1. EVALUATION STUDY ON PROGRAMME FOR
GRID-CONNECTED BIOMASS POWER, BAGASSE
COGENERATION AND NON-BAGASSE
COGENERATION IN INDUSTRIES
Submitted to
Submitted by
Zenith Energy Services Pvt. Ltd.
Hyderabad-500028

2. OUTLINE OF THE
PRESENTATION
 Introduction
 Central Schemes or CFA Programmes
 Grid-connected Biomass Power Generation
 Bagasse Cogeneration
 Non-bagasse Cogeneration
 Recommendations to CFA Programmes
 Conclusion

3. INTRODUCTION
† Ministry of New and Renewable Energy – Programs on Grid
Connected Biomass Power, Bagasse cogeneration and Non-
bagasse Cogeneration Projects from last 13 years
† The promotional programmes aimed at augmenting
technological awareness and upgradation in these sectors
† New policy for biomass power and bagasse cogeneration is
formulated in 2006 December and updated in 2010
† The policy mainly concentrated on biomass power and bagasse
cogeneration in cooperative sugar mills
† Separate program had been announced for non-bagasse
cogeneration in Industries since 2006
† Couldn't achieve better results in biomass power generation and
non-bagasse cogeneration

4. …..
As on 31st June 2011, the installed capacity that availed CFA
of grid connected biomass power, bagasse cogeneration and
their respective growth

5. CONTINUED….
.
The total installed capacity of
biomass (21%, 1082.6 MW),
bagasse cogeneration (70%,
3613 MW) and non-bagasse
cogeneration (9%, 444 MW)
Although the growth of
biomass power and
bagasse cogeneration
over reached their target
of by 100% and 50%
respectively, on an
overall view the installed
capacity is very low

6. OBJECTIVE OF THE
STUDY
The objective of the study is to evaluate the performance of
the projects installed under the Central Financial
Assistance(CFA) scheme and assess the suitability of
various provisions in the existing scheme and to suggest
changes required, if any.

7. SCOPE OF WORK
 Impact of existing scheme and recommendations whether
to continue this scheme
 Identifying barriers and constraints for three sectors
 Bottlenecks in financing cooperative sugar mills
 Impact and cost benefit analysis of BOOT/BOLT Model
schemes for bagasse cogeneration in cooperative sugar
mills
 Suitable interventions for accelerated development and
promotion of cooperative sector based bagasse
cogeneration
 Amount, pattern, implementation procedure, financial
assistance needs any modification or revision
 Any other modification in the scheme

8. APPROACH AND
METHODOLOGY
 Kick-off meeting was held on 21st October 2011 in MNRE Office
 Methodology of conducting the study was presented, discussed and finalized
 Sampling framework finalized for biomass, bagasse and non-bagasse cogeneration,
 Questionnaires prepared were vetted by the officials
 The study conducted was broadly based on the interviews conducted
with different stakeholders
Sl. No. Type of stakeholder No. of stakeholders
visited
1 Biomass Power Producers 16
2 Financial Institutions/ Experts/ State Level 07
Organizations
3 Bagasse Cogeneration Power Plant Promoters 10
4 Financial Institutions/ Experts/ State Level 14
Organizations
5 Non-bagasse Cogeneration Power Plants Promoters 09
and experts
6 State Nodal Agencies, Utilities 15
Total no. of stakeholders interviewed 69

9. State-wise Survey Status of Grid-connected Biomass, Bagasse and
Non-Bagasse Cogeneration Power Plants in Industries
Sl. No. States SNA Utiliti Biomass Bagasse Non-bagasse
s es
Promoters Expe Organizatio F Promote Organizatio F Is* Promoters Experts
rts ns Is* rs ns
1 Chhattisgarh 1 1 3 - 1 - - - - - -
2 Karnataka 1 - 2 - - - 3 2 - - -
3 Maharashtra 1 1 3 - - - 3 5 - - -
4 Tamil Nadu 1 1 2 - 1 - 2 2 - - -
5 West Bengal 1 - - - - - - - - - 1
6 Haryana 1 1 - - - - - - - 2 -
7 Punjab 1 - 3 - - - - - - 2 -
8 Rajasthan 1 - 2 - 1 - - - - - -
9 Utter Pradesh 1 1 - - - - 2 - - 4 -
10 Andhra 1 - - - - - - - - - -
Pradesh
11 - - 1 - - - - - - - -
12 - - - 1 - 3 - 2 3 - -
Stakeholders 10 5 16 1 3 3 10 11 3 8 1
Total Number of Stakeholders 69

10. PROGRAMS
 National Programme on Biomass Power and Bagasse
CogenerationNational Programme on Biomass Power
and Bagasse Cogeneration – 12 demonstration projects
 Guidance to states in purchasing power from biomass
and bagasse projects – awareness campaigns, capacity
building activities and promotional activities carried out
 Interest subsidies were provided for biomass power,
bagasse cogeneration and other gasification technologies
1993 – 2001
 New initiatives were made for Industrial cogeneration
and megawatt scale gasification plants, along with other
financial incentives
 Cogeneration plants were given subsidy on the basis of
pressure configuration of boilers used.

11. CONTINUED…….
 December 2006 – total program bifurcated into two
components
i. Biomass power / bagasse cogeneration
ii. Biomass gasification and non-bagasse
cogeneration
 Capital subsidy introduced instead of interest subsidy
 cooperative/ public/ joint sector sugar mills, 50% of the
subsidy amount is released to the financial Institutions
after sanction of the loan and the balance subsidy
amount after successful commissioning
 2010 -- MNRE –
 Program on grid-connected biomass and bagasse
cogeneration power plants
 Program on Biomass (Non-bagasse) Cogeneration in
Industries

12. AND BAGASSE COGENERATION POWER
PLANTS
 This scheme is an up-gradation of the scheme that started
in the year 2006, especially encouraging efficient
equipment in biomass and bagasse cogeneration power
plants.
 Main objectives of the program are to promote:
 setting up of biomass power projects with minimum steam
pressure configuration of 60 bar
 cogeneration projects from bagasse in cooperative / public
sector sugar mills with minimum steam pressure
configuration of 40 bar
 bagasse cogeneration projects for in cooperative / public
sector sugar mills with minimum stream pressure of 60
bar and above, taken up through BOOT / BOLT model by
IPPs / State Govt. Undertakings or State Government
Joint Venture Company

13. Central Financial Assistance for Biomass and Bagasse Cogeneration Power
Program Plants
Special Category States Other States
Biomass Power Projects Rs. 25 lakh X (Capacity in MW) ^ 0.646 Rs. 20 lakh X (Capacity in MW) ^ 0.646
Biomass Cogeneration Rs. 18 lakh X (Capacity in MW) ^ 0.646 Rs. 15 lakh X (Capacity in MW) ^ 0.646
(private sugar mills)
Bagasse Cogeneration
projects by Cooperative/
Rs. 40 lakh* Rs. 40 lakh*
Public/ Joint Sector
40 bar & above
60 bar & above Rs. 50 lakh* Rs. 50 lakh*
80 bar & above Rs. 60 lakh* Rs. 60 lakh*
Per MW (maximum support Per MW (maximum support
Rs. 8.0 crore per project) Rs. 8.0 crore per project)
Fiscal Incentives for Biomass and Bagasse Cogeneration Power Plants
Item Description
Accelerated Depreciation 80 percent depreciation in the first year can be claimed for the following equipments
required for cogeneration systems:
(i) Back pressure, pass out, controlled extraction, extraction cum condensing
turbine for cogeneration with pressure boilers
(ii) Vapour absorption refrigeration systems
(iii) Organic rankine cycle power systems
(iv) Low inlet pressure steam inlet systems
Income Tax Holidays 10 years income tax holiday
Customs Duty Concessional customs and excise duty exemption for machinery and components for
initial setting up of the projects
General Sales Tax Exemption is available in certain states

14. PROGRAM ON BIOMASS (NON-BAGASSE)
COGENERATION IN INDUSTRIES
 A common program encouraged biomass cogeneration from
1993 through 2005 along with biomass gasification programs
 The growth of biomass cogeneration had been negligible over
this period of time. In order to encourage the biomass
cogeneration in different industries, MNRE launched a
program on 25th July 2005, known as “Programme on
Biomass Energy and Co-generation (non-bagasse) in
Industry for implementation in 2005-06”
 Subsequently the same program has been followed till 2010
and a new scheme with special emphasis on non-bagasse
cogeneration in Industries has been introduced

15. CONTINUED…..
 Objectives of the program are:
• To encourage the deployment of biomass cogeneration
(non-bagasse) systems in industry for meeting thermal
and electrical energy requirements.
• To promote decentralized/ distributed power generation
through supply of surplus power to the grid.
• To conserve use of fossil fuels for captive requirements in
industry
• To bring about reduction in greenhouse gas emissions in
industry
• To create awareness about the potential and benefits of
alternative modes of energy generation in industry

16. CONTINUED…..
 Scope of the program
• Biomass cogeneration for captive use – at least 50% of power for
captive use
• Other promotional activities -- potential / resource assessment,
preparation of DPRs, organization of seminars / workshops /
conferences, interactive / business meets, awareness creation
activities, and other professional technical services
 Central Financial Assistance (CFA)
• Capital subsidy for Biomass Cogeneration (non-bagasse) projects --
Capital subsidy @ Rs.20.00 Lakhs / MWe would be provided to
promoters
• CFA for organizing promotional program -- CFA up to Rs.3.00 lakh /
event
• CFA up to Rs. 5.00 lakhs, on case by case basis for validation
studies etc.,

17. BIOMASS POWER GENERATION

18. BIOMASS POWER
GENERATION
 It is estimated that the power potential that could be derived from
biomass sector is 17,000 MW
 5% of land use for biomass generation increases the biomass power
potential to 32,000 MW

19. INSTALLED
CAPACITY
 Total Installed Capacity is 1082 MW (As
on 31st December 2011)
The states selected for field survey
(Punjab, Maharashtra, Karnataka,
Chattisgarh, Tamil Nadu, and Rajasthan)
constitute for 76% of the total biomass
power across India with a installed
capacity of 825 MW
Biomass Power Plants Distribution
(December 2011)
State Installed Capacity
Chhattisgarh 239.9
Punjab 50.5
Rajasthan 83.3
Maharashtra 162.5
Tamil Nadu 201.7
Karnataka 87.5
Others 257
Total Capacity 1082

20. FIELD SURVEY OF BIOMASS POWER
PLANTS
Biomass power plants interviewed / visited across the six states for field study
Sl. No. State Name of the power plant visited Capacity (MW)
1 Malwa Power Plant 8.0
2 Punjab Universal Biomass Power Plant 14.5
3 Dee Developers Pvt Ltd 8.0
4 Sri Surya Chambal Power Ltd. 7.5
Rajasthan
5 Kalpataru Power Transmission Pvt Ltd 8.0
6 Eco-fren Power & Projects Pvt. Ltd., 8.0
7 Chattisgarh Sudha Agro Industries Pvt Ltd, Bilaspur. 9.99
8 South Asian Agro Industries Pvt Ltd 10
9 Sri Indra Power Energies Ltd, 6.0
Karnataka
10 Ravi Kiran Power Project Pvt Ltd. 7.5.
11 Sriram Non Conventional Energy Ltd, 7.5
Tamil Nadu
12 MPPL Renewable Energies Pvt Ltd 10
13 A A Energy Limited 10
14 Rake Power Ltd 10
Maharashtra
Indu-bharat Energies Maharashtra
15 20
Limited
16 Gujarat Amreli Power Projects 9.99

21. CONTINUED………
Other Stakeholders Interviewed
Financial Institutions
Sl. Name of the Institution/
No. City
Organization
1
3rd Floor, August Kranti Bhawan, – 110 066. Tel: +91
IREDA
11 26717400 – 26717413
2
Power Finance Corporation Ltd. 'Urjanidhi', 1,
Power Financial Corporation – PFC
New Delhi.
3 Asian Development Bank (ADB) Plot 4, San Martin Marg, Chanakyapuri
State Level Organizations
1
Rajasthan Biomass Power Producers Jaipur Office: C-30, , C Scheme, Jaipur.
Association
2
Plot No 30, Opposite Bank of ,Road No 1, Film Nagar,
Biomass Developers Association
Jublee Hills, .
3
Chhattisgarh Biomass Energy C-33, Third Floor, Ashoka Millennium,. Ring Road
Developers Association No.1, Rajendera Nagar Chowk,
4 IPPAI New Delhi
5 Indian Biomass Power Developers
New Delhi
Association
Experts
1 Dr G C Dutta Roy Dalkia Energy Services Ltd

22. WORKING STATUS OF BIOMASS POWER
PLANTS
• Out of 825.4 MW surveyed, 260 MW (32%)
power plants are in poor operating condition
or are operating at lower PLF ranges of below
25% or in a shut down state
• There are around 350 MW of registered
biomass power projects which are stuck due
to lack of finance in the state of Rajasthan
and 15 projects of 150 MW are going through
the same condition in the state of
Chhattisgarh

23. EVALUATION OF BIOMASS POWER PLANTS
 The evaluation of biomass power plants is categorized into the
following:
 Biomass as a fuel
 Operations and Maintenance
 Power Purchase Agreement and Tariff Rates
 Biomass power plants are surveyed for biomass related evaluation and
for operations and maintenance issues
 While respective SERCs are approached and latest petitions filed by
different biomass players are analyzed for biomass power tariffs and
power purchase agreement related issues

24. EVALUATION/ ANALYSIS OF FUEL RELATED
ISSUES
 The biomass related problems are evaluated on two parameters, namely:
 Assessment, procurement, storage and competition for biomass as fuel
 Price of biomass
 The sources of biomass availability are:
 Farmers
 Agents
 Biomass Collection Canters from IPP
 Sources of fuel are not authenticated and the fuel is stored by the agents for a price rise
 Procurement and storage losses from biomass storage are around 5%
 Competition – Increasing competition from other sectors like brick kilns, cement plants,
thermal power plants, oil mills, and rice mills making biomass unviable for power
production alone
 Price of the biomass fluctuates very highly from Rs.1,500 / ton during season to Rs. 3,000 /
ton during off season of crops
 Rise of fuel prices, assessment, procurement, storage practices are assessed directly by
visiting the biomass power plants

25. OPERATIONS AND
MAINTENANCE
Station Heat Rate (SHR) and Gross Calorific Value (GCV)
 Station Heat Rate (SHR) is the measure of amount of energy in terms of kCal
required to generate one unit i.e., kWh of electricity
 It is the product of GCV of the biomass to the specific fuel consumption of the
power plant
 SHR and GCV plays a vital role in understanding the health of a biomass power
plant
 SHR is observed and studied from different petitions from different SERCs
 Skilled manpower procurement and retention is another problem faced by the
biomass power producers
 There are no skilled workers in the area and as the number of power plants
are increasing the need for skilled manpower is increasing day-by-day leading
to lower retention rates at different biomass power plants

26. PPAS AND TARIFFS
 PPAs are being made for about 10 to 13 years with respective DISCOMS
 Tariff rates are determined by the SERCs and the same are revised from
time to time
 Prevailing tariff rates and the payment related issues with respective
SERCs are discussed with the promoters. The major parameters taken
into consideration are:
 Tariff rate determination problems are collected from both SERCs and
the IPPs and other stakeholders introduced
 Problems pertaining to the delayed payments from the DICOMS
 Tripping of the power lines

27. EXISTING STATE LEVEL POLICIES FOR BIOMASS
POWER GENERATION
 State of Rajasthan has special policy for biomass power generation
 The major and important aspects of the policy are:
 Reservation of Area for Biomass Power Plants
 Policy for plantations
Sl. No. Capacity (MW) Area Reserved (Radius in km)
1 5 60
2 5 - 7.5 75
3 7.5 – 10 80
4 10 – 12.5 85
5 12.5 – 15 90
6 15 – 20 100
 Promotion of development of Prosopis-Juliflora / other energy
plantation on Government land for use as supplementary fuel in
Biomass Power Plants

28. BARRIERS AND CONSTRAINTS
 The major barriers and constraints that were identified
are:
 Technical barriers
 Institutional / regulatory barriers
 Financial barriers
 Technical Barriers
 Lack of quality biomass assessment study
 Lack of standardized methodologies and guidance
 Biomass assessment a low cost service
 Inadequate fuel collection, distribution and supply mechanism
 Competition for biomass and price rise
 Availability, training and retention of skilled manpower
 Lack of standardized SHR and GCV rates

29. CONTINUED………
 Institutional / Regulatory barriers and constraints
 Power Purchase Agreement (PPA)
 Lack of short term PPAs with Biomass Power Plants
 Tariff related issues
 Lack of standard biomass price assessment mechanism for
determination of the biomass tariffs
 Zoning of the region
 Irregular zoning practices and self violating policies
 Sizing of the power plant
 Improper sizing of the power plant leading to competition for the same
amount of biomass available
 Financial barriers and constraints
 Lack of interest from financing institutions
 Delayed bill payments by more than six months

30. RECOMMENDATIONS FOR OVERCOMING BARRIERS
IDENTIFIED
 Inline with the above barriers identified, recommendations
are made, they are:
 Technical aspects
 Institutional and regulatory aspects
 Financial Aspects
 Technical Aspects
 Biomass Assessment
 Establishment of standards and single format reporting for biomass
surplus across the country
 Triangulation of data
 Through secondary sources – local agricultural departments
 Through strong and robust ground level study
 Through data from a satellite regarding the biomass availability
 Biomass procurement
 Efficient fuel collection mechanism through licensed depots and briquetting
units
 Backed up by the exact biomass assessment reports, traders of biomass should
be licensed and regulated sale and purchase of biomass should be ensured.

31. CONTINUED……………
 Storage of biomass
 Encouragement of briquetting units that would reduce the space required for
biomass storage by making biomass briquettes
 Competition and pricing
 Biomass prices should be monitored meticulously and that coupled with
ascertained tariff revisions would ensure smooth increase in the biomass
assessment
 the supply mechanism should be molded into a shape from the existing raw
form, depending upon which the future biomass capacity addition should be
assessed accurately
 Sizing of the project
 Restriction on the size of the project should be put so as to achieve the fullest
potential
 Institutional and regulatory aspects
 Power Purchase Agreement and Tariff Revision
 When the SERCs delay in paying power bills there should be PPA exit strategy for
biomass power plants
 Short term PPAs should be encouraged for biomass power plants
 Tariffs should be revised periodically depending upon the annual reports from
biomass assessment studies

32. CONTINUED………..
 Plantation backed biomass power plants should be
encouraged by Generation Based Incentives (GBIs)
 No biomass power plants should be licensed without plantation
backup in the states like Chhattisgarh and Rajasthan
 Efficient Land allocation mechanism should be made for the biomass
 Financial Aspects
 Efficient bill payments should be ensured from the SERCs to their
respective clients
 Proper biomass potential assessment practices should be established
so as to identify and invest in the right area
CFA Related Recommendations
a central policy should be made regarding the biomass channel
management as fuel for biomass power plants
 It is noted that the impact of Central Financial Assistance is very less
or negligible and needs a turnaround towards becoming a
comprehensive policy ensuring standardized biomass assessment,
channel management, which would be determining the future course
of biomass power plant industry in India

33. BAGASSE COGENERATION

34.  Cogeneration is defined as the coincident generation of
useful thermal energy and electrical power from the same
fuel input
 The sugar manufacturing process requires a large
quantum of thermal energy in the form of steam and also
the bulk of steam required for processing is needed at the
low pressure
 Conservative estimates suggest a potential of over 5,000
MW from cogeneration plants in India
 The total installed capacity of bagasse plants in India as
on 30th July 2011 is 3613 MW

35. HISTORY OF THE BAGASSE COGENERATION
PROJECTS
 Before 1970s, steam generation pressures / temperatures
were low, boiler / turbine efficiencies were low, steam
requirements for process were high and hence the mills
were neither self sufficient in their steam requirements,
nor in electricity
 Over the years, more efficient equipment was adopted and
by 1990s, mills started to not only become self sufficient in
steam and electricity, but they even had some surplus
bagasse
 Ever since 1993 – 94, MNRE has been the vanguard of its
promotion
 Over the last two and a half decades, biomass power has
become an industry, attracting annual investments of over
Rs. 1,000 crore, generating more than 700 Crore units of
electricity and creates employment opportunities of more
than 10 million man days, all in rural areas

36. TECHNOLOGICAL EVOLUTION
 Technological evolution of bagasse cogeneration
Period Mill Steam Electricity Bagasse Electrical Boiler Specific
Capacity Pressure/ Generation Self Self Efficiency Steam
(TCD) Temp. (MW) Sufficiency Sufficiency Consu-
(Bar/oC) (MW) mption
1970 <1000 11/200 0.5 -15% -0.5 <50% 20
1980 >1250 21/380 1.5 -5% -0.8 <55% 15
1990 2500 45/440 3.5 5% 0 60% 8
2000 5000 64/485 22-24 – 18 >70% <5.8
2004 >5000 84/510 25-30 – 25 – –
2007 >5000 105/525 ~35 – ~30 – –
2011 >7000 110/525 ~36 18% ~33 80% 1.5
 Power Generation and steam generation from power
Steam Cycle Steam Production Power Generation Bagasse Required
( Bar / OC ) ( Tons ) ( kW ) ( Ton / MWh )
21/340 2.50 227.3 4.5
32/380 2.43 286 3.5
42/400 2.40 313 3.2
45/440 2.33 328 3.0
67/480 2.27 378 2.6
87/510 2.24 401 2.5
110/535 2.21 427 2.3

37. PROJECTS
o The total installed capacity of
bagasse cogeneration power
plants in India is 3613.25 MW
o Out of 3613 MW installed, the total
capacity that availed subsidy is
1802 MW

38. BUSINESS MODELS EVOLVED IN INDIA
 The success of bagasse cogeneration is not only
dependent on the choice of technology, but also on the
soundness of the business model that ensure steady
revenue stream
 This revenue stream helps sugar mills to overcome
inherent fluctuations in the sugar market so much so
that some sugar mills consider themselves to be in the
business of producing electricity in which sugar is being
considered only as a by-product by them
 Various investment models evolved are:
 Own Investment Model
 IPP-BOOT Model
 Joint Venture (JV) Model
 SPV Model
 Joint Venture / IPP Cooperative Mill Models

39. EXISTING SCHEMES ON BAGASSE COGENERATION
POWER PLANTS
 Maharashtra –
 Tariff of Rs. 3.05 / kWh and 2% compound escalation
 Launch of “Urjankur Trust” scheme
 As per this scheme, the Cogeneration power plants can avail of
financial assistance as under:
 Own Investment: 10%
 Loan from Financial Institutions: 60%
 Assistance from Sugar Development Fund (SDF): 30%
 Other FIs supporting bagasse cogeneration are:
 IREDA
 SDF
 NCDC
 HUDCO

40. FIELD SURVEY OF BAGASSE COGENERATION
PLANTS
Categorization of Stakeholders Interviewed
Sl. No. Type of Stakeholder No.
1 Bagasse cogeneration power plant promoters interviewed 10
2 Financial Institutions/ experts/ state level organizations interviewed 14
Total Number of Bagasse Cogeneration Power Plant Stakeholders 24
List of Bagasse Cogeneration Power Plants Visited
Capacity
Sl No State Name of the Power Plant Visited
(MW)
1 Kranti SSK 11
2 Maharashtra Datta SSK 36
3 Someshwar SSK 18
4 Indian Cane Power Ltd 28
5 Karnataka Hiranyakshi SSK 26
6 Renuka Sugars 38
7 Dhampur Sugar Mills 30
Uttar Pradesh
8 Mawana Sugar Mill. 20
9 Kothari Sugars & Chemicals Ltd 11
Tamil Nadu
10 Shakti Sugars Ltd 35

41. List of other Stakeholders Interviewed
Financial Institutions
Sl No Name of the Financial Institutions Corporate Office
1 National Cooperative Development Cooperation (NCDC) New Delhi
2 NFCSF New Delhi
3 IFCI Ltd – SDF New Delhi
State & Central Associations
1 The South Indian Sugar Mills Association Banglore
2 Indian Sugar Mills Association New Delhi
3 Sugar Technologies Association of New Delhi
4 The Federation of Co-op. Sugar Mills Ltd Chandigarh
5 The Federation of Co-op. Sugar Factories Ltd. Banglore
6 Co-operative Sugar Factory Federation Mumbai
7 Commissioner of Sugar () Pune
8 Cogeneration Association of (COGEN ) Pune
9 The Sugar Factories Association Mumbai
10 The Bombay Sugar Merchants Association Ltd. Navi Mumbai
11 Tamilnadu Co-op. Sugar Factories Federation Ltd. (TNCSF) Chennai

42. TECHNICAL AND FINANCIAL
EVALUATION
 Technical parameters involved in study are:
 Boiler and turbine specifications
 Specific Consumption of Fuel
 Fuel Linkages
 Seasonal utilization of bagasse available
 Off seasonal Fuel Linkages
 Generation based details
 Generation during season and off season
Financial parameters involved in study are
 Funding pattern of the project
 Financial business model adopted
 Financial performance of the project by financial parameters
like
 IRR
 Payback period
 DSCR

43. IDENTIFIED
 The major barriers and constraints that were identified
are:
 Technical barriers
 Institutional / regulatory barriers
 Financial barriers
 Technical Barriers
 Limited capacity of sugar mills
 Lack of trained man power
 Biomass / Bagasse pricing
 Institutional/ Regulatory Barriers
 Institutional and political nature of cooperative mills
 Long gestation period
 High management risks
 Irregularities in tariff / payment defaults
 Financial Barriers
 Lack of financial strength of the sugar mills
 Limited access to funds and difficulties in raising equity

44. COOPERATIVE SUGAR MILLS AND COST
BENEFIT ANALYSIS

45. ADVANTAGES OF THE BOOT/ BOLT
MODEL
 All the risks are borne by developer who
brings fund raising capabilities and project skills
 Monetary benefits to sugar mill in addition to power
and steam supply without any equity participation
 Sugar mill could be incentivized for improved operational
efficiency
 No difficulty in raising small size of capital
 Faster project implementation

46. COST BENEFIT ANALYSIS OF BAGASSE
COGENERATION
Details of the project developer and the host sugar factory
Name of the developer of the project Shri Renuka Energy Limited
Address Havelock Road, Cantonement, Belgaum
Deshbhakta Ratnappanna Kumbhar
Name of the Host Sugar Factory Panchaganga Sahakari Sakhar
Karkhana
A/P Ganganagar, Hatkanangle,
Address
Kolhapur, Maharashtra
Power Generation details of Bagasse Cogeneration Power Plant
Generation Details Seasonal Off Seasonal
Operation of Cogeneration Plant days 180 Days 75 Days
Capabilities of cogeneration plant
i) Power Generation 106105 kW 39789 kW
ii) Captive power 40653 Kw 37 kW
iii) Net Exportable power 65452 kW 35810 kW
iv) Exportable power 65.45 MU* 35.81 MU*
v) Total power exported 101.26 MU*

47. CONTINUED……
Details of Total Project Cost Rs. In Million
Sl. No. Description Amount
1 Civil works 74.50
2 Mechanical equipments 603.30
3 Electrical Equipment 126.80
4 Sugar Plant Modifications 59.50
5 Taxes and Duties – 18% 155.54
6 Transportation of Equipment – 3% 23.69
Total plant & machinery 1,043.33
7 Consultancy, and project management 20.87
8 Contingency @10% 106.42
9 Interest during construction 29.27
Total Project Cost 1,199.88

48. ..
 Revenue for the project and other details
 Revenue is generated at the rate of Rs. 3.05/ unit with an
escalation of 2% per annum
Vital Financials of the Project Rs. In Million
Sl. No. Criteria Amount
1 Revenue generated per annum 198
2 Cost incurred over the project 1,199
Cost incurred over the project for
3 12
the first year
4 IRR of the project 12 – 16 %
5 DSCR of the project 1.75 -- 2.5 %
6 Payback Period of the Project 6 – 8 Years

49. RECOMMENDATIONS FOR BAGASSE
COGENERATION PROJECTS
 In accordance with the above evaluation and barriers
identified the recommendations are variegated as:
 Technological aspects
 Institutional aspects
 Financial aspects
 Technological aspects
 Awareness on Technology Up-gradation
 Training programs to ensure more manpower
 Bagasse / biomass pricing
 Institutional aspects
 Conducting awareness programs
 Financial aspects
 Extending SDF funding
 Timely payment of bills by SEBs
 PPA - Provision to exit from PPA with SEB

50. POLICY INTERVENTIONS FOR DEVELOPMENT OF
COGENERATION IN COOPERATIVE SUGAR MILLS
 Revision on CFA for bagasse industries
 For private power plant, the existing CFA should be continued
 Cooperative sugar mills the CFA should be increased at least up
to 5%
 Awareness generation
 MNRE may seriously consider supporting conduction of
awareness raising events, information dissemination campaigns
regarding technologies, potential for cogeneration, benefits of
cogeneration (profitability, environmental & social, etc),
 Continuation of the scheme
 Existing scheme for cooperative sugar mills should be continued
in future
 Encouragement of biomass plantations
 Reduction of off seasonal coal usage
 Plantation based services should be encouraged and Model
Projects should be asked for

51. NON-BAGASSE COGENERATION

52. INTRODUCTION
 Non-bagasse cogeneration has been gaining ground in
Indian biomass power production scenario gradually and
most of the times this phenomenon has not been observed
and recorded
 Most of the industries that generate steam for industrial
processes are using biomass as fuel, at least partially on
the basis of availability of biomass in their boilers

53. GROWTH OF THE NON-BAGASSE
COGENERATION
o The total installed capacity
of non-bagasse cogeneration
power plants in India is
444.23 MW as on 31st
December 2011
 The major state where non-
bagasse cogeneration is
prevalent is Uttar Pradesh,
West Bengal, Punjab,
Haryana, and Andhra
Pradesh

54. EVALUATION OF NON-BAGASSE
COGENERATION
The biomass (non-bagasse) cogeneration
power plants are evaluated on three
major areas pertaining to the study; they
are:
oTechnical evaluation
o Financial evaluation
o Institutional/ Regulatory/ Policy
List of non-bagasse cogeneration power plants
interviewed in the study
Sl. Capacity Major observations of the evaluation
State Name
No. (MW)
PLF >90%
1 Bharat Starch Industries Ltd 2.0
Haryana
2 Sainsons Paper Industries Ltd 3.0 Specific Fuel 2.5 to 4.3 kg /
3 Shreyans Industries 3.5 Consumption kWh
4 ABC Paper Ltd 10.0
Payback 5 – 8 years
5 Yash Papers Ltd 6.0
6 Uttar Lakshmi Cotton Mills 8.0 Cost / kWh of Rs. 2 – Rs. 3
7 Pradesh Rama Papers Ltd 6.0 power produced
8 Mohit Papers Pvt Ltd 4.5
IRR 12 – 16%
9 Verde Renewables Pvt. Ltd -

55. BARRIERS AND CONSTRAINTS
 The major barriers and constraints that were identified
are:
 Technical barriers
 Institutional / regulatory barriers
 Financial barriers
 Technical Barriers
 Biomass assessment for accurate assumptions of biomass usage in Non-
bagasse cogeneration Industry
 A harbinger in understanding the utilization of biomass in a given area
 Biomass procurement and prices
 Lack of up-gradation of technology
 Availability, training and retention of skilled manpower
 Institutional / regulatory barriers
 Lack of success stories
 Lack of state level and industry wide awareness

56. RECOMMENDATIONS FOR NON-BAGASSE COGENERATION
PROJECTS
 In accordance with the above evaluation and barriers
identified the recommendations are variegated as:
 Technological aspects
 Institutional aspects
 Financial aspects
 Technological aspects
 Efficient biomass assessment
 Technical up-gradation
 Institutional aspects
 Revision on CFA for non-bagasse industries
 Suitable awareness campaigns

57. EVALUATION OF CFA
PROGRAM
Sl. Topic Grid connected Biomass
Bagasse Cogeneration Non-bagasse cogeneration
No. discussed Power Generation
1 Utilization of All the biomass plants availed The private sector bagasse Only half of the promoters availed
fiscal the subsidy cogeneration power plants subsidy, which due to lack of
subsidy utilized the subsidy awareness
2 Impact of • Very low impact because • Has very good impact on • Impact on the industry is
CFA over CFA schemes concentrate the sector and the poor. Central scheme could
the sector on technology upgradation, schemes taken up are not permeate the techno-
while the major barrier for successful commercial barriers
this sector is arising out of • Now the policy may associated with industry
fuel pricing uncertainty concentrate on specific complexity of this
cooperative sugar sector
factories and low capacity
bagasse cogeneration
power plants
3 Barriers / CFA scheme is more being There are no major deviations CFA scheme is only catering for
constraints lopsided towards technology in the design and technological upgradation rather
in the upgradation implementation of scheme for than overall sector level
scheme bagasse cogeneration industry assessment
4 Need for • Not needed for non- • Needed for bagasse • No revision of CFA scheme is
revision of plantation based bagasse cogeneration power plants required
the subsidy cogeneration projects backed up by the
• Encouraged for plantation plantations
backed biomass power
plants

58. RECOMMENDATIONS OF CFA PROGRAMMES
Grid connected
Sl. Topic Bagasse Non-bagasse
Biomass Power
No. discussed Cogeneration cogeneration
Generation
1 Recommended • Standardizing the • Need for MIPs in • Sector specific, state
measures for distribution and small capacity based specific and cluster
increasing the collection mechanisms bagasse cogeneration specific studies should be
effectiveness of biomass power power plants encouraged
of the scheme plants • Awareness programs • Awareness programs
• Encouraging biomass and technology up regarding the updated
Plantations gradation oriented technologies should be
• continuing the existing financial incentive encouraged
scheme for schemes for bagasse
technological up- cogeneration in
gradation cooperative sugar
• Controlled licenses of mills
new power plants • Encouraging biomass
• GBIs for plantation Plantations for off
backed power plants seasonal fuel linkages
• Existing scheme
should be continued for
the new power plants
with careful biomass
assessment studies