
exemption from central and state sales taxes etc. These should be continued. Additionally,
exempting the biomass power plants from payment of electricity duty will help in
accelerating the growth of this sector.
Equally important is the shift of the emphasis of the MNES from direct financial subsidy and
demonstration projects to relying more on fiscal subsidies which usually encourage serious
renewable energy developers and users. The provision of soft loans will leverage private-
sector investment, and increase the funds available with IREDA. Though financial subsidies
will have to be continued to be provided for some more time, these should be phased out
fairly rapidly as the fiscal incentives being strengthened.
4.5.6 Financial subsidies
The rationale for financial subsidies in this field should be based on the scope, potential and
impact on:
Reducing greenhouse gas emissions;
Making energy available to every nook and corner of the country;
Environmental co-benefits like biodiversity, natural resource conservation; and
Supporting or strengthening of various socio-economic initiatives, such as rural
income generation and rural employment creation.
Financial subsidies may also be required to promote technological innovation ad reducing
technology costs. However, such incentives should be given only to the first few and original
developers of a specific concept and process. It is because an analysis of the past rend in India
Outputs VIII of the SSFA Policy Recommendations for India Page 42
“Converting waste agricultural biomass into energy” Resource Conservation and GHG
Emission Reduction
has revealed that there is a mad rush by unscrupulous players who are just interested in the
incentive. The ventures undertaken by such players have often failed.
The financial subsidy schemes (and also the fiscal incentives) should be so designed so that it
facilitates a balance between creating demand for energy from waste agricultural biomass and
feedstock supply. The schemes should specifically target areas where fossil fuels are favoured
because of the corresponding subsidies. It should be ensured that the technologies used
conform to appropriate international standards, and that there are codes of best practice in
place to ensure that carbon savings are delivered and wider environmental benefits are
maximised. Clear lines of communication should be established between technology and
feedstock suppliers, processors and potential users, and also across relevant government
agencies responsible for the bio-economy, especially agriculture, environment, energy,
industry, science and technology.
The transportation costs are the primary reason for not using all of the available biomass
which is spread across the country, mainly on economic and cost grounds. Financial subsidies
to promote the application and use of compaction and other pre-processing technologies for
waste agricultural biomass can be provided under specific incentive schemes.
Such financial incentive measures will help close the gap between production costs and
market prices for biomass products relative to those based on fossil fuels. The policies should
aim at focused maximisation of environmental benefits, encourage innovation and reduce
technology costs in the utilisation of biomass for bioenergy.
4.5.7 Awareness raising
The rate of development of agricultural biomass and related bio products, are also considered
to be influenced by institutional infrastructures and public education. Developing a sound
institutional infrastructure for the biomass industry can act as an engine of growth,
particularly if the institutional links are developed both horizontally and vertically in the
industry. Raising public awareness of the benefits of biomass, particularly for the local
communities where production and processing capacity might be developed, is also viewed as
an important prerequisite to engage local communities in trying to achieve the success of
these projects. Such a step would also help in decelerating the exodus of rural population to
larger towns and cities.
Outputs VIII of the SSFA Policy Recommendations for India Page 43
“Converting waste agricultural biomass into energy” Resource Conservation and GHG
Emission Reduction
4.5.8 Capacity building
There is an acute shortage of trained manpower in the field of converting waste agricultural biomass
to energy. Intensive capacity building is required in all areas ranging from assessment and
characterization of waste agricultural biomass to design and implementation of technologies.
There are a number of institutions which develop and deliver such capacity building
programmes. For example, The National Small Industries Corporation (NSIC), under the
Ministry of Industry and Commerce, provides assistance through a number of schemes, which
include financial and marketing services, technical services and training, etc. Specifically
NSIC arranges training in technical trades, both traditional and high-tech.
Capacity building materials that need to be developed should include; compilation of best
practices and guidelines for replication, assessment tools such as Life-Cycle Analysis (LCA)
and Sustainability Assessment of Technologies (SAT).
Capacity building schemes should also take in to account the potential for productive
deployment of various provisions under other governmental institutions like the Mahatma
Gandhi National Rural Employment Guarantee Act (NREGA), many other rural employment
schemes, provisions under the Ministry of Rural Development, the Industrial Training
Institutes (ITIs), The National Small Industries Corporation (NSIC) etc.
Such an approach will help serve some major objectives of possible employment shortage of
semi-skilled workers by training the rural youth and providing them with bio energy specific
technical knowhow.
Indirect programmes like awareness-raising activities such as seminars and business meets,
technical support like making available services of international experts and organizing
interaction meetings among the stakeholders like state governments, utilities, financial
institutions, manufacturers, consultants and project parties should also be promoted.
In summation, what is needed in India is a shift in perspective of biomass energy strategies
in the following respects:
i) T reating biomass as a competitive modern energy resource rather than a
traditional, inefficient unclean and non-commercial "poor man's fuel",
Outputs VIII of the SSFA Policy Recommendations for India Page 44
“Converting waste agricultural biomass into energy” Resource Conservation and GHG
Emission Reduction
ii) Enlarging biomass energy applications beyond decentralized niche markets to
competitive energy service markets, and,
iii) Reorienting the technology policy from supply push to demand (market) pull
approach,
iv) Integrating biomass energy policies with developmental and environmental policies.
Outputs VIII of the SSFA Policy Recommendations for India Page 45
“Converting waste agricultural biomass into energy” Resource Conservation and GHG
Emission Reduction
4.6 Implementation and delivery mechanism
The following implementation mechanism is proposed to achieve the objectives of the
strategy through addressing the various elements
Implementing MechanismStrategy Objective
Strategy Element Actions Expected time frames
Level of funds required
1. Establishment of efficient collection and transportation system for waste agricultural biomass, from the point of generation to the point of application
a. Comprehensive data base on availability of waste agricultural biomass
i. Identify potential institutions to support on-going work.
On-going Low
ii. Earmarked budgetary provisions
b. Enable sustainable and affordable supply of waste agricultural biomass to points of application
i. Identify appropriate densifying technologies
3-5 years Moderate
ii. Establish collection centres for collecting and densifyingiii. Identify users of densified biomass
b. Development, promotion and wide-scale implementation of technologies to either convert waste agricultural biomass directly into energy (such rice-husk or bagasse fired boilers) or convert it into more easily usable fuel
a. Technology modernisation
Identify appropriate technologies
5-10 years High
b. Enhancing funding sources
Support technical institutions to adapt the technologies to suit local socio-techno-economic conditions
c. Promoting efficient technologies such as briquetting, biomass cooking stoves, etc.
Establish research projects to develop innovative, cost-effective technologies
Outputs VIII of the SSFA Policy Recommendations for India Page 46
“Converting waste agricultural biomass into energy” Resource Conservation and GHG
Emission Reduction
c. Price equalisation, fiscal incentives and financial subsidies to create greater business interest in waste agricultural biomass to energy projects.
a. Price regulation of waste agricultural biomass
Establish biomass tariff policy with provisions for periodic revision
3-5 years Low
b. Fiscal Incentives
Strengthen existing fiscal incentives and establish (e.g. exemption from electricity duty) as required.
3-5 years High
c. Financial subsidies
Establish financial subsidy 5-8 years High schemes to promote
technological innovation and reduction in technology costs.
establish schemes so as to create a balance between demand and supply of biomass
establish subsidy schemes to bring about a parity in price of biomass and fossil fuel for the same thermal value
d. Raising awareness among all energy and fuel users to switch over from fossil fuels to fuels derived from waste agricultural biomass
a. Awareness raising
i. Develop awareness raising materials
3-5 years Low
ii. Launch awareness raising programmes through mass media, workshops and distribution of materials
e. Building capacity to support increased application of waste
b. Institutional capacity building
i. Identify appropriate institutionsii. Assess capacity building needs
5-8 years Moderate
iii. Develop capacity
Outputs VIII of the SSFA Policy Recommendations for India Page 47
“Converting waste agricultural biomass into energy” Resource Conservation and GHG
Emission Reduction
agricultural biomass as a source of energy
building materials and deliver capacity building programmes
Outputs VIII of the SSFA Policy Recommendations for India Page 48
“Converting waste agricultural biomass into energy” Resource Conservation and GHG
Emission Reduction
5 Conclusion
Energy generation from waste agricultural biomass in India is a must for sustainable
development and meeting the national plan targets.
Considering the global melt down and the economic scenario, while enough efforts are on
way, India still faces short-term setback in renewable energy investment16:
Investments in renewable energy sector will be sluggish in the short term globally, including
in India. The global investments in renewable energy sector are likely to continue to decline
in the short term. Very much like the global trend, there is a short-term setback in renewable
energy investments in India, assigned to lack of implementation of Renewable Energy
Purchase Obligation (RPO) by the distribution utilities and designated consumers.
However, the scope and potential for global renewable energy industry seem to be attractive
in the future times to come, as technology improves and costs decline. About 118 countries
have renewable energy targets in place and the demand for clean energy is also on the rise.
Undoubtedly, waste agricultural biomass will play a very important role in coming years on
the renewable energy scene in India.
16 Deloitte report: July 2013
Outputs VIII of the SSFA Policy Recommendations for India Page 49
“Converting waste agricultural biomass into energy” Resource Conservation and GHG
Emission Reduction
Annexure-1
Status of biomass power cogeneration tariff across states
(AS ON 31.03.2011)
State Tariff fixed by Commissions RP0 %
Andhra Pradesh (BM) Rs.4.28/kWh, (2010-11) Min. 3.75%
(Cogen) Rs.3.48/kWh
Chattishgarh (BM) @Rs.3.93/Unit (2010-11) 5%
Gujarat (BM) Rs.4.40/unit (with accelerated
depre.)
10%
(Cogen) Rs.4.55/unit (with accelerated depre.) for
1st 10 yrs
Haryana (BM)
Rs.4.00/unit: 3%escalation (base year 2007-
08)
1%
(Cogen) Rs.3.74/unit: 3%escalation (base year 2007-
08)
Karnataka (BM) Rs.3.66 per unit (PPA signing date) Rs.4.13
(10th year)
Min.10%
(Cogen) Rs.3.59/unit, (PPA signing date)
Rs.4.14/unit (10th Year)
Kerala Rs.2.80/unit (BM) escalated at 5% for five
years (2000-01)
3%
Maharashtra (BM) Rs. 4.98 (2010-11) 6%
(Cogen) @Rs.4.79/unit (Comm yr.)
Madhya Pradesh Rs.3.33 to 5.14 /unit paise for 20 yrs. With
escl of 3- 8paise
0.8%
Punjab (BM)
Rs.5.05 /unit, (2010-11) escalated at 5% -
cogen, & 5%-BM
Min. 3%
(Cogen) Rs.4.57/unit (2010-11)
Rajasthan -(BM) Rs.4.72 / unit-water cooled (2010-11) 1.75%
Outputs VIII of the SSFA Policy Recommendations for India Page 50
“Converting waste agricultural biomass into energy” Resource Conservation and GHG
Emission Reduction
& Rs.5.17-air cooled (2010-11)
Tamil Nadu (BM) Rs.4.50-4.74/unit(2010-11) Min. 13%
(Cogen) Rs.4.37-4.49/unit (2010-11)- (Escalation 2%)
Uttaranchal BM Rs.3.06/unit. (2010-11) – 9%
(Cogen) Rs.3.12/unit (2010-11)- (new projects)
U.P. Rs.4.29 / unit, for existing and 4.38 for new
with escalated at 4 paise/year, base year
(2006)
4%
West Bengal BIOMASS Rs. 4.36/unit fixed for 10 years 4%
Bihar BIOMASS
new
(Cogen)
Rs. 4.17/unit (2010-11)– 1.5%
(Cogen) Rs.4.25/unit (2010-11) – existing and
Rs.4.46/unit (2010-11) –
Orissa Rs.4.09/unit
O.A.. - Open Access terms & conditions as for CERC and SERC’s order
(kindly contact concerned Regulatory Commissions for details)
Outputs VIII of the SSFA Policy Recommendations for India Page 51
“Converting waste agricultural biomass into energy” Resource Conservation and GHG
Emission Reduction
Annexure -2
List of biomass power projects commissioned
STATE-WISE/YEAR-WISE LIST OF COMMISSINED BIOMASS
POWER/COGENERATION PROJECTS (AS ON 31.03.2011)
S.No. State
Upto
31.03.2003
2003-
04
2004-
05
2005-
06
2006-
07
2007-
08
2008-
09
2009-
10
2010-
11
Total
(MW)
1
Andhra
Pradesh 160.05 37.70 69.50 12.00 22.00 33.00 9.00 20.00 .. 363.25
2 Bihar -- -- -- -- -- -- -- 9.50 9.50
3 Chattisgarh 11.00 -- -- 16.50 85.80 33.00 9.80 43.80 32.00 231.90
4 Gujarat 0.50 -- -- -- -- -- -- -- -- 0.50
5 Haryana 4.00 -- 2.00 -- -- -- -- 1.8 28.00 35.80
6 Karnataka 109.38 26.00 16.60 72.50 29.80 8.00 31.90 42.00 29.00 365.18
7
Madhya
Pradesh 1.00 -- -- -- -- -- -- -- 1.00
8 Maharashtra 24.50 -- 11.50 -- 40.00 38.00 71.50 33 184.50 403.00
9 Punjab 22.00 -- -- 6.00 -- -- -- 34.50 12.00 74.50
10 Rajasthan 7.80 -- 7.50 8.00 -- 8.00 -- 42.00 73.30
11 Tamil Nadu 106.00 44.50 22.50 -- 42.50 75.00 43.20 62.00 92.50 488.20
12 Uttarakhand -- -- -- -- -- -- -- -- 10.00 10.00
13
Uttar
Pradesh 46.50 12.50 14.00 48.50 -- 79.00 172.00 194.50 25.50 592.50
14
West
Bengal -- -- -- -- -- -- 16.00 -- 16.00
Total 483.93 129.50 136.10 163.00 228.10 266.00 345.40 447.60 465.00 2664.63
Outputs VIII of the SSFA Policy Recommendations for India Page 52
“Converting waste agricultural biomass into energy” Resource Conservation and GHG
Emission Reduction
Annexure -3
CFA for Biomass Power Project and Bagasse Cogeneration Projects by
Private/Joint/Coop./Public Sector Sugar Mills
Special Category States(NE Region,
Sikkim, J&K, HP & Uttaranchal)
Other States
Project Type Capital Subsidy Capital Subsidy
Biomass Power projects Rs.25 lakh X(C MW)^0.646 Rs.20 lakh X (C MW)^0.646
Bagasse Co-generation by
Private sugar mills
Rs.18 lakh X(C MW)^0.646 Rs.15 lakh X (C MW)^0.646
Bagasse Co-generation projects
by cooperative/ public sector
sugar mills 40 bar & above
60 bar & above
80 bar & above
Rs.40 lakh *
Rs.50 lakh *
Rs.60 lakh *
Per MW of surplus power@
(maximum support Rs. 8.0 crore per
project)
Rs.40 lakh *
Rs.50 lakh *
Rs.60 lakh *
Per MW of surplus power@
(maximum support Rs. 8.0
crore per project)
PROJECT TYPE MINIMUM CONFIGURATION CAPITAL SUBSIDY
Single coop. mill through
BOOT/BOLT Model
60 bar & above 80 bar & above Rs.40 L/MW of surplus power
*Rs.50 L/MW of surplus
power*(maximum support Rs.8.0
crore/ sugar mill)
* Power generated in a sugar mill (-) power used for captive purpose i.e. Net power fed to the
grid during season by a sugar mill.
CFA for Bagasse Cogeneration Project in existing cooperative sector sugar mills employing
boiler modifications
PROJECT TYPE MINIMUM CONFIGURATION CAPITAL SUBSIDY
Existing Cooperative Sugar
Mill
40 bar & above 60 bar & above80
bar & above
Rs.20 L/MW of surplus power
* Rs.25 L/MW of surplus
Outputs VIII of the SSFA Policy Recommendations for India Page 53
“Converting waste agricultural biomass into energy” Resource Conservation and GHG
Emission Reduction
power* Rs.30 L/MW of surplus
power*
* Power generated in a sugar mill (-) power used for captive purpose i.e. Net power fed to the grid
during season by a sugar mill. CFA will be provided to the sugar mills who have not received CFA
earlier from MNRE under any of its scheme.
Note: CFA and Fiscal Incentives are subject to change.
*For new sugar mills, which are yet to start production and existing sugar mills employing
backpressure route/seasonal/incidental cogeneration, which exports surplus power to the grid,
subsidies shall be one-half of the level mentioned above.
@ Power generated in a sugar mill (-) power used for captive purpose i.e. net power fed to the
grid during season by a sugar mill.
Note: CFA and Fiscal Incentives are subject to change.
Outputs VIII of the SSFA Policy Recommendations for India Page 54
“Converting waste agricultural biomass into energy” Resource Conservation and GHG
Emission Reduction
Annexure-4
Special exemptions
Item Description
Accelerated Depreciation 80% depreciation in the first year can be claimed for the
following equipment required for co-generation systems:
Back pressure, pass-out, controlled extraction, extraction–
cum-condensing turbine for co-generation with pressure
boilers
Vapour absorption refrigeration systems
Organic rankine cycle power systems
Low inlet pressures small steam turbines
Income Tax Holiday Ten years tax holidays.
Customs / Excise Duty Concessional customs and excise duty exemption for
machinery and components for initial setting up of
Biomass power projects.
General Sales Tax Exemption is available in certain States
Outputs VIII of the SSFA Policy Recommendations for India Page 55