Biomass & Cogeneration


Various technologies including gasification, combustion and cogeneration are used for the conversion of biomass materials into electric power. Biomass is an important energy source contributing to more than 14% of the global energy supply. About 38% of such energy is consumed in developing countries, primarily in the rural and traditional sectors of the economy.

The strong demand for bio-fuel is in response not only to high crude petroleum prices, but also to the growing concerns about global climate change. Two major bio-fuels for the transportation sector, bio-ethanol and bio-diesel have gained worldwide acceptance.

Among various options available for bioenergy - biodiesel, bioethanol and biomass gasification are three major options, which have huge potential in India to develop as energy sources and where investments made would be economical.

Biomass could be described as an important source of energy in the Indian context, accounting for approximately a third of the total primarily fuel sources used in the country, which could be harnessed to produce electricity.

In India, biomass-based power generation has attracted investments worth USD 120 million and generated more than 5,000 million units of electricity, besides providing an employment to more than 10 million man-days in rural areas. India ranks second in the world in biogas utilisation.

India - Potential and cumulative achievements

Indian climatic conditions offer an ideal environment for biomass production. Bio-energy has remained critical to India’s energy mix. The current potential of surplus agro and forest residues to energy is estimated at 16,881 MW along with an additional “waste-to-energy” potential of 2,700 MW. With the setting up of new sugar mills and the modernization of existing ones, the potential of Bagasse cogeneration is estimated at 5,000 MW. The cumulative installed capacity, of grid-interactive biomass and Bagasse cogeneration power was 1,870.83 MW only, as on 30.6.2009.

Under the 11th Plan period ( 2007-12) the Government of India plans to add as much as 1700 MW through biomass and Bagasse cogeneration in various states.

India encourages ethanol as a fuel for automobiles and Regulations provide for the mandatory blending of 5% of ethanol with petrol (to be increased to 10%). The Government also plans to free the movement of ethanol across the country and eliminate local taxes thereby increasing its usage. 

Advantage India

Close on the heels of the Kyoto protocol recommending a phased changeover to bio-diesel through blending, the Government of India has taken a number of initiatives to promote bio-fuels.

The availability of biomass in India is estimated at about 540 million tones per year covering residues from agriculture, forestry, and plantations. By using these surplus agriculture residues, more than 16,000 MW of grid quality power can be generated.

India has approximately 50 million hectares of degraded wasteland that lie outside the areas demarcated as national forests, and another 34 million hectares of protected forest area, in much of which tree cover is severely degraded.

In addition, about 5,000 MW of power can be produced from sugar mills residues. Thus the estimated biomass power potential is about 21,000 MW. India has approximately 50 million hectares of degraded wasteland that lie outside the areas demarcated as national forests, and another 34 million hectares of protected forest area, in much of which tree cover is severely degraded.

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 is also available.

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. 

In addition, capital subsidies area also given for the establishment of Bagasse and Biomass based units.

Capital subsidy for Bagasse/biomass cogeneration projects
  Special Category States (NE Region, Sikkim, J&K, HP and Uttarakhand) Other States
Biomass Based Projects
Biomass Power Projects INR 25 lakh X (Capacity in MW)^ 0.646 INR 20 lakh X (Capacity in MW)^ 0.646
Bagasse Cogeneration INR 18 lakh X (Capacity in MW)^ 0.646 INR 15 lakh X (Capacity in MW) ^ 0.646
Bagasse Cogeneration projects by cooperative/public/joint sector (maximum support INR 8 crore per project)
40 bar and above INR 40 lakh per MW* INR 40 lakh per MW*
60 bar and above INR 50 lakh per MW INR 50 lakh per MW
80 bar and above INR 60 lakh per MW INR 60 lakh per MW
Biomass Power using Advanced Technologies INR 1.2 crore X (Capacity in MW)^ 0.646 INR 1.0 crore X (Capacity in MW) ^ 0.646

* For new sugar mills subsidies shall be one-half of the level mentioned above.