report on assessment of prevailing practices of · web viewagricultural biomass has been a...

Report on assessment of prevailing practices of treatment and disposal of waste agricultural biomass including overall assessment in the selected area.

OUTPUT II

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Outputs II of the SSFA

Report on assessment of prevailing practices of treatment and disposal of waste agricultural biomass including overall assessment

in the selected area.

“Waste Agricultural Biomass for Energy:

Resource Conservation and GHG Emission Reduction”


Contents

Chapter Subchapter Title Page1 Introduction 12 Crop Residue Management in some selected countries 13 Biomass Sector in India – Problems and Challenges 24 Reasons for the residues to be burnt in field: 4

Graph-4: Surplus of various crop residues in India 54.1 Adverse consequences of residue burning in field: 54.1.1 Loss of nutrient: 54.1.2 Impact on soil properties: 54.1.3 Emission of Greenhouse gases (GHGs): 54.1.4 Emission of other gases and aerosol: 64.2 Perceived advantage of residues on soil health and crop

yield:6

4.3 Impacts of residues on pest population: 75 A few basics about Biomass Power Generation 7

5.1 Power generation through renewable energy sources (Biomass and Co-generation)

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5.1.1 State-wise Estimated Power Potential from Surplus Agro-Residues in India-2010

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5.1.2 Residue-wise Biomass Data of the state of Uttar Pradesh: 96 Policies to promote biomass power in India 11

6.1 Current status 116.2 Biomass power and cogeneration programme 116.3 Incentives 126.4 Central Financial Assistance (CFA) and fiscal incentives 156.5 Fiscal Incentives for Biomass Power Generation 166.6 Biomass gasification plants in India 18

7 Conclusion: 20

Picture-3 Typical way of handling biomass in India

Table 2 Mode of crop residue management in other countriesTable 6.3 Summary of biomass power cogeneration tariff across states (As

on 31.03.2011) Table 6.4-a Financial assistance and categories of biomass power projectsTable-6.4-b CFA provisions for Bagasse Cogeneration Project in cooperative/

public sector sugar mills implemented by IPPs/State Government Undertakings or State Government Joint Venture Company / Special Purpose Vehicle (Urja Ankur Trust) through BOOT/BOLT model

Table 6.4-c CFA for Bagasse Cogeneration Project in existing cooperative sector sugar mills employing boiler modifications

Table 6.5 Fiscal Incentives for Biomass Power Generation Table 6.6-a Biomass gasification plants (installed)Table 6.6-b Installations for power generation through biomass and

cogeneration

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Graph-5.1.1 Power Generation Potential (MW)Graph 5.1.2 Power generation potential from individual surplus biomass in

Uttar Pradesh

Annexure-1 State-wise Estimated Power Potential from Surplus Agro-Residues in India-2010

Annexure-2 Residue-wise Biomass Data - State Uttar Pradesh; Year 2000-04; Season Kharif & Rabi

Annexure-3 Biomass power projects sanctioned and under various stages of construction

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1 IntroductionAgricultural biomass has been a common factor in all the countries across the globe, as agriculture has been the traditional to food items production, and the basic need for human survival. Almost all the countries in the past have been adopting a general practice of burning the agricultural biomass to clear the land for next season’s cultivation. The fact that till the early 70’s the world did not face critical shortage of basic forms of energy or even the electricity as a prime mover of growth. The scenario however changed in this period across the world and thee world started looking at renewable sources of energy as a solution to the ever increasing shortage of energy.

With the advent of development of alternative and renewable sources of energy, many initiatives were started by all the major developing and developed countries. The main stress has been on the development of Solar and Wind energy forms. In the same line, it was realised that the agricultural biomass can also be used as a basic form of energy and can be used for power generation and other energy needs.

Based upon many of such research and development studies, power plants based on agricultural biomass have been installed. Over a period of time, the installed capacities of such power plants has over shot the availability of such biomass, and most of the plants started facing shortage of such biomass. In the process of trying to find out more biomass, the various studies revealed that while there was in fact a shortage of the biomass in the vicinity of such power generation facilities, there in deed was enough biomass available elsewhere, though in a thinly distributed form. The economics of collecting and transporting such thinly distributed biomass did not favour it’s useful utilisation for the purpose.

From this stage, many studies were undertaken to assess the availability of useful biomass. It was observed that apart from leaving in the fields to rot, a considerable amount of biomass was being burnt, even in present times. A way to tackle this situation has been the continuous effort to be able to use it for useful purposes, primarily for energy generation.

2 Crop Residue Management in some selected countries:In some countries crop residues are used as a source of energy, animal feed, composting mushroom cultivation or even burnt in field. In China 37% of crop residues are directly combusted by farmers, 23% used for forage, 21% discarded or directly burnt in the field, 15% lost during collection, 4% for industry materials and 0.5% for biogas1 (Liu et al., 2008). Thus burning of crop residues in the field is a major problem in China as well.

Table-2 depicts various practices in some selected comparable countries.

With the introduction of the Short-Lived Climate Pollutants (SLPCs)2, even burning of biomass is receiving attention of the policy makers. Not only that the black carbon warms the 1 Final CRM document: www.nicra.iari.res.in/Data/FinalCRM.doc2 http://www.catf.us/climate/pollutants/

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atmosphere, but some emissions settle on snow, glaciers, and sea ice, darkening their surfaces3. This results in significantly reduced sun light reflectivity, thus causing it to absorb more solar energy and accelerating ice melt. The globally-averaged effect of this process is estimated at 0.1 W/m2, but in reality, this impact is concentrated at much higher rates in a few very climate-sensitive regions, including the Arctic and the Himalayas. Additionally, black carbon is a primary contributor to both indoor and outdoor air pollution, which together cause more than three million deaths annually.

Black carbon emissions are the result of incomplete combustion of biomass or fossil fuels. Closed combustion makes up 59 percent of emissions; open burning is responsible for the rest.3

Table 2: Mode of crop residue management in other countries4

Mode of Utilization Country

As a source of energy Indonesia , Nepal, Thailand, Malaysia, Philippines, Indonesia,

Nigeria

For composting Philippines, Israel, China

For animal feed Lebanon, Pakistan, Syria, Iraq, Israel, Tanzania, China, Africa

For mushroom

cultivation

Vietnam

For burning (As fuel) China, USA, Philippines, Indonesia

3 Biomass Sector in India – Problems and Challenges5

Effective year 2000, the biomass has found it’s place as one major fuel for power generation in the renewable energy sector. Picture-3 depicts a typical way of handling biomass (Rice husk) in a biomass power plant in India.

3 http://www.eesi.org/fact-sheet-short-lived-climate-pollutants-why-are-they-important-19-feb-2013: Environmental and Energy Study Institute:

4 Final CRM document: www.nicra.iari.res.in/Data/FinalCRM.doc5 http://www.greenworldinvestor.com/2011/03/10/indian-biomass-energy-reaches-1-gw-in-2010-list-of-biomass-energy-companies-ricesugargreen-utilities-growing-with-10-times-growth-in-next-10-yeaps/

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Picture-3: Typical way of handling biomass in India

Biomass Energy in India is growing at a fast pace due to the rapid advancements in Biomass

Energy Technology, Incentives for generating biomass electricity by the Indian government

and the huge requirements of power in India. A number of Agricultural Companies and

Green Utilities are focusing on setting up biomass plants in different places in India. Biomass

Energy accounts for almost 20-30% of the Energy Requirements of the country and is the

main source of energy for most of the rural communities for cooking and heating. The

location of the plant, the feedstock being used, the distance of the feedstock from the plant

and it’s management is extremely important for the success of a biomass based power plant.

The profit on a biomass power plant in India can vary widely depending on whether the

monsoon season is good or not. In a drought year, the lack of biomass makes running the

plants exorbitantly expensive, most of the times making it a loss making proposition.

India had set up around 500 MW of Biomass Capacity by 2007 and has increased it by almost

150 MW since then to reach around 1 GW capacity today. Most of India’s biomass electricity

is being generated in Andhra Pradesh, Maharashtra, Tamil Nadu, Karnataka and Rajasthan.

Considerable new capacity is being built in Punjab and Chattisgarh as well. India with a total

biomass capacity of around 1 GW is planning to increase it by 10 times to 10 GW by 2020.

Between 200-600 acres of land are required to support 1 Mw of Biomass Capacity .This is

much more than what is required for even thin film solar energy which is around 10 acres.

The large land requirements make biomass energy scaling a difficult proposition, however it

has a great prospect and chance of success in niche applications where a large amount of crop

and animal residue/waste is available captively.

Biomass Energy is clearly seeing a massive investment of private capital by a number of

green energy companies. A number of these companies are backed by private equity players.

Almost all Sugar Companies in the country co-generate biomass power at their sugar plants.

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http://i0.wp.com/www.bioenergyconsult.com/wp-content/uploads/2012/08/biomass_India.jpg


The size of the segment is quite large. In India 3 types of companies are focused on biomass

electricity – Sugar mills, Rice mills and green energy utilities. The first 2 categories will be

successful as their cost of feedstock does not vary by market dynamics and availability is

ensured, while the success of the third kind very highly depends on the management and

execution.

However, it is not the preferred renewable energy source till now, the primary reason being it’s supply chain. Biomass availability is not certain for whole year. Biomass from agriculture is available only after harvesting period which can stretch only for 2-3 months in a year. So there is a need to procure and then store required quantity of biomass within this stipulated time.

Some of the Indian leading states in establishing biomass-based power supply are Karnataka, Andhra Pradesh, and Maharashtra. Ironically, states having agricultural-based economy have not properly been able to utilize the opportunity and figure low on biomass energy utilization. Only Uttar Pradesh has utilized large part of the biomass potential in north Indian States and that is mainly due to the sugarcane industry and the co-generation power plants. Interestingly Punjab and Haryana don’t have much installed capacity in comparison to potential even though tariff rates are more than Rs. 5 per unit, which are higher than most of the states. This can be attributed to the fact that these tariffs were implemented very recently and it will take time to reflect the capacity utilization.

4 Reasons for the residues to be burnt in field:Increased mechanization, particularly use of combine harvesters, declining number of livestock, long period required for composting and no economically viable alternate use of residues are some of the reasons for residues being burnt in field. The number of combine harvester in the country, particularly in the Indo Gangetic Plains (IGP) has increased dramatically from nearly 2000 in 1986 to 10000 in 2010. Northwestern part (Punjab, Haryana and western Uttar Pradesh) of the IGP has about 75% of the cropped area under combine harvesting. Combine harvesters are used extensively in central and eastern Uttar Pradesh, Uttarakhand, Bihar, Rajasthan, Madhya Pradesh and southern states as well for harvesting rice and wheat. Graph-4.

The major reasons for increase in use of combine are labour shortage, high wage during harvesting season, ease of harvesting and thrashing and uncertainty of weather. With combine harvesting, however, about 80% of the residues are left in the field as loose straw that finally ends up being burnt. It is estimated that about 15 Mt rice straw is burned every year in Punjab alone.

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Graph-4: Surplus of various crop residues in India

Other reasons for intentional burning include clearing of fields, fertility enhancement, pest and pasture management. Burning traditionally provides a fast way to clear the agricultural field of residual biomass and facilitating further land preparation and planting. It also provides a fast way of controlling weeds, insects and diseases, both by eliminating them directly or by altering their natural habitat. The time gap between rice harvesting and wheat sowing in northwest India is 15-20 days.

4.1 Adverse consequences of residue burning in field:There are many disadvantages of burning the agricultural biomass in the open fields. A few of the major disadvantages are;

4.1.1 Loss of nutrient: In addition to loss of entire amount of C, 80% of N, 25% of P, 50% of S and 20% of K present in straw is lost due to burning, it also pollutes the atmosphere. If the crop residues are incorporated or retained, the soil will be enriched, particularly with organic carbon and nitrogen.

4.1.2 Impact on soil properties:Heat from burning residues elevates soil temperature causing death of bacterial and fungal populations. However, the death is temporary as the microbes regenerate after few days. Repeated burning in the field, however, permanently diminishes the microbial population. Burning immediately increases the exchangeable NH4

+-N and bicarbonate extractable P content but there is no build up of nutrients in the profile. Long-term burning reduces total N and C and potentially mineralized N in the 0-15 cm soil layer.

4.1.3 Emission of Greenhouse gases (GHGs):Burning of residues emits a significant amount GHGs. The gaseous emissions from burning of rice straw are 70%CO2, 7%CO, 0.66%CH4, and 2.09%N2O (Samra et al., 2003).6 Other sources for this information are IPCC and FAO.7

6 Effects of Residue Decomposition on Productivity and Soil Fertility in Rice–Wheat Rotation: Yadvinder-Singh, Bijay-Singh, J. K. Ladha,* C. S. Khind, T. S. Khera, and C. S. Bueno: www.researchgate.net/...RiceWheat.../9fcfd503b73c57a30c.pdf7 http://faostat3.fao.org/home/faostat-download-js/BurningCropResidues.pdf

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4.1.4 Emission of other gases and aerosol:Burning of agricultural residues, represent a significant source of chemically and radiatively important trace gases and aerosols such as CH4, CO, N2O, NOX and other hydrocarbons to the atmosphere affecting the atmospheric composition. It also emits large amount of particulates that are composed of wide variety of organic and inorganic species. One ton straw on burning releases 3 kg particulate matter, 60 kg CO, 1460 kg CO2, 199 kg ash and 2 kg SO2

8. This change in composition of the atmosphere may have a direct or indirect effect on the radiation balance. Besides other light hydrocarbons, volatile organic compounds (VOCs) and semi-volatile organic compounds (SVOCs) including polycyclic aromatic hydrocarbons (PAHs) and polychlorinated biphenyls (PCBs) and Sox, Nox are also emitted. These gases are important for their global impact and may lead to a regional increase in the levels of aerosols, acid deposition, increase in tropospheric ozone and depletion of the stratospheric ozone layer. They may subsequently undergo trans-boundary migration depending upon the wind speed/direction, reactions with oxidants like OH- leading to hysic-chemical transformation and wash out by precipitation. Many of the pollutants found in large quantities in biomass smoke are known or suspected carcinogens and could be a major cause of concern leading to various air borne/lung diseases.

4.2 Perceived advantage of residues on soil health and crop yield:The crop residues play an important role in amelioration of soil acidity through the release of hydroxyls especially during the decomposition of residues with higher C:N ratios, and soil alkalinity through application of residues from lower C:N ratio crops including legumes: oilseeds and pulses. The role of crop residues on carbon sequestration in the soil would be an added advantage in relation to climate change effects management.

Yield response with residue management varies with soil characteristics, climate, cropping patterns, and level of management skills. Greater yields with residue application results from increased infiltration and improved soil properties, increased soil organic matter and earthworm activity and improved soil structure in 4-7 years from when the system is established.

If one does not resort to burning the residues in the fields, leaving the crop residues in soil or retaining them on the surface, without burning, has several positive features which are as:

Enhances the physical, chemical and biological properties of soil. Increases hydraulic conductivity and reduce bulk density of soil by modifying soil

structure and aggregate stability. Mulching with plant residues raises the minimum soil temperature in winter due to

reduction in upward heat flux from soil and decreases soil temperature during summer due to shading effect.

Slows runoff by acting as tiny dams. Reduces surface crust formation and enhances infiltration. The channels (macro pores) created by earthworms and old plant roots, when left

intact with no-till, improve infiltration to help reduce or eliminate runoff.8 Fabrication and Performance analysis of Paddy Straw: www.ijera.com/papers/Vol2_issue3/FJ23946949.pdf

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Combined with reduced water evaporation from the top few inches of soil and with improved soil characteristics, higher level of soil moisture can contribute to higher crop yield in many cropping and climatic situations.

Residues act as reservoir for plant nutrients and prevent leaching of nutrients. Provide congenial environment for biological N fixation. Increase microbial biomass and enhance activities of enzymes such as dehydrogenase

and alkaline phosphatase. Increased microbial biomass can enhance nutrients availability in soil as well as act as

sink and source of plant nutrients. Leaving substantial amounts of crop residues evenly distributed over the soil surface

reduces wind and water erosion, increases water infiltration and moisture retention, and reduces surface sediment and water runoff.

4.3 Impacts of residues on pest population:The surface residues may ensure survival of a number of insects, both harmful and beneficial. Reduced tillage systems particularly under staggered planting system of crops in monoculture may contain comparatively high levels of pest inoculums than the conventional system. The cutting height of the crops at harvest may also influence the levels of pest inoculums. Further, the decomposition of residues along with several inter-related factors like climate, crop geometry, irrigation and fertilization, cultural practices and pesticides may affect the survival of insects in crop residues. The decomposition of residue brings out a chemical change in soil which may affect the host reaction to pests. The decomposition of plant residues may produce phytotoxic substances particularly during early stages of decomposition. The effects might be severe in reduced tillage systems which incorporate huge amount of residues into the soil and extra application of N is made to hasten decomposition of residues. A change in weed ecology is expected to influence the survival of several of those insects which tend to develop on weeds particularly during fallow period. Since the zero/reduced tillage system reduces the fallow period between crops, a change in sowing period of the following crop may result in altered incidence of certain insects.

5 A few basics about Biomass Power GenerationBiomass is organic material of comparatively recent origin that can be used as a source of energy. It generally includes crops and other plants, as well as agricultural, forest, sawdust and agro-industrial waste.9

Biomass power is referred as Electricity produced through utilizing biomass sources. Biomass replaces conventional fossil fuel in a boiler to produce steam, which in turn drives a turbine and then a generator that produces electricity. Excepting the use of biomass, the rest of the system is the same as in any conventional thermal power station.

Generating power through the use of biomass is a green initiative to provide electricity and/or thermal energy. Further, use of this resource helps become more energy independent and use

9 http://mnre.gov.in/file-manager/UserFiles/faq_biomass.htm

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of a locally derived fuel provides employment and direct economic benefit to local communities.

Electricity produced from biomass is considered to be carbon neutral and therefore helps to combat global warming. The CO2 that the facility will release would have anyway been produced as the plants and trees naturally decomposed in the forest without the benefit of electricity production.

Biomass power generating units produce a significant economic benefit to the area surrounding the plant. A typical biomass power project can create approximately employment for 100 workers during the 18-month construction phase, 25 full-time workers employed in the operation of the facility, and 35 persons in the collection, processing, and transportation of biomass material. If there are no issues in fuel collection, investors and fund, then it is possible to develop a project in a fast track mode in 18 months period.

There are several banks in India, including IREDA, which provide loans at reasonable interest rate. Although debt financing is the most common approach, there are several equity investors looking for good projects to invest.

If properly maintained, biomass power plants can run for around 20 years. It is possible to extend the lifetime by another 10 years by major rehabilitation.

Although there is a general impression that the biomass power projects are not feasible, with high oil price, increased competition among equipments suppliers, with CDM revenue, preferential tariff, Renewable Purchase Obligation (RPO) and Renewable Energy Certificates, biomass projects are an attractive investment option. However, there are still many barriers and risks in project development.

The MNRE, GOI, has been implementing a scheme for promotion of Grid Interactive Power Generation Projects based on Renewable Energy Sources, including biomass. In last 15 years, a cumulative capacity of 263310 MW has been commissioned, which comprises of 1636 MW Bagasse Cogeneration Projects and 997 MW of Biomass Combustion Projects. The leading states are Andhra Pradesh, Karnataka, Tamil Nadu, Chattishgarh, Maharashtra, Punjab and Rajasthan. The capacity of grid connected Biomass Power Project varies from 8-12 MW.

5.1 Power generation through renewable energy sources (Biomass and Co-generation)

5.1.1 State-wise Estimated Power Potential from Surplus Agro-Residues in India-2010Notwithstanding the above, the Government of India has instituted a study for assessing the potential for power generation through the surplus agricultural wastes. Graph-5.1.1 depicts a

10 MNRE Biomass FAQ: http://mnre.gov.in/file-manager/UserFiles/faq_biomass.htm

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bird’s eye view of the state wise potential for power generation through biomass in India. Detailed data is provided in Annexure-111.

Punjab

Mahara

shtra UP MP

Haryan

a

Gujarat

Karnata

ka

Tamil N

aduKera

la

Rajasth

anBihar AP

WBOris

sa CH AS HPJH

KJ&

KGoa UK

Manipur

Meghala

ya

Nagala

nd

Arunac

hal

Tripura

Sikkim

Mizoram

0

500

1000

1500

2000

2500

3000

3500

Power Generation Potential (MW)

Power Potential (MW)

Graph-5.1.1: Power Generation Potential (MW)

Here again, it can be seen that the state of Uttar Pradesh finds it’s place amongst the top three states.

5.1.2 Residue-wise Biomass Data of the state of Uttar Pradesh:12 The primary surplus biomass residues of the state of Uttar Pradesh are (i) Paddy Straw, (ii) Wheat Pod, (iii) Wheat Stalks, (iv) Paddy Husk, (v) Maize Stalks, (vi) Bajra Cobs, (vii) Maize Cobs, (viii) Bajra Stalks, (ix) Gram Stalks, (x) Bajra Husk, (xi) Arhar Stalks and (xii) Jowar Stalks. Annexure-2 provides the details of all the available surplus WAB in the state of Uttar Pradesh.

The above offer a scope for generation of about 1,600 MegaWatt of power.

Graph 5.1.2 depicts the potential of power generation by each of the available surplus biomass.

11 indiastat.new\htmData\10\527283.htm12 http://lab.cgpl.iisc.ernet.in/atlas/Tables/Tables.aspx

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0

100

200

300

400

500

600 Power generation potential of various biomass in Uttar Pradesh (MegaWatt)

Type of biomass

Pow

er g

ener

ation

pot

entia

l in

Meg

aWatt

Graph 5.1.2: Power generation potential from individual surplus biomass in Uttar Pradesh

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6 Policies to promote biomass power in India

6.1 Current statusDuring the past four decades, Government of India, through it’s earstwhile Department of Nonconventional Energy Sources (DNES), currently the Ministry of Renewable Energy (MNRE), has been supporting many projects for development of various renewable energy sources, such as use of waste biomass through the Biogas plants, biomass gasifiers and small and medium sized Biomass power plants. In addition, various other developments like (i) Technology for alcohol (ethanol) production from crop residues, (ii) Production of bio-diesel from non-edible oils and plants like Pongamia also have been developed.

However, considerable amounts of waste agricultural waste is still not utilised and is being wasted, primarily through burning in the fields or left to rot. A substantial amount of crop residues is burnt by the farmers after harvesting of main crop like wheat and paddy.The Ministry of New and Renewable Energy (MNRE) has initiated a detailed study and creation of national database on the available and surplus biomass. The project has been assigned to the esteemed Indian Institute of Science, Bangalore (IISc). However, due to the difficulties in collecting the huge amounts of data, the database is not being kept up to date, with a result that detailed data is available only till the period 2004.

Biomass power plants in India are based mostly on agricultural waste. Gasifier-based power plants are providing a great solution for off-grid decentralized power. While for providing grid-based power 8-15 MW thermal biomass power plants are suitable for Indian conditions, they stand nowhere when compared to power plants being set up in Europe which are at least 20 times larger.13

Government policy is the biggest factor behind lack of investment in biopower sector in states with high biomass potential. Defragmented nature of agricultural lands do not allow high mechanization which results in reduction of efficiency and increase in procurement cost.

6.2 Biomass power and cogeneration programmeTraditionally and historically, biomass has always been considered as an important source of energy in India. The favourable factors are the renewability, easy and local availabilit, carbon-neutrality and it’s potential to provide significant employment in the rural areas. It is estimated that about 32% of the total primary energy use in India is derived from biomass and more than 70% of the country’s population depends upon it for its energy needs. Ministry of New and Renewable Energy has realised the potential and role of biomass energy in the Indian context and hence has initiated a number of programmes for promotion of efficient technologies for its use in various sectors of the economy to ensure derivation of maximum benefits

13 http://www.bioenergyconsult.com/biomass-india/

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Biomass power generation in India is an industry that attracts investments of over Rs.600 crores every year, generating more than 5000 million units of electricity and yearly employment of more than 10 million man-days in the rural areas. For efficient utilization of biomass, bagasse based cogeneration in sugar mills and biomass power generation have been taken up under biomass power and cogeneration programme.14

The “Biomass power & cogeneration programme” is implemented with the main objective of promoting technologies for optimum use of country’s biomass resources for grid power generation. Biomass materials 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.

6.3 IncentivesThe Ministry of New and Renewable Energy (MNRE) has been implementing biomass power/co-generation programme since mid nineties. A total of 288 biomass power and cogeneration projects aggregating to 2665 MW capacity have been installed in the country for feeding power to the grid consisting of 130 biomass power projects aggregating to 999.0 MW and 158 bagasse cogeneration projects in sugar mills with surplus capacity aggregating to 1666.0 MW. States which have taken leadership position in implementation of bagasse cogeneration projects are Andhra Pradesh, Tamil Nadu, Karnataka, Maharashtra and Uttar Pradesh. The leading States for biomass power projects are Andhra Pradesh, Chattisgarh, Maharashtra, Madhya Pradesh, Gujarat and Tamil Nadu.

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 are available on equipments required for initial setting up of biomass projects based on certification by Ministry. 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 biomass power and bagasse cogeneration projects.

The Table 6.3 provides a summary of such provisions in different states.

14 http://www.mnre.gov.in/schemes/grid-connected/biomass-powercogen/

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Table 6.3: Summary of biomass power cogeneration tariff across states (As on 31.03.2011)

State Tariff fixed by Commissions RP0 %

Andhra Pradesh Biomass power

Rs.4.28/kWh, (2010-11) Min. 3.75%

Cogeneration

Rs.3.48/kWh

Chattishgarh Biomass power

@Rs.3.93/Unit (2010-11) 5%

Gujarat Biomass power

Rs.4.40/unit (with accelerated depre.)

10%

Cogeneration

Rs.4.55/unit (with accelerated depre.) for 1st 10 yrs

Haryana Biomass power

Rs.4.00/unit: 3%escalation (base year 2007-08)

1%

Cogeneration

Rs.3.74/unit: 3%escalation (base year 2007-08)

Karnataka Biomass power

Rs.3.66 per unit (PPA signing date) Rs.4.13 (10th year)

Min.10%

Cogeneration

Rs.3.59/unit, (PPA signing date) Rs.4.14/unit (10th Year)

Kerala Rs.2.80/unit Biomass power escalated at 5% for five years (2000-01)

3%

Maharashtra Biomass power

Rs. 4.98 (2010-11) 6%

Cogeneration

@Rs.4.79/unit (Comm yr.)

Madhya Pradesh Rs.3.33 to 5.14 /unit paise for 20 yrs. With escl of 3- 8paise

0.8%

Punjab Biomass power

Rs.5.05 /unit, (2010-11) escalated at 5% -cogen, & 5%-BM

Min. 3%

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Cogeneration

Rs.4.57/unit (2010-11)

Rajasthan Biomass power

Rs.4.72 / unit-water cooled (2010-11)

& Rs.5.17-air cooled (2010-11)

1.75%

Tamil Nadu Biomass power

Rs.4.50-4.74/unit(2010-11) Min. 13%

Cogeneration

Rs.4.37-4.49/unit (2010-11)- (Escalation 2%)

Uttaranchal BM Rs.3.06/unit. (2010-11) – 9%

Cogeneration

Rs.3.12/unit (2010-11)- (new projects)

U.P. Rs.4.29 / unit, for existing and 4.38 for new with escalated at 4 paise/year, base year (2006)

4%

West Bengal Biomass Power

Rs. 4.36/unit fixed for 10 years 4%

Bihar Biomass Power

Rs. 4.17/unit (2010-11)– 1.5%

Cogeneration

Rs.4.25/unit (2010-11) – existing plants

new Cogeneration

Rs.4.46/unit (after 2010-11)

Orissa Rs.4.09/unit

O.A.. - Open Access terms & conditions as for CERC and SERC’s order(The concerned state Regulatory Commissions provide the details and clarifications)

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6.4 Central Financial Assistance (CFA) and fiscal incentives The central government has designed various schemes for financial assistance to this sector. Most of these provisions and incentives are on specific application and technology, thereby suiting to the needs of individual type of projects..

Such CFAs for Biomass Power Project and Bagasse Cogeneration Projects by Private/Joint/Coop./Public Sector Sugar Mills are depicted din Table 6.4-a.

Table 6.4-a: Financial assistance and categories of biomass power projects

Special Category States(NE Region, Sikkim, J&K, HP & Uttaranchal)

Other States

Project Type Capital Subsidy Capital Subsidy

Biomass Power projects Rs.25 lakh X(C MW)^0.646 Rs.20 lakh X (C MW)^0.646

Bagasse Co-generation by Private sugar mills

Rs.18 lakh X(C MW)^0.646 Rs.15 lakh X (C MW)^0.646

Bagasse Co-generation projects by cooperative/ public sector sugar mills 40 bar & above60 bar & above80 bar & above

Rs.40 lakh *Rs.50 lakh *Rs.60 lakh *Per MW of surplus power@

(maximum support Rs. 8.0 crore per project)

Rs.40 lakh *Rs.50 lakh *Rs.60 lakh *Per MW of surplus power@

(maximum support Rs. 8.0 crore per project)

*For new sugar mills, which are yet to start production and existing sugar mills employing backpressure route/seasonal/incidental cogeneration, which exports surplus power to the grid, subsidies shall be one-half of the level mentioned above. @ Power generated in a sugar mill (-) power used for captive purpose i.e. net power fed to the grid during season by a sugar mill. Note: CFA and Fiscal Incentives are subject to change.

Similarly, Table 6.4-b and Table 6.4-c provide details of CFA provisions for Bagasse Cogeneration Project in cooperative/ public sector sugar mills implemented by IPPs/State Government Undertakings or State Government Joint Venture Company / Special Purpose

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Vehicle (Urja Ankur Trust) through BOOT/BOLT model and for sector sugar mills employing boiler modifications, respectively.

Table-6.4-b: CFA provisions for Bagasse Cogeneration Project in cooperative/ public sector sugar mills implemented by IPPs/State Government Undertakings or State Government Joint

Venture Company / Special Purpose Vehicle (Urja Ankur Trust) through BOOT/BOLT model

PROJECT TYPE MINIMUM CONFIGURATION CAPITAL SUBSIDY

Single coop. mill through BOOT/BOLT Model

60 bar & above 80 bar & above Rs.40 L/MW of surplus power *Rs.50 L/MW of surplus power*(maximum support Rs.8.0 crore/ sugar mill)

* Power generated in a sugar mill (-) power used for captive purpose i.e. Net power fed to the grid during season by a sugar mill.

Table 6.4-c: CFA for Bagasse Cogeneration Project in existing cooperative sector sugar mills employing boiler modifications

PROJECT TYPE MINIMUM CONFIGURATION CAPITAL SUBSIDY

Existing Cooperative Sugar Mill

40 bar & above 60 bar & above80 bar & above

Rs.20 L/MW of surplus power * Rs.25 L/MW of surplus power* Rs.30 L/MW of surplus power*

* Power generated in a sugar mill (-) power used for captive purpose i.e. Net power fed to the grid during season by a sugar mill. CFA will be provided to the sugar mills who have not received CFA earlier from MNRE under any of its scheme.

Note: CFA and Fiscal Incentives are subject to change.

6.5 Fiscal Incentives for Biomass Power Generation Various other fiscal incentives have been provided, as shown in Table 6.5.

Table 6.5: Fiscal Incentives for Biomass Power Generation

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

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boilers

Vapour absorption refrigeration systems

Organic rankine cycle power systems

Low inlet pressures small steam turbines

Income Tax Holiday Ten years tax holidays.

Customs / Excise Duty Concessional customs and excise duty exemption for machinery and components for initial setting up of Biomass power projects.

General Sales Tax Exemption is available in certain States

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6.6 Biomass gasification plants in IndiaAs a result of such incentives provided by the central and various state governments, many biomass power plants have been commissioned.

As on date, a total of 67 power plants are commissioned with capacities varying between 1 kW to 1,500 kW rating and the total installed capacity is of the order of about 8461.5 kW or 8.5 mW.15. The details are shown in Table 6.6-a.

Table 6.6-a: Biomass gasification plants (installed)

Power capacity (KiloWatt) No. of installationsTotal installed

capacity1 9 95 1 57.5 3 22.510 1 1015 2 3020 8 16025 3 7535 7 24545 2 9050 2 10060 1 6075 7 525100 7 700125 1 125150 3 450225 1 225250 2 500300 1 300415 2 830500 1 5001000 2 20001,500 1 1500

Total 67 8461.5

Table 6.6-b provides a consolidated list of such installations for power generation installed capacity in biomass power and cogeneration sector is about 2,664 mW16.

15 http://www.eai.in/ref/ae/bio/csbg/list_of_installation.html16 http://www.mnre.gov.in/schemes/grid-connected/biomass-powercogen/

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Table 6.6-b: Installations for power generation through biomass and cogeneration

STATE-WISE/YEAR-WISE LIST OF COMMISSINED BIOMASS POWER/COGENERATION PROJECTS (AS ON 31.03.2011)

(IN MW)

S.No.StateUpto 31.03.2003

2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11 Total

1Andhra Pradesh 160.05 37.70 69.50 12.00 22.00 33.00 9.00 20.00 .. 363.25

2 Bihar -- -- -- -- -- -- -- 9.50 9.50

3 Chattisgarh 11.00 -- -- 16.50 85.80 33.00 9.80 43.80 32.00 231.90

4 Gujarat 0.50 -- -- -- -- -- -- -- -- 0.50

5 Haryana 4.00 -- 2.00 -- -- -- -- 1.8 28.00 35.80

6 Karnataka 109.38 26.00 16.60 72.50 29.80 8.00 31.90 42.00 29.00 365.18

7Madhya Pradesh 1.00 -- -- -- -- -- -- -- 1.00

8 Maharashtra 24.50 -- 11.50 -- 40.00 38.00 71.50 33 184.50 403.00

9 Punjab 22.00 -- -- 6.00 -- -- -- 34.50 12.00 74.50

10 Rajasthan 7.80 -- 7.50 8.00 -- 8.00 -- 42.00 73.30

11 Tamil Nadu 106.00 44.50 22.50 -- 42.50 75.00 43.20 62.00 92.50 488.20

12 Uttarakhand -- -- -- -- -- -- -- -- 10.00 10.00

13Uttar Pradesh 46.50 12.50 14.00 48.50 -- 79.00 172.00 194.50 25.50 592.50

14West Bengal -- -- -- -- -- -- 16.00 -- 16.00

Total 483.93 129.50 136.10 163.00 228.10 266.00 345.40 447.60 465.00 2664.63

Apart from the existing installed capacities in biomass power generation, about 136 projects have been either proposed or sanctioned, totaling to about 2486.48 MW capacity, which are

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under various stages of completion in 201217. The details of such units is provided in Annexure- 3.18

The various stages of the projects are termed under the categories as Current Status: Status Not Known, Awaiting Statutory Clearances, Operational, Construction Commenced, Contract Awarded, Land Acquistion Underway, Bids Invited, Announcement, Advanced Stages of Commissioning, Bids Invited, Construction Underway, PPA Signed, Pre Project Activities Underway, Received Statutory Clearances and Status Not Known

7 Conclusion:While the state of Punjab could have been considered for the demonstration project, the general acceptance of the population of the state and the comparatively poor past track record of such application, it was decided not to consider the state. However, with the wide spread acceptability of the concept, a favourable atmosphere and congenial mind set of people in the state of Uttar Pradesh, it was considered to select the state for the demonstration. Another factor which favoured choice of Uttar Pradesh was it’s accessibility. The accessibility factor was due to the need and requirement of multiple visits to the probable demonstration project site. This selection would facilitate frequent visits for coordination and follow up during the project commissioning and testing stages.

17 http://powerbase.in/reportstore/upcoming-biomass-power-projects-2012/18 http://indianpowersector.com/home/2011/12/biomass-power-generators-to-plead-case-on-rates-costs/

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Annexure-1

State-wise Estimated Power Potential from Surplus Agro-Residues in India-201019

State Power Potential (MW)Punjab 3172.1Maharashtra 1887.3Uttar Pradesh 1616.7Madhya Pradesh 1364Haryana 1332.6Gujarat 1220.7Karnataka 1130.5Tamil Nadu 1069.5Kerala 1044.4Rajasthan 1038.9Bihar 618.7Andhra Pradesh 577.7West Bengal 396Orissa 246.4Chhattisgarh 235.8Assam 211.8Himachal Pradesh 142.2Jharkhand 90Jammu and Kashmir 42.6Goa 25.7Uttarakhand 23.7Manipur 13.4Meghalaya 11.1Nagaland 10.2Arunachal Pradesh 8.2Tripura 2.9Sikkim 2.3Mizoram 1India 17536.4

19 indiastat.new\htmData\10\527283.htm

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Annexure-2

Residue-wise Biomass Data - State: Uttar Pradesh; Year: 2000-04; Season:20Kharif & Rabi

Crop Residue Area

(kha)

Crop

Production

(kT/Yr)

Biomass

Generation

(kT/Yr)

Biomass

Surplus

(kT/Yr)

Power

Potential

(MWe)

Paddy Straw 5315.4 10916.3 16374.4 4093.6 491.2

Wheat Pod 6016.2 16389.0 4916.7 2458.4 344.2

Wheat Stalks 6016.2 16389.0 24583.6 2458.4 319.6

Paddy Husk 5315.4 10916.3 2183.3 1746.6 192.1

Maize Stalks 768.9 1199.5 2399.1 959.6 124.8

Bajra Cobs 746.9 853.2 281.6 197.1 25.6

Maize Cobs 768.9 1199.5 359.9 179.9 25.2

Bajra Stalks 746.9 853.2 1706.4 170.6 22.2

Gram Stalks 312.8 282.0 338.4 101.5 13.2

Bajra Husk 746.9 853.2 256.0 64.0 7.7

Arhar Stalks 199.3 211.3 528.3 52.8 6.9

Jowar Stalks 208.2 195.5 332.3 33.2 4.32

Arhar Husk 199.3 211.3 63.4 31.7 3.80

Jowar Cobs 208.2 195.5 97.7 19.5 2.74

Jowar Husk 208.2 195.5 39.1 19.5 2.35

Mustard Husk 43.3 33.1 16.9 16.0 1.92

Urad Stalks 264.2 106.8 117.5 11.8 1.53

Urad Husk 264.2 106.8 21.4 10.7 1.28

Mustard Stalks 43.3 33.1 59.6 8.9 1.16

Groundnut Stalks 48.4 42.9 85.8 8.6 1.12

Groundnut Shell 48.4 42.9 12.9 9.0 1.08

Masoor Stalks 49.2 34.2 61.5 6.1 0.80

Barley Stalks 27.0 29.6 38.4 3.84 0.50

Kodo millets Stalks 4.30 2.70 3.13 2.51 0.33

Moong Stalks 25.4 12.7 13.9 1.39 0.18

Peas & beans Stalks 5.8 4.39 2.20 1.10 0.14

20 http://lab.cgpl.iisc.ernet.in/atlas/Tables/Tables.aspx

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Small millets Stalks 12.3 8.0 9.6 0.96 0.13

Sawan Stalks 0.32 0.22 0.22 0.18 0.089

Onion Stalks 4.35 96.2 4.81 0.48 0.067

Others 7.1 1.03 4.48 0.45 0.056

Total 14059.4 30418.7 54912.4 12668.7 1596.2

As it is not possible to consider the entire state as an entity, the further analysis of the residual biomass was carried out on a district basis.

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Annexure-3

Biomass power projects sanctioned and under various stages of construction

State No. of Projects

Capacity in MegaWatt Total capacity

Andaman & Nicobar

2 20 (2x10) and 7.5 27.5 MW)

Andhra Pradesh

12 6, 7.5, 7.5, 8, 7, 6, 7.5, 6, 15, 7.5, 2 and 15 94

Assam 1 2.48Bihar 11 1.2, 12, 12, 6, 12, 1.6, 12, 10, 12, 1.2 and 12 92

Chhattisgarh6 60 (2 x 30), 80, 5, 9.8 to 2010 and 15

About 185

Delhi 3 30, 24 and 16 Total 80Gujarat 8 9.95, 10, 20, 10, 20, 20, 20 and 10 Total about 120Haryana 7 8, 5, 9, 8, 6, 7.5 and 10 – 24 Total about 60Jharkhand 1 23 23Karnataka 6 1, 6, 2, 9, 64 and 6 88Madhya Pradesh

17 15, 20, 10, 10, 10, 10, 10, 4, 10, 10, 10, 10, 15, 10, 10, 10, 10 Total (184

Maharashtra 18 12, 10, 10, 10, 10, 25, 7.5, 12, 10, 10, 13, 8, 10, 10, 10, 65, 6.5 and 500

about 738

Orissa 6 15, 10, 20, 20, 20 and 10 95

Punjab 13 41, 10, 147, 12, 20, 20, 12, 60, 36, 20, 23, 12 and 10 423

Rajasthan 8 8, 8, 8, 10, 15, 15, 15 and 7.5 Total 86.5Tamil Nadu 11 7.5, 16, 10, 6, 18, 7.5, 10, 7.5, 10, 18 and 12 Total 122.5Uttar Pradesh

1 15

Uttarakhand 1 20

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West Bengal4 2.5, 10, 10 and 8 Total 30.5

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