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Workshop on Regulatory and Financial Barriers and
Jun 09, 2014

Challenges in Power Generation from Biomass

Ministry of New & Renewable Energy (MNRE) organized a Workshop on Regulatory and Financial Barriers and Challenges in Power Generation from Biomass on June 9. In the workshop the importance of biomass based power generation was underlined. It plays a very important role among various renewable sources due to its high Plant Load Factor (PLF), affordable unit cost of generation, potential to provide large scale productive employment and the other economic benefits to farmers who are main producers of biomass and therefore, biomass power generation a focus area of the Ministry. The present cumulative installed capacity of biomass based power plants, both grid-interactive and off-grid, is about 4700 MW in India.

Despite so many inherent benefits, a number of biomass power projects, of late have been facing problems in their operation due to high cost of operation. This is mainly due to continuous rise in biomass prices. On the other hand, the revision of tariff for biomass based power by State Electricity Regulatory Commissions (SERC’s) has not kept pace with the increasing costs of biomass. Also the existing inconsistencies in values of the certain parameters have to be harmonised and taken into account by SERC’s for determination of tariff. In the current scenario, Financial Institutions have displayed reluctance in financing biomass power projects, thereby posing problems for new investments in the sector. The Distribution Companies, who are key to the off take of biomass power, have also not been pro-active. They could play a more proactive and encouraging role in order to promote the sector.

In the workshop an appeal was made to the SERC’s to help in effecting reforms by taking cognizance of the revised regulations recently notified by Central Electricity Regulatory Commission (CERC) and pass on the benefits to the biomass power producers so that their plants can run economically. CERC has also approved values for critical parameters and recommended for annual revision of fuel price based on independent survey.

The Ministry has taken up some of the critical issues affecting the biomass power sector for their early resolution. The Workshop was organized by the Ministry to provide a platform for all the related stakeholders to get together, discuss and deliberate, and utilize the collective knowledge in addressing the concerns of the sector and to remove the barriers faced by the biomass sector to provide it the much required and necessary impetus.

The workshop was attended by the Chairpersons and Members of CERC, SERC’s, as well as senior officials of State Energy Departments, State Nodal Agencies, and Distribution Companies from more than 15 states across the country. In addition, officials from UNDP, Financial Institutions, Indian Biomass Power Association and Biomass Project Developers also participated in the event.

The deliberations mostly focussed around the changes required at the state level, in the regulatory and financial regime in order to provide an impetus to the biomass power sector. Lessons were drawn from states like Punjab, Haryana and Rajasthan where investment-friendly policies have helped the sector grow.

The workshop was organized under the Biomass Power Project, jointly funded by MNRE and UNDP/GEF. A lot of the problems and challenges that were discussed in the workshop were drawn from the experience gathered in implementation of the said project which aims to accelerate the adoption of environmentally sustainable biomass power technologies by removing the barriers identified, thereby laying the foundation for the large scale commercialization of biomass power through increased access to financing.


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