Government
of India
Ministry
of Non-Conventional Energy Sources
(Power
Group)
*********
Block
No. 14, C.G.O. Complex,
Lodi
Road, New Delhi-110 003.
Dated
: 21.07.2003
To
1.
Chief
Secretaries of State Governments
2.
Heads
of State Nodal Departments/ Agencies/ Implementing
Agencies
3.
Heads
of Financial Institutions
4.
Chairmen
of State Electricity Boards / Transcos/ Gencos
Sub:- Biomass Energy and Co-generation
Programmes – Administrative Approval for the year 2003-04 –
regarding.
Sir,
I
am directed to convey the sanction of the Government of India to the
implementation of Biomass Energy and Co-generation Programmes during the year
2003-04 incorporating the following Programmes:-
I.
Biomass Power/Co-generation Programme.
II.
Biomass Gasifier Programme.
2.
The Schemes provides for Central Financial Assistance (CFA) in the form
of Grants-in-Aid and Subsidies in respect of the following activities under the
Programmes:
i)
Biomass Resource Assessment
ii) Research and
Development
iii)
Technology Development and Commercialisation
iv) Village Electrification
v)
Commercial Projects
vi)
Promotional Activities
3.
Objectives
i)
To assess the biomass resource potential and develop Biomass Resource
Atlas for India
ii)
To support Research and Development, Applied R&D and development of
technologies for various end-use applications
iii)
To
support Demonstration and Field trials with a view to promote commercial
development
iv) To
intensify electrification of remote villages through biomass based
technologies
v)
To promote commercial grid-connected projects including captive power
generation
vi) To
expand local manufacturing capacity and service facilities
4.
Biomass Power / Cogeneration – Programme
Components
The
biomass power/cogeneration programme will be implemented with the following
components:
4.1 Biomass
Resource Assessment:
Taluka
level biomass resource assessment studies were undertaken during the
9th Plan covering 500 talukas. District level biomass assessment
studies have been taken up in the 10th Plan in 12 potential States,
following such district level studies undertaken in 3 States during the
9th Plan. The inputs from the taluka level and district level studies
will be utilized in preparing a Biomass Resource Atlas for India. District level studies in six States
have already been initiated and studies in the remaining six States will be
undertaken during the current year.
Support will be continued for the project on preparation of Biomass
Resource Atlas for India.
Grants-in-Aid
of upto Rs. 1.00 lakh per district will be provided for the district level
studies on lump sum basis to the implementing technical institutions /
consultancy organizations towards cost for manpower, travel, documentation,
institutional overheads, etc.
An initial release of upto 50% will be made, with the balance to be
released, linked with progress.
4.2 Research
and Development:
Biomass
power generation based on woody biomass and crop residues has made considerable
progress in India, based mainly on direct combustion, atmospheric pressure
gasification and cogeneration technologies. It is proposed to support research
and development projects to upgrade the existing technologies, improve capacity
utilization, and develop more efficient and cost-effective new technology
routes. Grants-in-Aid will continue
to be provided during the year depending on the progress of the R&D projects
on Strategic Development of Bioenergy which entails development of various
technology packages for industrial applications and power generation, and
Advanced Biomass Gasification which aims at development of high pressure
gasifiers to be coupled with gas turbine engines.
4.3
Commercial Projects:
Commercial projects based on forestry and crop residues, energy
plantations, and forestry / agro industrial residues will be based on different
technology configurations for power generation and cogeneration of capacity 1MW
and above, captive and /or grid connected will be provided Central Financial
Assistance in the form of interest subsidy or capital subsidy depending upon the
type of project. CFA for commercial
projects taken up by promoters, developers and entrepreneurs will be routed
through financial institutions, nationalized banks, industrial development /
investment corporations, State / public sector Financing and Leasing
Corporations. Fossil
fuel upto 25% will be allowed in biomass power and bagasse cogeneration projects
as support fuel to achieve extended operating days in a year.
Release
of Interest Subsidy to the Financial Institutions will be made, on pro-rata
basis, linked with sum total of disbursal of loans, as certified by the FI(s).
In case of more than one Financial Institution providing term loan to a project,
the application should preferably be made by the Lead Financial Institution.
Application for claiming financial incentives of the projects should be made
within one year of the date of achieving financial closure for full term
loan. In case of more than one FI,
the date of loan agreement for the last component of the term loan will be
considered for eligibility.
Application for interest subsidy should be made through the concerned FI
in the prescribed formats given in Parts A, B & C of Annexure-I.
4.3.1 Bagasse Cogeneration
Projects
Optimum
bagasse cogeneration projects have started to pick up in private sector sugar
mills. The thrust of the programme
will be to accelerate development of projects in cooperative, public and joint
sector sugar mills. CFA in the form
of interest subsidy will be provided for bagasse cogeneration project on the
following pattern.
|
S.
No. |
Bagasse
Co-generation |
Pressure Configuration |
Interest Subsidy
|
|
1. |
Projects by
Cooperative/Public/ Joint Sector Sugar Mills |
40 bar
& above |
3% |
|
60 bar
& above |
4% | ||
|
80 bar
& above |
5% | ||
|
100
bar& above |
6% | ||
|
2. |
Projects in IPP Mode in
Cooperative/Public / Joint Sector Sugar Mills
|
60 bar
& above |
2% |
|
80 bar
& above |
3% | ||
|
100
bar& above |
4% | ||
|
3. |
Projects by
Private Sector Sugar Mills |
60 bar
& above |
1% |
|
80 bar
& above |
2% | ||
|
100
bar& above |
3% |
For
projects by cooperative/ public sector/ joint sector sugar mills in the first
category, the floor rate of interest shall not be lower than 6%. For projects under the other two
categories, a floor rate interest of 8% shall apply. The maximum amount of capitalized
interest subsidy to a bagasse cogeneration project shall be limited to Rs.4.00
Crore.
4.3.2 Biomass Power Projects
Grid
connected biomass power projects based on direct
combustion have started to pick up in several potential States. While it is
intended to continue support to these projects, it is proposed to encourage
biomass cogeneration projects and grid connected projects based on atmospheric
pressure gasification technologies.
Biomass power projects for captive power generation are also proposed to
be encouraged. Interest
subsidy is proposed to be provided for the above categories of projects. In addition, it is proposed to support a
limited number of projects during the 10th Plan based on MW scale
100% producer gas engine technologies and advanced biomass gasification
technologies i.e. the three different technology routes of Biomass Integrated
Gasification-cum-Gas Turbine Combined Cycle (IGCC); Integrated Pyrolysis
Combined Cycle (IPCC); and MW-scale
reciprocating engines with very high diesel replacement exceeding 90%. Capital
subsidy is proposed to be provided for such projects. A total of five projects with not more
than two projects in a State based on MW scale 100% producer gas engine, and a
total of three projects, with not more than one project in a State, based on
each of the three ABG technology routes, will be supported during the
10th Plan.
|
S. No. |
Biomass
Power |
Pressure Configuration |
Interest
Subsidy |
|
1. |
Direct
combustion, cogeneration, including captive power projects
|
60 bar
& above |
2% |
|
80 bar
& above |
3% | ||
|
2. |
Atmospheric
gasification, including captive power projects |
-- |
2% |
|
3. |
Projects
with MW-Scale 100% Producer Gas Engines |
Capital
Subsidy of Rs.1.00 Cr./MW | |
|
4. |
Advanced
biomass gasification projects |
Capital Subsidy of Rs.1.00
Cr./MW | |
An
additional interest subsidy @ 2% will be provided with floor rate of interest
not lower than 6% for Biomass Power/ Co-generation Projects in all Special
Category States, and Islands (excluding those Islands which are Union
Territories). The floor rate of
interest for other categories of projects shall not be lower than 8%. The maximum amount of capitalized interest
subsidy for any biomass power project shall be limited to Rs. 2.00 Crore. A total capacity not exceeding 100 MW
shall be supported in any State during the 10th Plan. The capital subsidy to projects based on
MW scale 100% producer gas engines shall not exceed Rs. 2.00 Crore per project,
and to advanced biomass gasification projects shall not exceed Rs. 8.00 Crore
per project.
Interest
subsidy will be released as per the terms specified in Para
4.3
above.
Capital
subsidy for the advanced biomass gasification projects will be released through
the concerned financial institution on reimbursement basis after completion of
the project and submission of project completion report and cost / financial
details, and after satisfactory operation and supply of stipulated grid power
for a period of three months, as certified by the concerned State Electricity
Board. In the case of projects of MW scale 100 % producer gas engines, capital
subsidy will be released through the concerned financial institution on
reimbursement basis after completion of the project and submission of project
completion report and cost / financial details, and after 1000 hrs of successful
operation, as certified by a designated entity.
4.3.3 Industrial
Cogeneration
Industrial
co-generation in the core industry sector has an estimated potential of about
10,000 MW surplus power generation in industries such as textiles, steel,
cement, paper, food processing, petro-chemicals etc. These projects can effectively meet the
industry’s requirement of power and steam, and surplus power can be sold to
State Electricity Boards.
CFA
will be provided as per Para 4.4.1 below for organizing Business /
Interaction Meets, Seminars, Workshops, Training Programmes with a view to
create awareness about industrial cogeneration.
4.4. Promotional
Activities:
The
following promotional activities will be supported under the programme:-
·
Business
/ Interaction Meets, Seminars, Workshops, Training Programmes
·
Professional
Technical Services
·
Involvement
of State Nodal Agencies
4.4.1 Business / Interaction
Meets, Seminars, Workshops, Training Programmes
CFA
will be provided to SNAs, Industry Associations, Consultancy Organizations,
Sugar Federations etc. upto a maximum of Rs.3.00 lakh per event, depending on
the duration of the event and other specifics. An initial release of upto
50% with the balance to be released
after completion of the activity and submission of necessary documentations.
4.4.2 Professional Technical
Services
CFA
will be provided on reimbursement basis after submission of necessary
documentation to consultancy firms helping to bring a project to financial
closure (upto loan agreement letter), including preparation of the Detailed
Project Report @ Rs.1.00 lakh per MW, subject to a maximum of Rs. 5.00 lakh per
project.
4.4.3 Involvement of State Nodal
Agencies
CFA
will be provided to SNAs for their active involvement in promoting biomass power
/ cogeneration projects @ of Rs. 50,000 per MW, subject to a maximum of Rs. 5.00
lakh per project. An initial
release of 50% will be made on
submission of documentation about financial closure (upto loan agreement), with
the balance to be released on completion of the project and submission of
necessary documentations.
5.
Biomass Gasifier – Programme Components
The
biomass gasifier programme will be implemented with the following components:
5.1 Biomass
Gasifiers for thermal and electrical applications
The deployment of small scale gasifiers, particularly upto 100 KW
capacity has so far been demonstrated for a variety of end-use applications.
During the 10th Plan, greater emphasis is being given to gasifiers of
higher unit sizes to operate on diversity of biomass feed material, and for
specific segments of industrial applications and on captive power
generation. Central Financial
Assistance in the form of capital subsidy is proposed to be continued during
2003-04 on biomass gasifiers for thermal and electrical applications, as per the
following pattern:-
|
Type
of Application |
Capital
Subsidy |
|
i)
Thermal Applications including cooking (upto 3
MWth), ii)
Electrical application, including pumping and captive power, with
provision for surplus power to grid (upto 1
Mwe). |
*i)
Rs. 1.25 lakh / 300 KWth
for thermal applications on pro-rata basis, or in multiples
thereof *ii)
Rs.1.50 lakh/100 KWe for electrical applications, including
pumping and captive power on pro-rata basis, or in multiples thereof
preferably with provision of surplus power to grid
|
CFA
will be provided on satisfactory completion of project on reimbursement basis
through State Nodal Agencies. Certification of completion of the project to be
provided through a Joint Commissioning Report (JCR) as per Format `A’ in
Annexure-II by the State Nodal Agency, Manufacturer and beneficiaries / user
Organization alongwith documents providing necessary technical and audited
financial documents.
5.2 Biomass
Gasifier based village electrification
During
the year 2003-04, village electrification through biomass gasifier will be
intensified. An average size of 50
KW has been taken for these projects with unit size of 25 KW capacity, modular
upto 100 KW, and a special rating of 10 KW. For cluster
of villages, 100 KW size, modular upto 1 MW, is proposed. Implementation will be carried out
through SNA with the involvement of ESCOs, Co-operatives, Panchayats, NGOs,
manufacturers or entrepreneurs.
CFA
in the form of capital subsidy to the extent 60% of the cost of Rs.15 lakh for
the basic package of a 50 KW project covering biomass gasifier system, housing
and local distribution, will be provided, with the balance to be met by State
Agency, Panchayat, beneficiaries, etc. For all Special Category States, and
Islands (excluding those that are Union Territories), higher capital subsidy of
90% will be provided, with the balance to be met by State Agency, Panchayat,
beneficiaries, etc.
Provision of additional
Rs.1.50 lakh per 50 kW plant has been made in order to ensure regular
availability of biomass, provision for collection, processing and storage and
operation and maintenance including AMC for 5 years after the guarantee
period. In addition, for internal
wiring, beneficiary will be provided micro-credit facility for three points
@Rs.1500/- per household.
The
CFA for the sanctioned projects will be released to the State Nodal Deptts. /
SNAs in the following manner :-
·
Initial
release of 20% of the total MNES cost share would be made alongwith the sanction
letter of the project.
·
Second
instalment of 50% of MNES cost share would be released on supply of equipment at
site.
·
Third
instalment of 30% of MNES cost share would be released on erection and
commissioning and after three months / 1000 hours of trouble-free operation of
the whole system and submission of Audited SOE & UC by the implementing
agency.
5.3
Demonstration of 100% producer gas engines coupled with gasifiers for
power production
The
gasifier / gas engine configuration will eliminate the role of fossil fuels i.e.
diesel etc. in the generation of electricity so as to make it more economically
viable. Conversion of dual-fuel
engines to 100% producer gas engines below megawatt-level has also been achieved
indigenously. The programme for demonstration units of 100% producer gas engines
will be continued to encourage and create confidence about the performance of
the engines developed indigenously or imported. 100 projects are to be taken up during
the first two years of the 10th Plan.
Demonstration
of indigenously developed and produced or imported 100% producer gas engines
will be taken up in power generation projects upto 1 MW capacity. CFA of Rs.15 lakh per 100 kW on pro-rata
basis, or in multiples thereof, will be provided on the gas engine and biomass
gasifier system. CFA of Rs.10 lakh
per 100 KW on pro-rata basis, or in multiples thereof, will be provided for
projects involving gas engine alone.
Balance cost to be met by SNAs, User Agencies, Panchayats, Entrepreneurs,
NGOs, etc. For all Special Category States, and Islands (excluding those that
are Union Territories), additional 20% CFA will be provided. For village electrification projects
while CFA for the basic package will be provided as above, other associated CFA
will be provided in addition as per Para 5.2 above The Scheme will be
implemented through State Nodal Agencies.
Terms of release of CFA will be as given in Para 5.2
above.
5.4 Conversion
of existing power plants in all Special Category States, and Islands to biomass
gasifier based power stations.
On account of rapid
escalation in the diesel prices, the cost of generation from the existing diesel
power plants in the Special Category States and Islands has gone up
significantly. The programme aims
at conversion of existing D.G. sets to dual-fuel mode of operation in
conjunction with biomass gasifiers in all Special Category States, and
Islands. This will reduce the
dependence on diesel for power generation in such remote areas. A total CFA of
Rs.10.00 lakh per 100 KW project for the gasifier system and for conversion of
the D.G. set to dual-fuel mode of operation will be provided, on pro-rata basis,
or in multiples thereof. The Scheme
be implemented through State Power Depatments / SNAs.
Terms of release of CFA will be as given in Para 5.2
above.
5.5
Promotional
Activities
5.5.1 Detailed Project Reports are
necessary for all projects above 100 KWe or 300 KWth
capacity. CFA for DPR preparation
for projects between above, 100 KWe upto 500 kWe or 300
KWth to 1500 kWth is Rs. 0.50 lakh, whereas for projects
above, 500 kWe and upto 1MWe and 1500 KWth and upto 3
MWth is Rs. 1.00 lakh.
For projects upto 100 kWe or 300 KWth capacity, basic
information is to be provided, as per Formats
`B’
and `C’ of
Annexure-II,
for which no CFA will be provided.
5.5.2 One-time funding upto Rs.5.00
lakhs shall be provided to gasifier manufacturers/suppliers for establishing
service centers in areas where cluster of systems, minimum 10, have been set
up.
5.5.3
CFA of
upto a ceiling of Rs.20.00 lakh will be provided for applied R&D, pilot
projects, technology validation projects, strategic studies on scientific,
technical, engineering, economic aspects, industry-wise sectoral studies,
performance monitoring and evaluation, etc., The proposals will be considered by
an Expert Committee headed by the concerned Advisor in the
Ministry.
5.5.4 CFA of upto Rs.3 lakh per
event will be provided for organization of Business Meets, Seminars, Workshops,
orientation programmes, training programmes, etc. depending upon the specifics
of each proposal.
5.5.5 CFA of Rs.10,000 per 100
kWe project, upto a maximum of Rs.1 lakh for 1 MWe project
for power generation, and Rs.5,000 per 300 kWth project for thermal applications
on pro-rata basis, upto a maximum of Rs.50,000/- for promotion of Biomass
Gasification Technology, shall be provided as service / implementation charges
to State Nodal Agencies.
6.
Monitoring
i)
The
State Nodal Agencies / implementing agencies will set up effective monitoring
mechanism / Committee(s), associating the Regional Offices of MNES and other
State agencies to closely review the implementation of the projects under the
programme. Monitoring through an
independent agency, as and when required by MNES, is also proposed under the
programme.
ii)
The
State Deptts./ Agencies will send progress reports in respect of completed
projects and also under construction, on a quarterly
basis.
iii)
The implementing agencies will closely monitor the performance of each
project and will submit reports on a half-yearly basis at least for 3 years
after commissioning of each system to the respective State Govt. Dept./Agency,
who will forward a consolidated Summary Report to the
Ministry.
7.
The general terms and conditions for both the programmes are given in
Annexure-III. The aforesaid Biomass Energy and Co-generation Programmes
are subject to such change(s) and modification(s) as may be decided by the MNES,
Government of India from time to time, and subject to availability of
funds. The Ministry shall in no way
be liable for expenditure incurred by Promoters for pre-project preparation or
other activities, merely on the basis of this Circular and/or related
announcements made by the Ministry.
In case of any dispute on interpretation of any provision under the
Schemes, the decision of the Ministry shall be final and
binding.
8.
All the State Government Agencies/Departments are requested to initiate
the action for implementation of Bio-mass Energy & Co-generation Programmes
during the year 2003-2004 as per the Scheme. Firmed up project proposals under both
the programmes may be formulated alongwith DPR, as stipulated in the Scheme, and
as per prescribed format contained in the Scheme Circular, wherever
necessary.
Yours
faithfully,
(Dr.
J. R. Meshram)
Director
Encl
:
As
above
(BIOMASS
POWER/CO-GENERATION PROJECTS)
[
TO BE FILLED IN BY PROMOTER & FORWARDED THROUGH LEAD
FI]
1.
GENERAL
(i)
Name, Address, Phone, Fax
&
:
Email
of the Promoter.
(ii)
Name
and designation of
:
authorised
signatory
(iii)
Constitution (whether Co-operative/
:
Private
Sector/Public Ltd/
joint sector/Public Sector Company etc.)
(iv) Location of
the Project
:
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