BIO Mass Powe Programme

Biomass Power/Cogeneration Programme

Biomass Resource Atlas Financial Incentives Fiscal Incentives

The Biomass power/cogeneration programme is implemented with the main objective of promoting technologies for optimum use of country’s biomass resources for grid and off grid power generation. Biomass materials successfully used for power generation include bagasse, rice husk, straw, cotton stalk, coconut shells, soya husk, de-oiled cakes, coffee waste, jute wastes, groundnut shells, saw dust etc. The technologies being promoted include combustion/ cogeneration and gasification either for power in captive or grid connected modes or for heat applications.

Ø POTENTIAL

The current availability of biomass in India is estimated at about 500 millions metric tones per year. Studies sponsored by the Ministry has estimated surplus biomass availability at about 120 – 150 million metric tones per annum covering agricultural and forestry residues corresponding to a potential of about 16,000 MW. This apart, about 5,000 MW additional power could be generated through bagasse based cogeneration in the country’s 550 Sugar mills, if these sugar mills were to adopt technically and economically optimal levels of cogeneration for extracting power from the bagasse produced by them.

TECHNOLOGY

Ø COMBUSTION

The thermo chemical processes for conversion of biomass to useful products involve combustion, gasification or pyrolysis. The most commonly used route is combustion. The advantage is that the technology used is similar to that of a thermal plant based on coal, except for the boiler. The cycle used is the conventional ranking cycle with biomass being burnt in high pressure boiler to generate steam and operating a turbine with generated steam. The net power cycle efficiencies that can be achieved are about 23-25%. The exhaust of the steam turbine can either be fully condensed to produce power, or used partly or fully for another useful heating activity. The latter mode is called cogeneration. In India, cogeneration route finds application mainly in industries.

Ø GASIFICATION

Instead of combustion, it is possible to convert the biomass into producer gas by gasification (partial combustion). Thermo-chemical gasification involves burning the biomass with insufficient air so that complete combustion doesn’t occur, but a gaseous product is obtained. The producer gas is a mixture of carbon monoxide and hydrogen. Gasifiers are classified as updraft or downdraft depending on the direction of flow of the biomass and producer gas. India has significant experience in atmospheric gasifiers.

Ø COGENERATION IN SUGAR MILLS

6 MW Biomass Power project, Andhra Pradesh

Sugar industry has been traditionally practicing cogeneration by using bagasse as a fuel. With the advancement in the technology for generation and utilization of steam at high temperature and pressure, sugar industry can produce electricity and steam for their own requirements. It can also produce significant surplus electricity for sale to the grid using same quantity of bagasse. For example, if steam generation temperature/pressure is raised from 400^oC/33 bar to 485^oC/66 bar, more than 80 KWh of additional electricity can be produced for each ton of cane crushed. The sale of surplus power generated through optimum cogeneration would help a sugar mill to improve its viability, apart from adding to the power generation capacity of the country.

Ø DEPLOYMENT

The Ministry has been implementing biomass power /co-generation programme since mid nineties. A total of 167 biomass power and cogeneration projects aggregating to 1252 MW capacity have been installed in the country for feeding power to the grid. In addition, around 171 biomass power and cogeneration projects aggregating to 1850 MW of electricity are under various stages of implementation. Cogeneration projects in sugar mills includes 82 projects with installed capacity aggregating to 690 MW. Another 107 projects are under implementation aggregating to 1280 MW. States which have taken leadership position in implementation of cogeneration projects are Andhra Pradesh, Tamil Nadu, Karnataka and Uttar Pradesh, The leading States for biomass power projects are Andhra Pradesh, Karnataka, Chattisgarh, Maharashtra and Tamil Nadu.

Ø MANUFACTURING BASE

Manufacturing capability exists in the country for the equipment/machinery required for setting up Biomass Projects. Except for some critical control equipment, and high efficiency turbines, most of the equipments can be procured from indigenous sources.

Boilers

A number of large manufacturers have established capabilities for manufacturing spreader stoker fired, traveling grate/dumping grate boilers; atmospheric pressure fluidized bed boilers and circulating fluidized bed boilers.

Due to recent upsurge of interest in co-generation for surplus power, leading manufacturers are further upgrading their capabilities for high efficiency boilers.

Steam Turbines

Almost all combinations – condensing, single extraction/double extraction condensing, back pressure, etc. are now being offered in the country with full after sales services guarantees. The efficiencies of turbines now being offered are comparable to the best in the world.

Other Equipment

Apart from the main equipment, there is a well established capability and capacity for manufacture of related equipment for use of biomass for energy including harvesters, balers, briquetting equipment, handling and firing equipment, pollution control systems , etc. Many multinational companies have set up manufacturing facilities in the country for such equipment.

Ø PROMOTIONAL POLICIES

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 on equipments. 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 wind power and bagasse cogeneration projects.

State	Participation	Wheeling	Banking	Buy Back	Third Party Sale	Other Incentives
A.P.**	Pvt.	28.4% + Rs.0.5/kwh	Allowed at 2% for 8-12 months	Rs.2.63 per unit, (05-06) @1% for 5 years	Not Allowed	--
Chattishgarh **	Pvt.	6%	Not allowed	Rs.2.67 (04-05) Rs.2.71 (05-06)	Allowed	As to other industry; Electricity Duty Exempted for 1^st five year
Gujarat**	Pvt.	4% of energy	Allowed 12 months	Rs.3.00/unit, No escalation	Allowed	--
Haryana ** (RPS-3%-07-08)	Pvt.	2% of energy	Allowed	BM -Rs.4.00/unit, BC-3.74/unit 2% escalation (base year07-08)	Allowed	--
Karnataka**	Pvt.	5% surcharge Rs.1.13/unit	Allowed at 2% charge on monthly basis	Rs.2.74 per unit, (cogeneration) @Rs.2.88 per unit(04-05) 1% on base year 10 yrs. (Biomass)	--	Subsidy @ Rs.25 lakhs/MW for co-gen. only
Kerala	Pvt.	5% of energy	Allowed 4 months	Rs.2.80 per unit, escalated at 5% for five years (2000-01)	Not allowed	50% cost of power evacuation line to be borne by KSEB.
Maharashtra**	Pvt./Coop.	7% of energy	Allowed	Rs.3.05 per unit (Comm yr.) (Cogen) @ Rs.3.04 - 3.43 (13 yrs. ) @1% (biomass)	Allowed	50% cost of power evacuation line to be borne by MSEB.
M.P **	Pvt.	Yet to be decided	Allowed	Rs.3.33 to 5.14 paise for 20 yrs. With escl of 3- 8paise	Allowed	--
Punjab	Pvt.	2% of energy	Allowed 12 months	Rs.3.01 per unit, escalated at 3% for 5 years (01-02), Rs.3.48 (maximum)	Allowed	As to other industry
Rajasthan**	Pvt.	10% of energy	Allowed 12 months	Rs.3.60 per unit, (07-08)-water cooled and Rs.3.96- air cooled	Allowed	--
Tamil Nadu	Pvt.	2% - 10%	Allowed at 2% charge	Rs.2.73 per unit,*** escalated at 5% for 9 Years (2000-01)	Not Allowed	--
U.P **	Pvt.	12.5%*	Allowed 24 months	Rs.2.86 per unit, for existing and 2.98 for new with escalated at 4 paise/year	Allowed*	--

* Not allowed for Co-generation

** Policy announced by SERC in respective States.

Note: For details and upto date information concerned SERCs/State Govts website may be consulted.

	Special Category States (NE Region, Sikkim, J&K, HP & Uttaranchal)	Other States
Biomass Based projects
Biomass Power projects	Rs 25 lakh X (C MW)^0.646	Rs 20 lakh X (C MW)^0.646
Bagasse Co-generation	Rs 18 lakh X (C MW)^0.646	Rs 15 lakh X (C MW)^0.646
Bagasse Co-generation projects by cooperative/ public/joint sector 40 bar & above 60 bar & above 80 bar & above	Rs. 40 lakh * Rs. 50 lakh Rs. 60 lakh Per MW (maximum support Rs. 8.0 crore per project)	Rs. 40 lakh * Rs. 50 lakh Rs. 60 lakh Per MW (maximum support Rs. 8.0 crore per project)
Biomass Power using Advanced Technologies	Rs. 1.2 crore X (C MW)^0.646	Rs. 1.0 crore X (C MW)^0.646

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 Duty	Concessional customs and excise duty exemption for machinery and components for initial setting up of projects.
General Sales Tax	Exemption is available in certain States

STATE-WISE/YEAR-WISE LIST OF COMMISSIONED BIOMASS POWER / CO-GENERATION PROJECTS (AS ON 30.09.2007)
(In MW)

S.No.	State	upto 31.03.2002	2002-03	2003-04	2004-05	2005-06	2006-07	2007-08	Total
1	Andhra Pradesh	101.20	58.85	37.70	69.50	12.00	22.00	33.00	334.25
2	Chattisgarh	11.00	--	--	--	16.50	85.80	17.50	130.80
3	Gujarat	0.50	--	--	--	--	--	--	0.50

Biomass Based Project
Biomass Power (combustion)	:	· Minimum 62 bar steam pressure · Maximum of upto 15% use of fossil fuel of total energy consumption in K.cals or as per DPR, whichever is less. · For only new boilers and turbines (capacity limited to in accordance with the estimated potential in a state)
Co-generation	:	· Minimum 40 bar steam pressure · Maximum of upto 15% use of fossil fuel of total energy consumption in K. cals. or as per DPR, whichever is less, during crushing season.
Biomass power with advanced technology	: