High operating costs affect biomass power projects: Upendra Tripathy, Secretary, MNRE

Despite so many inherent benefits, a number of biomass power projects, of late have been facing problems due to high cost of operation, said Upendra Tripathy, Secretary, Ministry of New & Renewable Energy (MNRE), while inaugurating a workshop on ‘Regulatory and financial barriers and challenges in power generation from biomass’ on June 9, 2014.
 
Underlining the importance of biomass based power generation, Tripathy said that it plays a very important role among various renewable sources due to its high plant load factor (PLF), affordable unit cost of generation, potential to provide large scale productive employment and the other economic benefits to farmers who are main producers of biomass and therefore, biomass power generation a focus area of the Ministry. He informed that the present cumulative installed capacity of biomass based power plants, both grid-interactive and off-grid, is about 4,700 MW in India.
 
However, in the recent times, rising input cost have led to increase in operationing costs of biomass based power plant. While biomass prices have witnessed continuous rise, the revision of tariff for biomass based power by State Electricity Regulatory Commissions (SERC) has not kept pace with the increasing costs of biomass. Also, the existing inconsistencies in values of the certain parameters have to be harmonised and taken into account by SERC’s for determination of tariff, added Tripathy.
 
In the current scenario, financial institutions have displayed reluctance in financing biomass power projects, thereby posing problems for new investments in the sector. The distribution companies, who are key to the off take of biomass power, have also not been pro-active. They could play a more proactive and encouraging role in order to promote the sector, said Tripathy.
 
The Secretary appealed to the SERC to help in effecting reforms by taking cognisance of the revised regulations recently notified by Central Electricity Regulatory Commission (CERC) and pass on the benefits to the biomass power producers so that their plants can run economically. CERC has also approved values for critical parameters and recommended for annual revision of fuel price based on independent survey.