Biomass power generators to plead case on rates, costs

Companies using biomass to generate power are worried over the rise in closures due to the burgeoning cost of raw materials. They want annual revision of the variable cost component of the power supply rates fixed for them, a mechanism to ‘fix’ the price of biomass and some concessions on connections to the grid.

They’d be pleading their case at a public hearing convened by the Central Electricity Regulatory Commission (CERC) on Thursday, on the draft rules on rates fixed for renewable energy, for the 2012-17 period. CERC Chairman Pramod Deo said, “We will hear all operators of renewable energy, including biomass power plants.”

P Krishnakumar, president of the Indian Biomass Power Association, told Business Standard: “We are of the view that the (rate) revision for biomass power projects can be done annually and should be limited to the impact of interest costs and fuel costs. We will also request CERC to exempt the scheduling of biomass power plants, as these operate subject to availability of biomass.”

RATE ROTA
State	Tariff fixed by  state commissions
Andhra Pradesh	@ Rs 4.28 per unit  (2010-11)
Chhattisgarh	@ Rs 3.93 per unit (2010-11)
Gujarat	@ Rs 4.40 per unit (with accelerated depreciation)
Haryana	@ Rs 5.24 per unit
Karnataka	@ Rs 3.66 per unit (PPA signing date)  Rs 4.13 (10th year)
Kerala	@ Rs 2.80 per unit escalated at 5% for  five years (2000-01)
Maharashtra	@ Rs 4.98 (2010-11)
Madhya Pradesh	@ Rs 3.33 to 5.14/unit paise for 20 years  with escalation of 3-8 paise
Punjab	@ Rs 5.25 per unit, (2010-11)
Rajasthan	@ Rs 4.72/unit water cooled (2010-11)
Uttar Pradesh	@ Rs 4.70
Source: Different state electricity regulatory commissions & Indian Biomass Power Association

Komaraia M, chairman and managing director of Shalivahana Green Energy, painted a bleak picture of the sector. “Nearly 60 per cent of biomass plants are shut,” he said. “This is because of rising biomass cost and an inadequate tariff (rate). It is difficult to increase biomass capacity to 19,500 Mw during the 12th and 13th five-year plans (it is presently 1,084 Mw) in such circumstances.”

Mamata Dalmiya, managing director of Parijat Nextgen Energy, said “Biomass is as steady and predictable in power supply as a coal-based power plant. Currently, biomass power plants are bleeding. Generally, biomass prices go up in July and, therefore, biomass power pricing should be seasonal. During the monsoon, biomass operators have to store biomass, which also costs more.”

CERC is also to be pressed to direct state electricity regulatory commissions to allow inter-state open access for biomass power.