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  • Good morning gentlemen. I am Uma Rama Linga Murthy Marthi, Asst Manager Renewable Energy Division, Zenith Energy Services Pvt Ltd. I welcome you on behalf of Zenith team to the presentation on Evaluation study of programmes on grid connected biomass power, bagasse cogeneration, non-bagasse cogeneration in Industries initiated by Ministry of New and Renewable Energy and awarded to Zenith Energy Services Pvt Ltd.
  • The broad road map to the presentation consists of introduction and importance of the ongoing study, introduction and present scenario of existing Central Schemes or CFA Programmes, Grid connected biomass power generation, bagasse cogeneration and non-bagasse cogeneration, their sector wise growth, evaluation of the existing power plants, the barriers and constraints the existing plants are facing, recommendations to overcome the identified barriers and constraints. Additional to that a case study has been presented for bagasse cogeneration power projects along with interventions that needed to be analyzed
  • Honorable Ministry of New and Renewable Energy has been implementing programs for grid connected biomass power, bagasse cogeneration and non-bagasse cogeneration since past two decades. These efforts realized substantial power generation augmentation for bagasse cogeneration projects in private sector, but failed to realize substantial potential in biomass power generation, bagasse cogeneration in cooperative sugar mills and non-bagasse cogeneration power plants. In order to encourage the biomass power generation, bagasse cogeneration in cooperative sector sugar mills and non-bagasse cogeneration, MNRE had introduced a specific policy for biomass power and bagasse cogeneration in cooperative sugar mills in the year 2006 and updated the same policy in the year 2010. A separate policy had been implemented for non-bagasse cogeneration and is extended till date.
  • New targets were set for the implementation of grid-connected biomass power and bagasse cogeneration in the 11 th Five Year Plan and the set targets were over achieved by over 100% in biomass power generation and by over 50% in bagasse cogeneration based power projects. 100 projects of 300 MW potential power plants were augmented for non-bagasse cogeneration projects. Though there was credible capacity addition in terms of target achievement, the total capacity achieved is very low when compared to the total available potential throughout India. In this context, in order to achieve substantial potential of power generation from biomass in the country, MNRE is proposing a separate biomass road map for the 12 th Five Year Plan (2012--17), for which the current study is proposed for studying the performance of existing power plants that utilized the current policies and suitable interventions were sought. MNRE thus has awarded an assignment to Zenith Energy Services Private Limited (ZESPL) to evaluate the performance of the projects and the CFA scheme and suggest any modifications required for improving the impact of the CFA scheme for next 12 th Five Year Plan 2012-17.
  • Correspondingly, the objective of this study stands as: “ to evaluate the performance of the projects installed under the Central Financial Assistance(CFA) scheme and assess the suitability of various provisions in the existing scheme and to suggest changes required, if any. ”
  • The scope of work of this evaluation study aims to Assess the impact and effectiveness of above scheme in view of its progress and performance of the projects and to recommend whether to continue the scheme after 11 th Plan. Identify specific bottlenecks in financing for cooperative sugar mills and optimum levels of support needed and also identify barriers, constraints, if any with reference to IPP biomass power/ bagasse cogeneration projects and non bagasse cogeneration in Industries. Assess the impact of BOOT/ BOLT Model scheme for cogeneration projects in cooperative sector sugar mills Indicate the cost-benefit analysis of these systems and indicate whether intended objective is accomplished. Assess whether amount and pattern of financial support being provided needs to be revised. Assess the implementing procedure of the scheme and indicate if there is a need for modification. Suggest suitable policy intervention for accelerated development and promotion of bagasse cogeneration in cooperative sector sugar mills. Suggest any other modification in the scheme
  • Keeping in mind the scope of the study, the kick-off meeting of the project was held at MNRE office with Dr J R Meshram, Director and with Mr A K Dhussa, Director, where the sampling framework, questionnaire finalization and methodology of conducting the study was finalized. At the outset a total of 69 stakeholders were interviewed across the three selected sectors and 10 sample states.
  • A complete spread of stakeholders across different states and different sectors is presnted in the table above. Where
  • Generation of power exclusively through rankine cycle based combustion of biomass is known as biomass power generation The term biomass indicates “biological material derived from living or recently living organisms” Agro-based Industrial Residue, wood produced in Energy plantations or recovered from wild bushes / weeds, wood waste produced in industrial operations; Crop / Agro Residues Biomass has a distinctive advantage over other renewable energy technologies like wind, solar and hydel in terms of costs, despatchability, and decentralisability with PLF reaching over 100% It is estimated that the power potential that could be derived from biomass sector is 17,000 MW 5% of land use for biomass generation increases the biomass power potetial to 32,000 MW
  • Chattisgarh leads in installed capacity of 29% with 239 MW installed capacity, while the total installed capacity across india is 1082 MW while the total installed capacity across sample states selected for study is 825 MW
  • From each of the six selected states, two biomass power plants are identified for detailed study, on mutual consultation with MNRE officials. On a whole, sixteen (16) biomass power plant promoters are visited / interviewed. Apart from promoters, another seven (07) stakeholders pertaining to Financial Institutions, experts in the industry and state level organizations are interviewed for their experiences, comments, and suggestions in identifying and overcoming barriers and constraints, those biomass power plants are facing right now. Out of the sixteen biomass power plants visited, two (2) are working at 100% PLF, nine (9) of them are working over a PLF range of 70 to 80%, three (3) power plants are working in a PLF range of 30 to 50%, and two (2) of them are in shutdown state.
  • Till 2005-06, there were not many issues regarding the biomass procurement, but as on date, this is one of the biggest challenges the industry is facing. As most of the biomass is freely available in the agriculture based country like India, the sources of biomass availability are not authenticated, sometimes farmers from in and around the power plant directly procures the biomass and sells the same at the biomass power plant at very low costs. Another way of procurement of biomass is through depots or ‘mandis’ or biomass collection centres as appointed by IPPs for collection of biomass. Universal Biomass Power Plant in Punjab has thirty two (32) such biomass collection centres across Muktesar district and certain regions in Rajasthan. Another way through which biomass is procured is through biomass agents who buy biomass from farmers, store it for months together, and sell it to the IPPs at a higher cost. It is thus very common that, on a certain day, IPPs have biomass way below the market prices, while some other day the same IPP has to purchase the biomass at double the cost.
  • On studying different parameters as discussed above the biomass barriers and constraints are identified.
  • On studying different parameters as discussed above the biomass barriers and constraints are identified.
  • Transcript

    • 2. OUTLINE OF THEPRESENTATION Introduction Central Schemes or CFA Programmes Grid-connected Biomass Power Generation Bagasse Cogeneration Non-bagasse Cogeneration Recommendations to CFA Programmes Conclusion
    • 3. INTRODUCTION† Ministry of New and Renewable Energy – Programs on Grid Connected Biomass Power, Bagasse cogeneration and Non- bagasse Cogeneration Projects from last 13 years† The promotional programmes aimed at augmenting technological awareness and upgradation in these sectors† New policy for biomass power and bagasse cogeneration is formulated in 2006 December and updated in 2010† The policy mainly concentrated on biomass power and bagasse cogeneration in cooperative sugar mills† Separate program had been announced for non-bagasse cogeneration in Industries since 2006† Couldnt achieve better results in biomass power generation and non-bagasse cogeneration
    • 4. …..As on 31st June 2011, the installed capacity that availed CFAof grid connected biomass power, bagasse cogeneration andtheir respective growth
    • 5. CONTINUED….. The total installed capacity of biomass (21%, 1082.6 MW), bagasse cogeneration (70%, 3613 MW) and non-bagasse cogeneration (9%, 444 MW)Although the growth ofbiomass power andbagasse cogenerationover reached their targetof by 100% and 50%respectively, on anoverall view the installedcapacity is very low
    • 6. OBJECTIVE OF THESTUDYThe objective of the study is to evaluate the performance ofthe projects installed under the Central FinancialAssistance(CFA) scheme and assess the suitability ofvarious provisions in the existing scheme and to suggestchanges required, if any.
    • 7. SCOPE OF WORK Impact of existing scheme and recommendations whether to continue this scheme Identifying barriers and constraints for three sectors Bottlenecks in financing cooperative sugar mills Impact and cost benefit analysis of BOOT/BOLT Model schemes for bagasse cogeneration in cooperative sugar mills Suitable interventions for accelerated development and promotion of cooperative sector based bagasse cogeneration Amount, pattern, implementation procedure, financial assistance needs any modification or revision Any other modification in the scheme
    • 8. APPROACH ANDMETHODOLOGY Kick-off meeting was held on 21st October 2011 in MNRE Office  Methodology of conducting the study was presented, discussed and finalized  Sampling framework finalized for biomass, bagasse and non-bagasse cogeneration,  Questionnaires prepared were vetted by the officials The study conducted was broadly based on the interviews conducted with different stakeholdersSl. No. Type of stakeholder No. of stakeholders visited1 Biomass Power Producers 162 Financial Institutions/ Experts/ State Level 07 Organizations3 Bagasse Cogeneration Power Plant Promoters 104 Financial Institutions/ Experts/ State Level 14 Organizations5 Non-bagasse Cogeneration Power Plants Promoters 09 and experts6 State Nodal Agencies, Utilities 15 Total no. of stakeholders interviewed 69
    • 9. State-wise Survey Status of Grid-connected Biomass, Bagasse and Non-Bagasse Cogeneration Power Plants in IndustriesSl. No. States SNA Utiliti Biomass Bagasse Non-bagasse s es Promoters Expe Organizatio F Promote Organizatio F Is* Promoters Experts rts ns Is* rs ns 1 Chhattisgarh 1 1 3 - 1 - - - - - - 2 Karnataka 1 - 2 - - - 3 2 - - - 3 Maharashtra 1 1 3 - - - 3 5 - - - 4 Tamil Nadu 1 1 2 - 1 - 2 2 - - - 5 West Bengal 1 - - - - - - - - - 1 6 Haryana 1 1 - - - - - - - 2 - 7 Punjab 1 - 3 - - - - - - 2 - 8 Rajasthan 1 - 2 - 1 - - - - - - 9 Utter Pradesh 1 1 - - - - 2 - - 4 - 10 Andhra 1 - - - - - - - - - - Pradesh 11 - - 1 - - - - - - - - 12 - - - 1 - 3 - 2 3 - - Stakeholders 10 5 16 1 3 3 10 11 3 8 1 Total Number of Stakeholders 69
    • 10. PROGRAMS National Programme on Biomass Power and Bagasse CogenerationNational Programme on Biomass Power and Bagasse Cogeneration – 12 demonstration projects Guidance to states in purchasing power from biomass and bagasse projects – awareness campaigns, capacity building activities and promotional activities carried out Interest subsidies were provided for biomass power, bagasse cogeneration and other gasification technologies 1993 – 2001 New initiatives were made for Industrial cogeneration and megawatt scale gasification plants, along with other financial incentives Cogeneration plants were given subsidy on the basis of pressure configuration of boilers used.
    • 11. CONTINUED……. December 2006 – total program bifurcated into two components i. Biomass power / bagasse cogeneration ii. Biomass gasification and non-bagasse cogeneration Capital subsidy introduced instead of interest subsidy cooperative/ public/ joint sector sugar mills, 50% of the subsidy amount is released to the financial Institutions after sanction of the loan and the balance subsidy amount after successful commissioning 2010 -- MNRE –  Program on grid-connected biomass and bagasse cogeneration power plants  Program on Biomass (Non-bagasse) Cogeneration in Industries
    • 12. AND BAGASSE COGENERATION POWER PLANTS This scheme is an up-gradation of the scheme that started in the year 2006, especially encouraging efficient equipment in biomass and bagasse cogeneration power plants. Main objectives of the program are to promote: setting up of biomass power projects with minimum steam pressure configuration of 60 bar cogeneration projects from bagasse in cooperative / public sector sugar mills with minimum steam pressure configuration of 40 bar bagasse cogeneration projects for in cooperative / public sector sugar mills with minimum stream pressure of 60 bar and above, taken up through BOOT / BOLT model by IPPs / State Govt. Undertakings or State Government Joint Venture Company
    • 13. Central Financial Assistance for Biomass and Bagasse Cogeneration PowerProgram Plants Special Category States Other StatesBiomass Power Projects Rs. 25 lakh X (Capacity in MW) ^ 0.646 Rs. 20 lakh X (Capacity in MW) ^ 0.646Biomass Cogeneration Rs. 18 lakh X (Capacity in MW) ^ 0.646 Rs. 15 lakh X (Capacity in MW) ^ 0.646(private sugar mills)Bagasse Cogenerationprojects by Cooperative/ Rs. 40 lakh* Rs. 40 lakh*Public/ Joint Sector40 bar & above60 bar & above Rs. 50 lakh* Rs. 50 lakh*80 bar & above Rs. 60 lakh* Rs. 60 lakh* Per MW (maximum support Per MW (maximum support Rs. 8.0 crore per project) Rs. 8.0 crore per project) Fiscal Incentives for Biomass and Bagasse Cogeneration Power PlantsItem DescriptionAccelerated Depreciation 80 percent depreciation in the first year can be claimed for the following equipments required for cogeneration systems: (i) Back pressure, pass out, controlled extraction, extraction cum condensing turbine for cogeneration with pressure boilers (ii) Vapour absorption refrigeration systems (iii) Organic rankine cycle power systems (iv) Low inlet pressure steam inlet systemsIncome Tax Holidays 10 years income tax holidayCustoms Duty Concessional customs and excise duty exemption for machinery and components for initial setting up of the projectsGeneral Sales Tax Exemption is available in certain states
    • 14. PROGRAM ON BIOMASS (NON-BAGASSE) COGENERATION IN INDUSTRIES  A common program encouraged biomass cogeneration from 1993 through 2005 along with biomass gasification programs  The growth of biomass cogeneration had been negligible over this period of time. In order to encourage the biomass cogeneration in different industries, MNRE launched a program on 25th July 2005, known as “Programme on Biomass Energy and Co-generation (non-bagasse) in Industry for implementation in 2005-06”  Subsequently the same program has been followed till 2010 and a new scheme with special emphasis on non-bagasse cogeneration in Industries has been introduced
    • 15. CONTINUED….. Objectives of the program are:• To encourage the deployment of biomass cogeneration (non-bagasse) systems in industry for meeting thermal and electrical energy requirements.• To promote decentralized/ distributed power generation through supply of surplus power to the grid.• To conserve use of fossil fuels for captive requirements in industry• To bring about reduction in greenhouse gas emissions in industry• To create awareness about the potential and benefits of alternative modes of energy generation in industry
    • 16. CONTINUED….. Scope of the program• Biomass cogeneration for captive use – at least 50% of power for captive use• Other promotional activities -- potential / resource assessment, preparation of DPRs, organization of seminars / workshops / conferences, interactive / business meets, awareness creation activities, and other professional technical services Central Financial Assistance (CFA)• Capital subsidy for Biomass Cogeneration (non-bagasse) projects -- Capital subsidy @ Rs.20.00 Lakhs / MWe would be provided to promoters• CFA for organizing promotional program -- CFA up to Rs.3.00 lakh / event• CFA up to Rs. 5.00 lakhs, on case by case basis for validation studies etc.,
    • 18. BIOMASS POWER GENERATION It is estimated that the power potential that could be derived from biomass sector is 17,000 MW 5% of land use for biomass generation increases the biomass power potential to 32,000 MW
    • 19. INSTALLED CAPACITY Total Installed Capacity is 1082 MW (Ason 31st December 2011)The states selected for field survey(Punjab, Maharashtra, Karnataka,Chattisgarh, Tamil Nadu, and Rajasthan)constitute for 76% of the total biomasspower across India with a installedcapacity of 825 MW Biomass Power Plants Distribution (December 2011) State Installed Capacity Chhattisgarh 239.9 Punjab 50.5 Rajasthan 83.3 Maharashtra 162.5 Tamil Nadu 201.7 Karnataka 87.5 Others 257 Total Capacity 1082
    • 20. FIELD SURVEY OF BIOMASS POWER PLANTS Biomass power plants interviewed / visited across the six states for field study Sl. No. State Name of the power plant visited Capacity (MW) 1 Malwa Power Plant 8.0 2 Punjab Universal Biomass Power Plant 14.5 3 Dee Developers Pvt Ltd 8.0 4 Sri Surya Chambal Power Ltd. 7.5 Rajasthan 5 Kalpataru Power Transmission Pvt Ltd 8.0 6 Eco-fren Power & Projects Pvt. Ltd., 8.0 7 Chattisgarh Sudha Agro Industries Pvt Ltd, Bilaspur. 9.99 8 South Asian Agro Industries Pvt Ltd 10 9 Sri Indra Power Energies Ltd, 6.0 Karnataka 10 Ravi Kiran Power Project Pvt Ltd. 7.5. 11 Sriram Non Conventional Energy Ltd, 7.5 Tamil Nadu 12 MPPL Renewable Energies Pvt Ltd 10 13 A A Energy Limited 10 14 Rake Power Ltd 10 Maharashtra Indu-bharat Energies Maharashtra 15 20 Limited 16 Gujarat Amreli Power Projects 9.99
    • 21. CONTINUED……… Other Stakeholders Interviewed Financial Institutions Sl. Name of the Institution/ No. City Organization 1 3rd Floor, August Kranti Bhawan, – 110 066. Tel: +91 IREDA 11 26717400 – 26717413 2 Power Finance Corporation Ltd. Urjanidhi, 1, Power Financial Corporation – PFC New Delhi. 3 Asian Development Bank (ADB) Plot 4, San Martin Marg, Chanakyapuri State Level Organizations 1 Rajasthan Biomass Power Producers Jaipur Office: C-30, , C Scheme, Jaipur. Association 2 Plot No 30, Opposite Bank of ,Road No 1, Film Nagar, Biomass Developers Association Jublee Hills, . 3 Chhattisgarh Biomass Energy C-33, Third Floor, Ashoka Millennium,. Ring Road Developers Association No.1, Rajendera Nagar Chowk, 4 IPPAI New Delhi 5 Indian Biomass Power Developers New Delhi Association Experts 1 Dr G C Dutta Roy Dalkia Energy Services Ltd
    • 22. WORKING STATUS OF BIOMASS POWER PLANTS• Out of 825.4 MW surveyed, 260 MW (32%)power plants are in poor operating conditionor are operating at lower PLF ranges of below25% or in a shut down state• There are around 350 MW of registeredbiomass power projects which are stuck dueto lack of finance in the state of Rajasthanand 15 projects of 150 MW are going throughthe same condition in the state ofChhattisgarh
    • 23. EVALUATION OF BIOMASS POWER PLANTS The evaluation of biomass power plants is categorized into the following:  Biomass as a fuel  Operations and Maintenance  Power Purchase Agreement and Tariff Rates Biomass power plants are surveyed for biomass related evaluation and for operations and maintenance issues While respective SERCs are approached and latest petitions filed by different biomass players are analyzed for biomass power tariffs and power purchase agreement related issues
    • 24. EVALUATION/ ANALYSIS OF FUEL RELATED ISSUES The biomass related problems are evaluated on two parameters, namely:  Assessment, procurement, storage and competition for biomass as fuel  Price of biomass The sources of biomass availability are:  Farmers  Agents  Biomass Collection Canters from IPP Sources of fuel are not authenticated and the fuel is stored by the agents for a price rise Procurement and storage losses from biomass storage are around 5% Competition – Increasing competition from other sectors like brick kilns, cement plants, thermal power plants, oil mills, and rice mills making biomass unviable for power production alone Price of the biomass fluctuates very highly from Rs.1,500 / ton during season to Rs. 3,000 / ton during off season of crops Rise of fuel prices, assessment, procurement, storage practices are assessed directly by visiting the biomass power plants
    • 25. OPERATIONS AND MAINTENANCEStation Heat Rate (SHR) and Gross Calorific Value (GCV) Station Heat Rate (SHR) is the measure of amount of energy in terms of kCal required to generate one unit i.e., kWh of electricity It is the product of GCV of the biomass to the specific fuel consumption of the power plant SHR and GCV plays a vital role in understanding the health of a biomass power plant SHR is observed and studied from different petitions from different SERCs Skilled manpower procurement and retention is another problem faced by the biomass power producers There are no skilled workers in the area and as the number of power plants are increasing the need for skilled manpower is increasing day-by-day leading to lower retention rates at different biomass power plants
    • 26. PPAS AND TARIFFS PPAs are being made for about 10 to 13 years with respective DISCOMS Tariff rates are determined by the SERCs and the same are revised from time to time Prevailing tariff rates and the payment related issues with respective SERCs are discussed with the promoters. The major parameters taken into consideration are: Tariff rate determination problems are collected from both SERCs and the IPPs and other stakeholders introduced Problems pertaining to the delayed payments from the DICOMS Tripping of the power lines
    • 27. EXISTING STATE LEVEL POLICIES FOR BIOMASS POWER GENERATION State of Rajasthan has special policy for biomass power generation The major and important aspects of the policy are:  Reservation of Area for Biomass Power Plants  Policy for plantations Sl. No. Capacity (MW) Area Reserved (Radius in km) 1 5 60 2 5 - 7.5 75 3 7.5 – 10 80 4 10 – 12.5 85 5 12.5 – 15 90 6 15 – 20 100 Promotion of development of Prosopis-Juliflora / other energy plantation on Government land for use as supplementary fuel in Biomass Power Plants
    • 28. BARRIERS AND CONSTRAINTS The major barriers and constraints that were identified are:  Technical barriers  Institutional / regulatory barriers  Financial barriers  Technical Barriers  Lack of quality biomass assessment study  Lack of standardized methodologies and guidance  Biomass assessment a low cost service  Inadequate fuel collection, distribution and supply mechanism  Competition for biomass and price rise  Availability, training and retention of skilled manpower  Lack of standardized SHR and GCV rates
    • 29. CONTINUED……… Institutional / Regulatory barriers and constraints  Power Purchase Agreement (PPA)  Lack of short term PPAs with Biomass Power Plants  Tariff related issues  Lack of standard biomass price assessment mechanism for determination of the biomass tariffs  Zoning of the region  Irregular zoning practices and self violating policies  Sizing of the power plant  Improper sizing of the power plant leading to competition for the same amount of biomass available Financial barriers and constraints  Lack of interest from financing institutions  Delayed bill payments by more than six months
    • 30. RECOMMENDATIONS FOR OVERCOMING BARRIERS IDENTIFIED Inline with the above barriers identified, recommendations are made, they are:  Technical aspects  Institutional and regulatory aspects  Financial Aspects  Technical Aspects  Biomass Assessment  Establishment of standards and single format reporting for biomass surplus across the country  Triangulation of data  Through secondary sources – local agricultural departments  Through strong and robust ground level study  Through data from a satellite regarding the biomass availability  Biomass procurement  Efficient fuel collection mechanism through licensed depots and briquetting units  Backed up by the exact biomass assessment reports, traders of biomass should be licensed and regulated sale and purchase of biomass should be ensured.
    • 31. CONTINUED……………  Storage of biomass  Encouragement of briquetting units that would reduce the space required for biomass storage by making biomass briquettes  Competition and pricing  Biomass prices should be monitored meticulously and that coupled with ascertained tariff revisions would ensure smooth increase in the biomass assessment  the supply mechanism should be molded into a shape from the existing raw form, depending upon which the future biomass capacity addition should be assessed accurately  Sizing of the project  Restriction on the size of the project should be put so as to achieve the fullest potential Institutional and regulatory aspects  Power Purchase Agreement and Tariff Revision  When the SERCs delay in paying power bills there should be PPA exit strategy for biomass power plants  Short term PPAs should be encouraged for biomass power plants  Tariffs should be revised periodically depending upon the annual reports from biomass assessment studies
    • 32. CONTINUED……….. Plantation backed biomass power plants should be encouraged by Generation Based Incentives (GBIs)  No biomass power plants should be licensed without plantation backup in the states like Chhattisgarh and Rajasthan  Efficient Land allocation mechanism should be made for the biomass Financial Aspects  Efficient bill payments should be ensured from the SERCs to their respective clients  Proper biomass potential assessment practices should be established so as to identify and invest in the right area CFA Related Recommendations a central policy should be made regarding the biomass channel management as fuel for biomass power plants  It is noted that the impact of Central Financial Assistance is very less or negligible and needs a turnaround towards becoming a comprehensive policy ensuring standardized biomass assessment, channel management, which would be determining the future course of biomass power plant industry in India
    • 34.  Cogeneration is defined as the coincident generation of useful thermal energy and electrical power from the same fuel input The sugar manufacturing process requires a large quantum of thermal energy in the form of steam and also the bulk of steam required for processing is needed at the low pressure Conservative estimates suggest a potential of over 5,000 MW from cogeneration plants in India The total installed capacity of bagasse plants in India as on 30th July 2011 is 3613 MW
    • 35. HISTORY OF THE BAGASSE COGENERATION PROJECTS Before 1970s, steam generation pressures / temperatures were low, boiler / turbine efficiencies were low, steam requirements for process were high and hence the mills were neither self sufficient in their steam requirements, nor in electricity Over the years, more efficient equipment was adopted and by 1990s, mills started to not only become self sufficient in steam and electricity, but they even had some surplus bagasse Ever since 1993 – 94, MNRE has been the vanguard of its promotion Over the last two and a half decades, biomass power has become an industry, attracting annual investments of over Rs. 1,000 crore, generating more than 700 Crore units of electricity and creates employment opportunities of more than 10 million man days, all in rural areas
    • 36. TECHNOLOGICAL EVOLUTION Technological evolution of bagasse cogeneration Period Mill Steam Electricity Bagasse Electrical Boiler Specific Capacity Pressure/ Generation Self Self Efficiency Steam (TCD) Temp. (MW) Sufficiency Sufficiency Consu- (Bar/oC) (MW) mption 1970 <1000 11/200 0.5 -15% -0.5 <50% 20 1980 >1250 21/380 1.5 -5% -0.8 <55% 15 1990 2500 45/440 3.5 5% 0 60% 8 2000 5000 64/485 22-24 – 18 >70% <5.8 2004 >5000 84/510 25-30 – 25 – – 2007 >5000 105/525 ~35 – ~30 – – 2011 >7000 110/525 ~36 18% ~33 80% 1.5 Power Generation and steam generation from power Steam Cycle Steam Production Power Generation Bagasse Required ( Bar / OC ) ( Tons ) ( kW ) ( Ton / MWh ) 21/340 2.50 227.3 4.5 32/380 2.43 286 3.5 42/400 2.40 313 3.2 45/440 2.33 328 3.0 67/480 2.27 378 2.6 87/510 2.24 401 2.5 110/535 2.21 427 2.3
    • 37. PROJECTSo The total installed capacity ofbagasse cogeneration powerplants in India is 3613.25 MWo Out of 3613 MW installed, the totalcapacity that availed subsidy is1802 MW
    • 38. BUSINESS MODELS EVOLVED IN INDIA The success of bagasse cogeneration is not only dependent on the choice of technology, but also on the soundness of the business model that ensure steady revenue stream This revenue stream helps sugar mills to overcome inherent fluctuations in the sugar market so much so that some sugar mills consider themselves to be in the business of producing electricity in which sugar is being considered only as a by-product by them Various investment models evolved are:  Own Investment Model  IPP-BOOT Model  Joint Venture (JV) Model  SPV Model  Joint Venture / IPP Cooperative Mill Models
    • 39. EXISTING SCHEMES ON BAGASSE COGENERATION POWER PLANTS Maharashtra –  Tariff of Rs. 3.05 / kWh and 2% compound escalation  Launch of “Urjankur Trust” scheme As per this scheme, the Cogeneration power plants can avail of financial assistance as under:  Own Investment: 10%  Loan from Financial Institutions: 60%  Assistance from Sugar Development Fund (SDF): 30%  Other FIs supporting bagasse cogeneration are:  IREDA  SDF  NCDC  HUDCO
    • 40. FIELD SURVEY OF BAGASSE COGENERATIONPLANTSCategorization of Stakeholders InterviewedSl. No. Type of Stakeholder No. 1 Bagasse cogeneration power plant promoters interviewed 10 2 Financial Institutions/ experts/ state level organizations interviewed 14 Total Number of Bagasse Cogeneration Power Plant Stakeholders 24 List of Bagasse Cogeneration Power Plants Visited Capacity Sl No State Name of the Power Plant Visited (MW) 1 Kranti SSK 11 2 Maharashtra Datta SSK 36 3 Someshwar SSK 18 4 Indian Cane Power Ltd 28 5 Karnataka Hiranyakshi SSK 26 6 Renuka Sugars 38 7 Dhampur Sugar Mills 30 Uttar Pradesh 8 Mawana Sugar Mill. 20 9 Kothari Sugars & Chemicals Ltd 11 Tamil Nadu 10 Shakti Sugars Ltd 35
    • 41. List of other Stakeholders Interviewed Financial InstitutionsSl No Name of the Financial Institutions Corporate Office 1 National Cooperative Development Cooperation (NCDC) New Delhi 2 NFCSF New Delhi 3 IFCI Ltd – SDF New Delhi State & Central Associations 1 The South Indian Sugar Mills Association Banglore 2 Indian Sugar Mills Association New Delhi 3 Sugar Technologies Association of New Delhi 4 The Federation of Co-op. Sugar Mills Ltd Chandigarh 5 The Federation of Co-op. Sugar Factories Ltd. Banglore 6 Co-operative Sugar Factory Federation Mumbai 7 Commissioner of Sugar () Pune 8 Cogeneration Association of (COGEN ) Pune 9 The Sugar Factories Association Mumbai 10 The Bombay Sugar Merchants Association Ltd. Navi Mumbai 11 Tamilnadu Co-op. Sugar Factories Federation Ltd. (TNCSF) Chennai
    • 42. TECHNICAL AND FINANCIAL EVALUATION Technical parameters involved in study are:  Boiler and turbine specifications  Specific Consumption of Fuel  Fuel Linkages  Seasonal utilization of bagasse available  Off seasonal Fuel Linkages  Generation based details  Generation during season and off season Financial parameters involved in study are  Funding pattern of the project  Financial business model adopted  Financial performance of the project by financial parameters like  IRR  Payback period  DSCR
    • 43. IDENTIFIED The major barriers and constraints that were identified are:  Technical barriers  Institutional / regulatory barriers  Financial barriers Technical Barriers  Limited capacity of sugar mills  Lack of trained man power  Biomass / Bagasse pricing  Institutional/ Regulatory Barriers  Institutional and political nature of cooperative mills  Long gestation period  High management risks  Irregularities in tariff / payment defaults  Financial Barriers  Lack of financial strength of the sugar mills  Limited access to funds and difficulties in raising equity
    • 45. ADVANTAGES OF THE BOOT/ BOLT MODEL  All the risks are borne by developer who brings fund raising capabilities and project skills  Monetary benefits to sugar mill in addition to power and steam supply without any equity participation  Sugar mill could be incentivized for improved operational efficiency  No difficulty in raising small size of capital  Faster project implementation
    • 46. COST BENEFIT ANALYSIS OF BAGASSE COGENERATION Details of the project developer and the host sugar factory Name of the developer of the project Shri Renuka Energy Limited Address Havelock Road, Cantonement, Belgaum Deshbhakta Ratnappanna Kumbhar Name of the Host Sugar Factory Panchaganga Sahakari Sakhar Karkhana A/P Ganganagar, Hatkanangle, Address Kolhapur, Maharashtra Power Generation details of Bagasse Cogeneration Power Plant Generation Details Seasonal Off Seasonal Operation of Cogeneration Plant days 180 Days 75 Days Capabilities of cogeneration plant i) Power Generation 106105 kW 39789 kW ii) Captive power 40653 Kw 37 kW iii) Net Exportable power 65452 kW 35810 kW iv) Exportable power 65.45 MU* 35.81 MU* v) Total power exported 101.26 MU*
    • 47. CONTINUED…… Details of Total Project Cost Rs. In MillionSl. No. Description Amount 1 Civil works 74.50 2 Mechanical equipments 603.30 3 Electrical Equipment 126.80 4 Sugar Plant Modifications 59.50 5 Taxes and Duties – 18% 155.54 6 Transportation of Equipment – 3% 23.69 Total plant & machinery 1,043.33 7 Consultancy, and project management 20.87 8 Contingency @10% 106.42 9 Interest during construction 29.27 Total Project Cost 1,199.88
    • 48. .. Revenue for the project and other details  Revenue is generated at the rate of Rs. 3.05/ unit with an escalation of 2% per annum Vital Financials of the Project Rs. In Million Sl. No. Criteria Amount 1 Revenue generated per annum 198 2 Cost incurred over the project 1,199 Cost incurred over the project for 3 12 the first year 4 IRR of the project 12 – 16 % 5 DSCR of the project 1.75 -- 2.5 % 6 Payback Period of the Project 6 – 8 Years
    • 49. RECOMMENDATIONS FOR BAGASSECOGENERATION PROJECTS In accordance with the above evaluation and barriers identified the recommendations are variegated as:  Technological aspects  Institutional aspects  Financial aspects  Technological aspects  Awareness on Technology Up-gradation  Training programs to ensure more manpower  Bagasse / biomass pricing  Institutional aspects  Conducting awareness programs  Financial aspects  Extending SDF funding  Timely payment of bills by SEBs  PPA - Provision to exit from PPA with SEB
    • 50. POLICY INTERVENTIONS FOR DEVELOPMENT OFCOGENERATION IN COOPERATIVE SUGAR MILLS Revision on CFA for bagasse industries  For private power plant, the existing CFA should be continued  Cooperative sugar mills the CFA should be increased at least up to 5% Awareness generation  MNRE may seriously consider supporting conduction of awareness raising events, information dissemination campaigns regarding technologies, potential for cogeneration, benefits of cogeneration (profitability, environmental & social, etc), Continuation of the scheme  Existing scheme for cooperative sugar mills should be continued in future Encouragement of biomass plantations  Reduction of off seasonal coal usage  Plantation based services should be encouraged and Model Projects should be asked for
    • 52. INTRODUCTION Non-bagasse cogeneration has been gaining ground in Indian biomass power production scenario gradually and most of the times this phenomenon has not been observed and recorded Most of the industries that generate steam for industrial processes are using biomass as fuel, at least partially on the basis of availability of biomass in their boilers
    • 53. GROWTH OF THE NON-BAGASSE COGENERATIONo The total installed capacityof non-bagasse cogenerationpower plants in India is444.23 MW as on 31stDecember 2011  The major state where non- bagasse cogeneration is prevalent is Uttar Pradesh, West Bengal, Punjab, Haryana, and Andhra Pradesh
    • 54. EVALUATION OF NON-BAGASSE COGENERATIONThe biomass (non-bagasse) cogenerationpower plants are evaluated on threemajor areas pertaining to the study; theyare:oTechnical evaluationo Financial evaluationo Institutional/ Regulatory/ Policy List of non-bagasse cogeneration power plants interviewed in the studySl. Capacity Major observations of the evaluation State NameNo. (MW) PLF >90% 1 Bharat Starch Industries Ltd 2.0 Haryana 2 Sainsons Paper Industries Ltd 3.0 Specific Fuel 2.5 to 4.3 kg / 3 Shreyans Industries 3.5 Consumption kWh 4 ABC Paper Ltd 10.0 Payback 5 – 8 years 5 Yash Papers Ltd 6.0 6 Uttar Lakshmi Cotton Mills 8.0 Cost / kWh of Rs. 2 – Rs. 3 7 Pradesh Rama Papers Ltd 6.0 power produced 8 Mohit Papers Pvt Ltd 4.5 IRR 12 – 16% 9 Verde Renewables Pvt. Ltd -
    • 55. BARRIERS AND CONSTRAINTS The major barriers and constraints that were identified are:  Technical barriers  Institutional / regulatory barriers  Financial barriers  Technical Barriers  Biomass assessment for accurate assumptions of biomass usage in Non- bagasse cogeneration Industry  A harbinger in understanding the utilization of biomass in a given area  Biomass procurement and prices  Lack of up-gradation of technology  Availability, training and retention of skilled manpower  Institutional / regulatory barriers  Lack of success stories  Lack of state level and industry wide awareness
    • 56. RECOMMENDATIONS FOR NON-BAGASSE COGENERATIONPROJECTS In accordance with the above evaluation and barriers identified the recommendations are variegated as:  Technological aspects  Institutional aspects  Financial aspects  Technological aspects  Efficient biomass assessment  Technical up-gradation  Institutional aspects  Revision on CFA for non-bagasse industries  Suitable awareness campaigns
    • 57. EVALUATION OF CFAPROGRAMSl. Topic Grid connected Biomass Bagasse Cogeneration Non-bagasse cogenerationNo. discussed Power Generation 1 Utilization of All the biomass plants availed The private sector bagasse Only half of the promoters availed fiscal the subsidy cogeneration power plants subsidy, which due to lack of subsidy utilized the subsidy awareness 2 Impact of • Very low impact because • Has very good impact on • Impact on the industry is CFA over CFA schemes concentrate the sector and the poor. Central scheme could the sector on technology upgradation, schemes taken up are not permeate the techno- while the major barrier for successful commercial barriers this sector is arising out of • Now the policy may associated with industry fuel pricing uncertainty concentrate on specific complexity of this cooperative sugar sector factories and low capacity bagasse cogeneration power plants 3 Barriers / CFA scheme is more being There are no major deviations CFA scheme is only catering for constraints lopsided towards technology in the design and technological upgradation rather in the upgradation implementation of scheme for than overall sector level scheme bagasse cogeneration industry assessment 4 Need for • Not needed for non- • Needed for bagasse • No revision of CFA scheme is revision of plantation based bagasse cogeneration power plants required the subsidy cogeneration projects backed up by the • Encouraged for plantation plantations backed biomass power plants
    • 58. RECOMMENDATIONS OF CFA PROGRAMMES Grid connectedSl. Topic Bagasse Non-bagasse Biomass PowerNo. discussed Cogeneration cogeneration Generation 1 Recommended • Standardizing the • Need for MIPs in • Sector specific, state measures for distribution and small capacity based specific and cluster increasing the collection mechanisms bagasse cogeneration specific studies should be effectiveness of biomass power power plants encouraged of the scheme plants • Awareness programs • Awareness programs • Encouraging biomass and technology up regarding the updated Plantations gradation oriented technologies should be • continuing the existing financial incentive encouraged scheme for schemes for bagasse technological up- cogeneration in gradation cooperative sugar • Controlled licenses of mills new power plants • Encouraging biomass • GBIs for plantation Plantations for off backed power plants seasonal fuel linkages • Existing scheme should be continued for the new power plants with careful biomass assessment studies