Thermal power plants will soon face penalty for failing to co-fire biomass pellets: Power Secretary

New Delhi: Thermal power plants will soon have to start co-firing of biomass pellets or face penalty, said Power Secretary Alok Kumar on Friday. Addressing the inaugural session of a National Conference on Biomass ‘3P-Pellet to Power to Prosperity’ in New Delhi, Kumar said that in the absence of a mandate, there was an inertia on part of these bodies to push for greater use of biomass pellets. However, once they are mandated to do so, the cost of production of electricity will levelise for all gencos. “We are committed to protecting the planet we live on and to bringing down our carbon emissions. And to that end, it is important that even if it costs more, we take to ways that help us meet those goals,” said the Secretary.

He also urged state-run NTPC Limited to develop a market platform where biomass pellet manufacturers can declare the availability and the quality of pellets available with them.

Intermidiary govt company required to connect all stakeholders: MoS Power

Delivering the inaugural speech, Minister of State (MoS) for Power Krishan Pal Gurjar said that there was a need for a company to connect all the stakeholders in the value chain — biomass producers, pellet manufacturers and power plants. The view was also echoed by the Power Secretary who said that an intermediary government company was required to facilitate the procurement of biomass and develop a supply chain for the biomass pellet sector.

The Power Secretary also stressed on the need for developing a benchmark pricing for biomass pellets so that manufacturers are assured of the value of their product. Currently, while private industries in sectors like pharma, cement, FMCG procure biomass pellets between Rs 7-10/kg, while thermal power plants procure it for Rs 2-2.5/kg.

NTPC ready to buy biomass pellets: CMD

Addressing stakeholders at the conference, NTPC CMD Gurdeep Singh urged biomass pellet manufacturers to come forward, adding that the PSU is ready to procure from them. “NTPC was the first to demonstrate in 2017 that co-firing up to 5-10 percent can be taken without making any changes to the boiler. We started this pilot project in NTPC Dadri. We have come out with tenders time and again. We had no criteria for any individual to register as an applicant. If you want to sell at rates higher than the discovered rate, we are ready to procure that as well. But we want you to come forward and share your concerns with us,” said Singh.

Biomass pellets and co-firing

Biomass pellets are produced from agri-residue of all kinds and can be used for co-firing with coal in thermal power plants. According to government figures, so far about 1 lakh MT of biomass has been co-fired in more than 41 Thermal Power Stations. Apart from thermal power stations, all industries around Delhi NCR have switched to biomass pellets as coal has been banned to maintain air quality.

However, the adoption of biomass pellets for co-firing in power plants is yet to gain pace. At an inter-ministerial review meeting held in October last year, it was found that in the NCR region, 10 TPPs had started co-firing. However, the amount of biomass co-fired was still lagging, the government had said in a statement after the meeting. Until October 2022, 83,066 MT of biomass had been co-fired in 39 thermal power plants across the country totalling to a capacity of 55,390 MW. In NCR region, the biomass co-fired was 22,696 MT, out of which 95 percent had been done by NTPC. Further, 99 percent of the PO in place had been contributed by NTPC Ltd. The procurement of biomass pellets by state gencos is negligible.

(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Google News. Click here to follow. Also, join PSU Watch Channel in your Telegram. You may also follow us on Twitter here and stay updated.)