Ministry of Power is revolutionising the energy industry with biomass

By encouraging the adoption of biomass co-firing, the government is promoting the efficient utilisation of resources.

In a significant move towards promoting sustainable energy practices and reducing reliance on fossil fuels, the Ministry of Power (MoP) has announced the implementation of price benchmarking for biomass pellets used in co-firing at Thermal Power Plants (TPPs). The decision comes in response to evolving market conditions and extensive feedback from stakeholders, including thermal power plants, pellet manufacturers, farmers, and bankers.

The benchmarked price will be determined by considering various factors such as business viability, impact on electricity tariffs, and the efficient and rapid procurement of pellets by power utilities. This step aims to establish a sustainable supply mechanism for co-firing biomass pellets, benefiting both TPPs and pellet vendors. The finalised benchmarked price, as determined by the committee under the Central Electricity Authority (CEA), will come into effect on January 1, 2024.

While the committee’s recommendations are being implemented, power utilities will resort to short-term tenders to fulfil their immediate biomass pellet requirements for TPPs. This interim measure will ensure a smooth transition until the price benchmarking system is fully operational.

The co-firing biomass in coal-based power plants is a crucial government policy aimed at enhancing energy security, reducing reliance on fossil fuels, and increasing farmers’ income. The revised policy on price benchmarking is expected to expedite the achievement of these goals.

According to Alok Kumar, Secretary of Power, this decision will incentivise farmers, entrepreneurs, and thermal power utilities to contribute towards establishing a sustainable biomass ecosystem. It will also aid in meeting co-firing targets, curbing stubble burning, and ultimately creating a cleaner and greener future for the citizens of India.

Additionally, as part of the modified policy, it has been stipulated that torrefied biomass pellets, which are currently limited in availability, should only be procured by utilities when technically unavoidable. Utilities that can use non-torrefied pellets are encouraged to prioritise their utilisation.

To date, approximately 1.80 Lakh metric tons(MT) of biomass fuel has been co-fired in 47 thermal power plants across the country, with a total capacity of 64,350 MW, in line with the Biomass policy mandating co-firing with coal. Moreover, during the first two months of the fiscal year 2023-24, more than 50,000 MT has been co-fired, surpassing the previous highest annual quantity. Currently, around 1,140 Lakh MT of biomass pellets is in various stages of the tendering process, with thermal power plants having already placed purchase orders for approximately 69 Lakh MT. With the support of enabling policies and the MoP’s SAMARTH mission, significant growth in biomass co-firing in TPPs across the country is anticipated. The decision to implement price benchmarking for biomass pellets marks a pivotal step towards achieving sustainable energy practices, reducing carbon emissions, and creating a cleaner future for India. By encouraging the adoption of biomass co-firing, the government is promoting the efficient utilisation of resources, providing additional income for farmers, and addressing environmental concerns. With a focus on renewable energy, India is poised to become a global leader in sustainable power generation.