New Delhi: A slew of actions taken by the Ministry of Power for procurement of biomass has resulted in a spate of orders of bio-mass by NTPC and different states. NTPC placed order for 8,65,000 tons biomass pellets for which supply is already in progress. Further, NTPC has placed an additional order of 65,000 tons in October 2021. Another tranche of procurement for 25,00,000 tons is in progress for which vendors are invited to submit offer by 1st November 21.
The states of Haryana, Punjab and UP are together procuring about 13,01,000 tons of biomass pellets for co-firing in their power plants. The orders are expected to be finalized in November 2021. This has emerged following Secretary for Power Alok Kumar’s review meeting on 28 October on status of bio-mass co-firing in the thermal power plants. The meeting was attended by Central Electricity Authority, Gurdeep Singh, Chairman & Managing Director of NTPC, representatives of Punjab, Haryana, UP, mission director – Nation Bio Mission and senior officials of the Ministry of Power. The Ministry of Power has set up the National Mission on use of Biomass in coal based thermal power plants, to address the issue of air pollution due to farm stubble burning and to reduce carbon footprints of thermal power generation.
The Ministry issued a modified policy on 8 October, 2021 on biomass utilisation for power generation through co-firing in coal based power plants. In the earlier policy issued on 17 November, 2017, it was advised that coal based thermal power plants, except those having ball and tube mill, of power generation utilities, to endeavor to use 5-10% blend of biomass pellets made, primarily, of agro residue along with coal after assessing the technical feasibility, viz. safety aspect etc.
In order to further support the energy transition in the country and to achieve the target of cleaner energy sources, the modified policy would provide the necessary direction in achieving the desired goals. The policy mandates all thermal power plants to use 5% blend of biomass pellets made, primarily, of agro residue along with coal with effect from one year of the date of issue of this guideline. The obligation shall increase to 7% (except for those having ball and tube mill the use of biomass remain 5%) with effect from two years after the date of issue of this order and thereafter. It has been advised in the policy that minimum contract period for procurement of biomass pellets by generating utilities shall be for 7 years so as to avoid delay in awarding contracts by generating companies every year and also to build up long term supply chain.
On provisions related to tariff determination and scheduling, for projects set up under Section 62 of the Electricity Act 2003, the increase in cost due to co-firing of biomass pellets shall be pass through in Energy Charge Rate (ECR). For projects set up under Section 63 of the Electricity Act 2003, the increase in ECR due to biomass co-firing can be claimed under change in law provisions. Such additional impact on ECR shall not be considered in deciding Merit Order Despatch (MOD) of the power plant. Obligated entities such as DISCOMS can meet their Renewable Purchase Obligations (RPO) by buying such generation of co-firing.
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