Specialists in Tamil Nadu are divided over whether the Central government’s scheme of assistance for biogas generation, announced on Friday, will actually help revive the biomass power sector in the State.
In the last couple of years, the capacity addition in the area of biomass power plants (bagasse-based and non-bagasse) has been negligible.
According to the Tamil Nadu Electricity Regulatory Commission (TNERC), the agency to issue orders on procurement price from such plants, an addition of 26 megawatt (MW) was made in respect of the bagasse-based plants and 6.5 MW in the case of the other during 2016-2018.
Increasing cost and shortage of raw material and low returns are among the factors cited for the poor capacity addition.
It is against this context that the Centre’s scheme has assumed relevance. According to the scheme, the Central Financial Assistance (CFA) will be provided at the rate of ₹25 lakh per MW for bagasse cogeneration projects, and ₹ 50 lakh per MW (non- bagasse projects). The back-ended assistance will be released in one instalment after successful commissioning and commencement of commercial generation and performance testing of the plant.
Target capacity
The scheme comes in the backdrop of the Centre stipulating a target of capacity addition of 740 MW through biomass plants in two years.
K. Vishnu Mohan Rao, an energy specialist with Citizen Consumer and Civic Action Group (CAG), points out that the scheme covers resources such as agro-based industrial residue and wood waste produced in industrial operations and says it may be more beneficial for firms planning to establish plants to meet their energy requirements.
S. Narasimhan, a renewable energy consultant, feels that the level of assistance for non-bagasse based plants needs to be increased to ₹ 80 lakh per MW, as the scheme also covers expansion projects too. The increase may make many existing plants, now lying dormant, become viable.
However, a TNERC official says that those running non-bagasse biomass plants would not be in a position to consider expansion projects, as they are poorly placed than bagasse-based cogereration plants.
The Union government should come out with an exclusive scheme for them, he added.
