1. BIOMASS POWER – BUSINESS OPPORTUNITIES By S N Srinivas, PhD UNDP 1 United Nations Development Programme, India Lasting Solutions for Development Challenges

2. PRESENTATION 1. BIOMASS POTENTIAL 2. CHALLENGES 3. ACHIEVEMENTS TILL NOW 4. COST-BENEFITS 5. LEARNINGS 6. SENSITIVITY ANALYSIS AT DIFFERENT TARIFFS (TENTATIVE) 7. PREVAILING TARIFFS FOR BIOMASS POWER IN INDIA 8. OTHER INITIATIVES INVOLVING BIOMASS POWER 9. A CASE STUDY OF SUCCESSFUL BIOMASS BUSINESS FOR THERMAL APPLICATION 10. ISSUES AND WAY FORWARD (INCLUDING NICHE SCOPE)

3. 1. BIOMASS POTENTIAL 1. India has installed capacity of 187,550 MW (31 Jan 2012), however still face peak deficit of power 12.7% in year 2009-10. 2. There are estimates that 25000 to 35000 MW diesel power meets deficit. Part of these existing diesel installations can be retrofitted to biomass gasification 3. Biomass power generation potential ranges from 15,000 MW to 23,700 MW. However, till now only 2,505 MW has been harnessed. National Biomass Atlas provides district-wise assessment of biomass Step 1. First go to the link given below; http://cgpl.iisc.ernet.in/site/BiomassAtlas/tabid/91/Default.aspx Step 2: Click on the line Click here to visit National Biomass Atlas of India Click here to visit National Biomass Atlas of India Step 3: Login appears, Register yourself Step 4 Click on Regional Biomass Tables. 4. Scope exists for energy plantations A. Wastelands (57 million hectares) B. Farm forestry C. Un-used forest lands

4. 2. CHALLENGES 1. Proven technologies on the anvil (BERI), bankable technology packages, and revenue models (Sankheda, MPPL) 2. Lack of credible suppliers and a competitive market for RE products 3. Dependable and stable cost Raw material supply 4. Issues related to evacuation of power to grid (tariff, active power) 5. Issues related to off grid power systems (generation, O&M, supply, price setting, revenue collection), parity in pricing (weighted average of power in rural village is about 0.8 Rs/kWh, best price from RE is about Rs 5/kWh) 6. Competing uses of biomass and sudden escalation of price of biomass once a plant is established 7. Cost of generation 8. Costs and complexities of scale of operation 1. less than 100 kW, 2. 100 kW to 1 MW, 3. 2 MW, and 4. above 2 MW Lack of investor interest

5. 3. Achievements till now - Biomass Energy for Rural India India 5 GRID (11 KV line) Clust er 1 Clust er 2 100 kW (dual-fuel) 100 kW 200 kW 100 kW 250 kW

6. Operational data BERI 100 kWe performance of 1000 hours Gasifier operation1035 h Engine Operation1022 h Grid Synchronisation951 h Total biomass consumption111 t Average107 kg/h Specific Energy Consumption (calorific value 15 MJ/kg)1.36 kg/kWh Best recorded SEC1.2 kg/kWh Total energy generated80,600 kWh Net energy exported to grid56,500 kWh Average load factor85 kWe Peaking load factor100 kWe Rated Capacity of Engine120 kWe Overall efficiency biomass to electricity18% Overall efficiency producer gas to electricity25% Cold gas efficiency77% Estimated efficiency for 500 kWe25 to 30% Efficiency of 100 MW e coal plant34%

7. 4. Cost-benefits: Comparison of SECs and some economics

8. 5. Learnings based on Biomass Energy for Rural India Business model: Panchayat-BERI PMU/Society–BESCOM agreement to evacuate power –Established feasibility of Decentralized Rural Biomass Power System with involvement of PanchayatEstablished feasibility of Decentralized Rural Biomass Power System with involvement of Panchayat –Sold about 1 Million Units of power to BESCOM at a tariff of Rs 2.85/kWh earning about 2.85 million Rs –Can evolve as business model for entrepreneur run, GP governed biomass power generation providing employment, electricity for income generation to rural areasCan evolve as business model for entrepreneur run, GP governed biomass power generation providing employment, electricity for income generation to rural areas Plantation: –Plantation in about 3000 hectares of land yielding about 4 to 5000 tonnes (against estimate yield of 12000 tonnes) annuallyPlantation in about 3000 hectares of land yielding about 4 to 5000 tonnes (against estimate yield of 12000 tonnes) annually –Gram Panchyat hGram Panchyat –240,000 tCO2 reduced/sequestered till now (about 26,000 tCO2 annually); –100 men and 100 women employed in power plant operation and plantations management Estimates indicate 20% additional money ploughing back in project area All basic data procured from BERI gasifier plant are uploaded on the website – perhaps one of the unique feature –www.bioenergyindia.in or www.berisociety.comwww.bioenergyindia.inor www.berisociety.com 8

9. 6. Sensitivity analysis at different tariff (tentative)

10. 7. Prevailing tariffs in India for biomass power 10

11. 8. OTHER INITIATIVES INVOLVING BIOMASS POWER PROGRAMMEHIGHLIGHTSREMARKS/ISSUES Decentralized Distributed Generation – Ministry of Power. To support supply of electricity and indirectly facilitate power requirement of agriculture, small & medium industries 25,000 villages not covered under MNREs RVE programme are eligible. 15 projects have been sanctioned with committed amount of Rs 77 million. NTPC is implementing 14, WBREDA is implementing 1. Expected to achieve 2 to 5 MW. 1.Lack of access to competent, effective and responsive affordable technical back-up 2.Inadequacies in community management, O& M 3.Uncertainties in modalities of funding support Remote Village Electrification (RVE) – electrification of (not feasible or not cost effective for grid extension) unelectrified villages and hamlets through RE 8,033 villages and hamlets have been covered. 1.Largely meets lighting requirements. Village Energy Security Programme (VESP) About 90 projects implemented in different villages (mostly 10 to 20kW biomass gasifiers). 30 projects were functioning as per an evaluation 1.Inadequate commissioning and training. 2.No technical and service back up. 3.Cost of power generation were as high Rs 13 to 20 per kWh. SUTRA (UNDP supported, IISc implemented) Demonstrated 50 kW biomass gasifier systems 1.No institutional arrangement 2.Higher costs of power to end user LIBERA (SDC supported)Demonstrated less than 50 kW biomass gasifier systems 1.Found difficult to source biomass 2.No institutional arrangements 11

12. 9. A CASE STUDY OF SUCCESSFUL BIOMASS BUSINESS FOR THERMAL APPLICATION Vijay Engineering Enterprises is involved in selling gasifiers and supply services of raw materials and technical back up. 1250 tons of biomass supplied per year (50 lakhs per year) They have sold 60 systems of capacities ranging from 60 to 200 kg/h. Applications: Bengal gram, chemical processing, tamarind seed roasting, condiments/biscuits making, bakery and powder coasting Approximate turnover: 3 Crore per year (50% due to gasifier business) 200,000 hours of cumulative operation

13. 10. Issues and way forward 11 kV connection is a must to be prepared for evacuation to grid and appropriate amalgamation with local load will help higher PLF Dependable, long term raw material supply - Plantations to support such biomass power plant is important sustainability factor in long term, however, approaches for management of plantations and ensuring good yields still needs to be worked out There are very few players who can run and manage such plants on turn-key basis Government of Karnataka is considering replicating it for 100 MW in the state MNRE is considering 2 MW as niche area for tail end grid support which opens up enormous potential to harness biomass for power Pricing - MNRE is considering negotiating for tariff restructure to support sub-megawatt scale projects – should be around Rs 9 per kWh Off-grid tariff and other support systems needs to be formulated

14. 10 Contd. Some niche scope 1. There are about 88,000 Grama panchayat in the country (0.5 MW to 10 MW is the power required per GP - approximation) with harnessing plantation – 3,520 no. of 1 MW systems - Investment scope Rs 17,600 Crore (Average 1 MW per 5 GPs in 20% of GPs would mean 3,520 MW (Rs 17,600 Crore @ Rs 5 per MW) 2. Brick kilns are going for mechanisation which requires 100 kW power. 50,000 brick kilns are there in India. Assuming 20% of them go for mechanisation, it holds potential for 10000 nos. of 100 kW scale power generating units (1000 MW) 3. Lift Irrigation (typical load 100 kW) – Government of Karnataka has requested us to explore options including biomass power 4. Agriculture pump sets (typical load 10 kW) – 15 million electrical and 6 million diesel pump sets 5. Flour mills in rural areas (typical load 10 kW) – may be about 88,000 (@ 1 no. per grama panchayat) 6. 13 million unorganized enterprises (30% of them energy consuming of which 40% consume biomass) 7. 3 million SSIs (70% of them consume energy)

15. Thank You! 15 United Nations Development Programme, India Lasting Solutions for Development Challenges S N Srinivas, PhD Programme Analyst (Energy and Climate Change) United Nations Development Programme (UNDP) No. 55, Lodi Estate New Delhi – 110 003 Tel: 011- 4653 2251 (Direct) Fax: 011- 2462 7612 E-mail: sn.srinivas@undp.orgsn.srinivas@undp.org Website: www.undp.org.inwww.undp.org.in