My colleague, Jai Rathod, attended the recently concluded Biomass Energy Conclave 2011 held at the Taj Krishna – Hyderabad, organized by Renewable Markets India.
Some key takeaways
- The encouraging and positive attitude of Mr. Sudeep Jain (CMD, TEDA), Mr. YB Ramakrishna (Exec Chairman, Karnataka State Biofuel Development Board) & Mr. Chandan Mitra (CMD, NEDCAP) among others towards biomass power projects. Their passion and enthusiasm bodes well for the future of renewable energy especially in those states.
- Most biomass power projects in the country have either shut down or are on the verge of shutting down as biomass feedstock prices have risen from Rs. 800 per ton to as high as Rs. 4500 per ton in certain parts of the country. All this while the PPA rate has remained fixed. Feedstock prices have increased as several sectors such as cement, textiles, etc. have also started using biomass and can pay higher rates than biomass power plants.
- State PPA rates for Biomass power projects are under revision or expected to be revised upwards in several states. Currently the Biomass PPA rates hover around an average of Rs. 4.50 across India. However, it was also acknowledged that the revised rates would be unsustainable in the long run, with the only way this can be achieved is through Energy Plantations. This was a validation of our efforts in this area. We are also of the opinion that this is one of the optimum ways for biomass power to achieve the scale and sustainability.
- Mr. YB Ramakrishna made a poignant observation that India has a lot of wastelands and also “wasted” land that can be utilized for energy plantations.
- Several states have stopped issuing new biomass power licenses due to uncertainty over sustainable feedstock supply.
- Uncertainty among biomass power license holders and developers due to feedstock concerns.
- Only small projects of between 1 – 3 MW have any chance of succeeding in the present scenario.
- Tremendous opportunity for backward integration.
- New investors can benefit from this opportunity to set up energy plantations with very high return on investment and break-even period of lower than 2 yrs.
In conclusion, the biomass power scenario in India, while currently appearing bleak, is going through several changes in terms of mindset and approach. Biomass power has the most potential, along with possibly solar, from among the entire basket of renewable energy fuel sources. Ultimately, however, its success will depend on whether all the interested stakeholders – government, state electricity boards, private entities, power producers, farmers – can collectively come up with a model which is practical, sustainable, scalable and competitive.