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Biomass Plants in India Shutdown as Feedstock Costs Race ahead of Prices

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Biomass Plants in India are shutting down as feedstock costs have increased rapidly while government regulated electricity tariffs have yet to increase.60% of India’s Biomass Plants have closed down as they are longer profitable.Note India has a massive growth target for biomass electricity capacity up from 1 GW at present (2 GW if you count cogeneration).A number of agricultural companies have set up a number of plants besides dedicated green utilities.However inflation in India has affected the operation of plants specially those who don’t have inhouse feedstock supply.

Green Companies in India are appealing to the electricity regulation CERC to increase the mandated tariffs which are different for different states.Like the thermal power generators increase in fuel prices had made operation unviable.The electricity sector in India is heavily regulation and lack of a free market causes these periodic booms and busts.

CERC Feed in Tariff for Biomass Produced Electricity for Different States

Note India’s Electricity Regulator gives a number of Incentives for Biomass Generated Electricity namely

1) Depreciation

2) Feed In Tariffs for 13 Years out of a useful life of 20 Years

3) Sharing of Carbon Credits under the CDM Protocol

4) Preferential Loan and Interest Rates

5) Payment Rebates by Utilities

Some of the state Feed in Tariffs

India does not have a centralized rate of FIT for Biomass Electricity and it is different for different states depending on the assumptions.Here is the FIT for a few of the major Biomass States in India

State                          Feed in Tariff (Rs./kWh)
Andhra Pradesh                  Rs4.15
Gujarat Cogeneration       Rs 5.17
Madhya Pradesh                 Rs3.93
Maharashtra                          Rs4.76
Maharashtra Cogeneration RS4.80
Punjab                                        Rs5.49
Rajasthan                                  Rs4.73
Tamil Nadu                              Rs5.08
West Bengal                             Rs4.88

Biomass Energy in India

India had set up around 500 MW of Biomass Capacity by 2007 and has increased it by almost 150 MW since then to reach around 1 GW capacity today.Most of Indias’ Biomass Electricity is being generated in Andhra Pradesh,Maharashtra,Tamil Nadu,Karnataka and Rajasthan.A lot of new capacity is being built in Punjab and Chattisgarh as well.India with a total biomass capacity of around 1 GW is planning to increase it by 10 times to 10 GW by 2020.Between 200-600 acres of land are required to support 1 Mw of Biomass Capacity .This is much more than what is required for even thin film solar energy which is around 10 acres.The large land requirements make Biomass Energy Scaling a difficult proposition,however it has a great use in niche applications where there is a large amount of crop and animal residue/waste


Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

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