The total biomass potential available in India is 754.5 million tonnes (mt), according to the “Evaluation Study for Assessment of Biomass Power and Bagasse Cogeneration Potential in the Country” released by the Administrative Staff College of India (ASCI), Hyderabad, in March 2021. Notably, around 75 per cent of this potential, equivalent to 525.98 mt, is being utilised, leaving a surplus of 228.52 mt.
The utilisation of this surplus biomass, particularly through co-firing in thermal power plants (TPPs), has emerged as a key concern for policymakers in recent years. This is crucial not only for monetising this abundant raw material through energy generation but also for creating an additional revenue stream for farmers and addressing a major environmental challenge – stubble burning. The biomass sector becomes a key point of discussion during the winter months when the menace of stubble burning and industrial pollution creates health hazards, especially in North India.
This article covers the policy impetus in this space, key challenges and the way forward for the biomass sector…
Policy impetus
At the recently held “International Conference on Biomass Densification”, supported by Renewable Watch, Krishan Pal Gurjar, Minister of State for Power and Heavy Industries, stated that India, as an agrarian economy, has created new opportunities for various stakeholders and farmers in the biomass sector. Currently, 47 TPPs are using 210,000 metric tonnes of biomass for co-firing. The minister added that the government is making efforts to increase the use of biomass due to its various benefits, such as the reduction of coal consumption in TPPs, creation of avenues for pellet processors and transporters, increased income for farmers, and improvements in soil quality due to the non-firing of agricultural waste. To this end, the Ministry of New and Renewable Energy (MNRE) is promoting the use of biomass by providing subsidies and the Reserve Bank of India (RBI) has announced priority sector lending for the biomass sector.
In a written reply to a question raised in the Rajya Sabha on August 2, 2023, R.K. Singh, Union Minister for Power
and New and Renewable Energy, informed that approximately 164,976 metric tonnes of agricultural residue-based biomass has been co-fired in 47 coal-based TPPs as of May 2023.
The minister also informed that the Ministry of Power (MoP) had issued a modification on June 16, 2023 to revise the biomass policy of 2021. Under the revised policy, it is now mandatory for TPPs to implement 5 per cent biomass co-firing starting from financial year 2024-25. This obligation will increase to 7 per cent from financial year 2025-26.
The minister also highlighted the government initiatives to ensure the availability and procurement of biomass pellets for co-firing in TPPs. These include financial assistance schemes by the MNRE and the Central Pollution Control Board for biomass pellet manufacturing units. In addition, RBI has approved biomass pellet manufacturing as an eligible activity under priority sector lending. The other noteworthy measures include creation of a procurement provision for the biomass category on the Government e Marketplace (GeM) portal, issuance of a revised model for long-term contracts for biomass supply by the MoP, creation and listing of a vendor database on the SAMARTH website, awareness programmes and advertisement campaigns, provision of Udyam Aadhaar on a national single-window system and the release of a bankable model project report for biomass pellet plants.
Furthermore, through a policy amendment dated May 3, 2023, the MoP has identified the various surplus agricultural residues such as stubble, straw, stalk and husk, which could be utilised for biomass pellet manufacturing. These residues will be derived from crops such as paddy, soya, arhar, gwar, cotton, gram, jawar, bajra, moong, mustard, sesame, til, maize, sunflower, jute and coffee, as well as groundnut, coconut and castor seed shells. In addition, pellets made from agricultural products, crops, or waste can also be used for co-firing in TPPs. These include bamboo and its by-products, and horticultural waste such as dry leaves and trimmings from maintenance and pruning of trees and plants, pine cones/needles, elephant grass and sarkanda.
In June 2023, the MoP decided to benchmark the prices of biomass pellets used for co-firing in TPPs. The benchmarked price will take into account the business viability, impact on electricity tariffs, and efficient and faster pellet procurement by power utilities. Price benchmarking of pellets will enable the TPPs as well as pellet vendors to establish a sustainable supply mechanism for co-firing of pellets. The benchmarked price, as finalised by the committee under the Central Electricity Authority (CEA), will come into effect from January 1, 2024. Until the committee’s recommendations are implemented, power utilities will announce short-term tenders to fulfil their immediate biomass pellet requirements for TPPs.
In another policy modification, it was directed that since the availability of torrefied biomass pellets in the country is currently limited, their procurement will be limited to cases where it is technically indispensable for utilities. Utilities that can use non-torrefied pellets are advised to prioritise their utilisation.
Under the National Bioenergy Programme planned for the period 2021-22 to 2025-26, the government has executed a biomass initiative as part of Phase 1, with a budget outlay of Rs 1.58 billion to support pellet/briquette plants and cogeneration plants. The central financial assistance (CFA) under the biomass programme is given in Table 3.
Key challenges
According to Bajrang Lal Sharma, manager (technical services), Bharat Heavy Electricals Limited (BHEL), a key challenge in the biomass sector is to ensure the availability of torrefied biomass pellets in the required quantity, while adhering to the CEA guidelines of blending a minimum of 5 per cent with coal. This is a significant concern as
there are several advantages of torrefied pellets. One, unlike wood pellets, these pellets can be stored outdoors for a considerable amount of time. Two, due to their higher calorific value per kg, the energy used in transportation of torrefied pellets is lower compared to wood pellets. Three, torrefied biomass has better milling characteristics (size and energy use) than raw biomass. Four, torrefied biomass undergoes very slow biological decomposition compared to raw biomass.
Another challenge is the storage of biomass pellets for long durations at plant sites. 
Owing to their hygroscopic nature, they absorb moisture from air quickly, which compromises their efficiency for co-firing. Moreover, there is lack of clarity on government incentives/tariff benefits for biomass co-firing with coal, given the high cost of biomass fuel and the loss of plant efficiency.
Sudip Nag, mission director, SAMARTH, and executive director, biomass, NTPC, has identified other challenges in the sector. These include a limited number of vendors for pellet machines; absence of a collection, aggregation and transportation mechanism for handling raw biomass; volatility of raw biomass prices; diversion of biomass pellets to other industries at higher prices; and inadequate financing for working capital loans.
The way forward
Going forward, India needs 100,000 metric tonnes of biomass pellets per day for co-firing in TPPs, according to Aman Kwatra, director, 3e BIOeDhan Sustainable Solutions Private Limited, and member, Biomass Global Associates Forum. While several pellet plants have been installed in the past few years to fulfil this demand, they are now facing operational/sustenance challenges. Therefore, strict policy implementation for pellet procurement by TPPs is a priority.
In addition, going forward, more clarity is needed on the pricing mechanism. This is because many biomass procurement tenders have been withdrawn and TPPs have not been able to attract the required number of bidders. The main reason for this problem is the economically unviable prices initially quoted by participants who ultimately back out. Furthermore, according to Kwatra, strict policy guidelines should be implemented for firing of loose biomass. Moreover, biomass co-firing should be implemented on a pan-India basis for all industries apart from power plants in a phased manner. In terms of financial incentives, Kwatra suggests interest subsidies for this sector and faster disbursement of loans and subsidies.
Colonel Rohit Dev, co-chairperson, Biomass Global Associates Forum, suggests that low-cost finance with no collateral should be provided for the sector. Also, there should be a single financial scheme to support the entire value chain including warehousing through the Agriculture Infrastructure Fund. Moreover, there should be mandates for the utilisation of biomass within a zone for various types of projects. He also highlights the need for premium pricing due to health and environment considerations, to support second-generation ethanol and other segments. To enhance coordination and representation, Dev suggests the creation of a centralised apex body for bioenergy involving all stakeholders.
There is a debate around whether the excess biomass available should be co-fired in TPPs or used in decentralised biomass projects. Dev favours its use in distributed projects, provided there is proper zoning. In select zones, the excess biomass can also be co-fired in TPPs, and supply chains for the same will have to be curated.
Going forward, it is also necessary to ensure the success of the tenders for biomass procurement. Responding to a query posed during a recent press conference, R.K. Singh mentioned that the government plans to introduce feed-in tariffs for biomass procurement. This may solve the problem of inexperienced bidders quoting unrealistic prices in such tenders, making them unviable, as highlighted by several industry experts.
Net, net, while there are several challenges in the utilisation of excess biomass for co-firing or decentralised biomass plants, government initiatives are under way to resolve these concerns. Going forward, it is essential for government agencies and industry stakeholders to collaborate and discuss key policy and regulatory gaps. This will propel the sector’s growth, thereby benefiting the economy through the generation of green electricity and the mitigation of severe health hazards caused by stubble burning.