I N D I a Financing Pathways to Re-Kindle Growth

IREDA IS/ISO 9001: 2008 Certified JULY-SEPTEMBER 2015 VOLUME 1 ISSUE 5 (A Mini Ratna Category-I, PSU) INDIAN RENEWABLE ENERGY DEVELOPMENT AGENCY LIMITED FINANCING AND PROMOTING SELF-SUSTAINING INVESTMENT IN ENERGY GENERATION FROM RENEWABLE SOURCES, ENERGY EFFICIENCY AND ENVIRONMENTAL

TECHNOLOGIES FOR SUSTAINABLE DEVELOPMENT. A QUARTERLY MAGAZINE ON BIOMASS ENERGY PUBLISHED UNDER THE MNRE-UNDP I GEF BIOMASS POWER PROJECT OPERATIONAL AREAS DEVELOPMENT ACTIVITIES NEW INITIATIVES Loan Sanction Rs. in Cr. I N D I A • Wind Energy • Investor's Manuals • Securitization 4500 4000 3818 • Solar Energy • Business Meets 3747 against receivables 3500 3401 3126 • Hydro Power • Administrating MNRE Schemes • Financing IFFs/SPVs 3000 • Biomass Power SCHEMES • Consortion / Co-finance 2500 Availability and accessibility • Energy Efficiency & Conservation • Take-over Loan from Banks/FIs • Performance 2000 1823 • Cogeneration • Project Financing Grantees 1500 1490 1000 826 of capital key for meeting • Waste to Energy 589 • Equipment Financing • Consultancy & 506 • Power Evacuation System 500

2006-7 2007-8 2008-9 2009-10 2010-11 2011-12 2012-13 2013-14 2013-14 the 2022 RE target • Bridge Loan against SDF Advisory Services 0

Role of IREDA

Dedicated FI for Renewable Energy Rooftop Solar PV P Pioneered RE Financing in the country (Industrial, Commercialower Projects & Catalyzed Banks & FIs to finance RE Institutional R LENDING TERMSRs. 50 Lakh Loan : upto 75% of ooftops)project cost Developed Innovative financing models Interest : Min. Loan: 9.90% to 10.75% upto 75% of project Cost Moratorium: Loan: 11.50% p.a. on wards 6 to 12 months upto 12 months Repayment : Interest: upto 10 years Upto 9 years Moratorium: Repayment: Innovative financing schemes Integrated approach will help putting the sector on road to unlock the potential recovery * updated as on 14.07.2015

Corporate Office: 3rd Floor, August Kranti Bhawan, Bhikaiji Cama Place, New Delhi-110 066 Tel.: 26717400-26717412, Fax No.: 26717416, e-mail : [email protected] Financing Pathways to Re-kindle Growth Registered Office: India Habitat Centre, East Court Core-4A, 1st Floor, Lodhi Road, New Delhi - 11 00 03 Tel: +91 11 24682206 - 24682219 Fax: +91 11 24682202 A QUARTERLY MAGAZINE ON BIOMASS ENERGY PUBLISHED UNDER THE MNRE-UNDP I GEF BIOMASS POWER PROJECT I N D I A

CHIEF PATRON Piyush Goyal Hon’ble MOS (IC) for Power, Coal and Subscribe New and Renewable Energy, Government of India

PATRON Upendra Tripathy In this Issue BioPower India is a quarterly magazine covering technological, operational, financial and regulatory aspects of various Secretary, Ministry of New and Renewable Energy, biomass conversion technologies such as combustion, cogeneration, gasification and biomethanation. Biomass specific Government of India project perspectives, technology innovations, industry/market outlook, financial schemes, policy features, best practices and successful case studies, etc. are also included in the publication EDITORIAL BOARD Ms. Varsha Joshi, Joint Secretary & National Project Director, MNRE Ms/Mr/Dr ...... Organization ...... D K Khare, Director, MNRE K S Popli, CMD, IREDA Designation ...... S N Srinivas, Programme Officer (E&E Unit), UNDP Address ...... EDITOR ...... V K Jain, Director and National Project Coordinator, MNRE Tel: ...... Mobile: ...... Fax: ...... ASSOCIATE EDITOR Email: ...... Web: ...... Tanushree Bhowmik, National Project Manager, MNRE/PMC SUBSCRIPTION RATES One year (4 issues) Rs 600 / USD 20 COPY DESK Manoj Kumar M, Technical Officer, Kindly send your subscription/advertisement information along with cheque/demand draft drawn in favour of ‘GEF MNRE/PMC Biomass Power Project’. (All outstation requests need to be in the form of Demand Drafts only) CONTENT AND PRODUCTION SUPPORT Please send your feedback/subscription/advertisement to: Sustainability Outlook Project Management Cell (PMC) Division of cKinetics Consulting Services Pvt Ltd Ministry of New and Renewable Energy 708 Hemkunt Chambers, 89, Nehru Place Block 14, CGO Complex, Lodhi Road, New Delhi - 110 003 New Delhi -110019 Telefax : 011-2436 9788. Website : www.mnre.gov.in EDITORIAL OFFICE Project Management Cell (PMC) LEAD ARTICLE IN CONVERSATION WITH 04 - Financing Pathways to Re-kindle 21 - Ms. Namita Vikas, YES Bank Ministry of New and Renewable Energy Growth in the Bio-Power Sector Block 14, CGO Complex Lodhi Road, New Delhi - 110 003 INDUSTRY SPEAK Call for Articles Telefax: 011-2436 9788 IN CONVERSATION WITH 24 - Make Renewable Energy Technologies Website: www.mnre.gov.in 09 - Mr. KS Popli, IREDA Work Together to Create True Impact, BioPower India invites articles from academicians, industry experts, investors, researchers, implementers, policy Email: [email protected] Growth and Prosperity: makers, and other stakeholders to share their experiences, expertise, and opinions in matters related to harnessing Article by Boson Energy biomass energy and power in an efficient and cost-effective manner. PUBLISHER SPOTLIGHT 12 - Feedstock Management and Ministry of New and Renewable Energy Integrated Operations Key to POLICY UPDATES BioPower India will accept material submitted only in softcopy. Use “Submission” as the subject line of the email. The Stability and Profitability of Biomass 28 message should include (1) the author’s name, (2) the title of the article, and (3) any relevant information about the PRINTED AT Power Sector: Varam Power Projects author, including institutional affiliation, mailing and e-mail addresses. Fortune Print Services MISSION ACTIVITIES Okhla Industrial Area, Phase-1 31 - Regional Workshop on Policy and New Delhi IN CONVERSATION WITH 16 - Mr. SB Nayar, IIFCL Regulatory Framework for Biomass Power Generation, Bhubaneshwar, DISCLAIMER Odisha Call for Advertisement The views expressed by authors INDUSTRY SPEAK including those of the editor in the 18 - Targeted Interventions Needed to BioPower India invites organizations and corporate establishments to advertise their profiles and products in the magazine are not necessarily the views Re-build Investor Sentiment for AROUND THE WORLD of MNRE or cKinetics. 33 magazine. Special discount is available for placing advertisements in more than two issues. Biomass Power Sector: - Latest News Article by Dee Piping Systems - Datebook COPYRIGHT PMC/MNRE–UNDP/GEF 2015 For further details, please contact [email protected] A QUARTERLY MAGAZINE ON BIOMASS ENERGY PUBLISHED UNDER THE MNRE-UNDP I GEF BIOMASS POWER PROJECT I N D I A

CHIEF PATRON Piyush Goyal Hon’ble MOS (IC) for Power, Coal and Subscribe New and Renewable Energy, Government of India

Dear Readers, Welcome to the July-Sep 2015 Issue of BioPower From our readers India! Our theme for this issue is “Financing Pathways to rekindle growth in the bio-power It is indeed a great initiative and effort in the right direction. The need for this kind of sector”. India, in its recently submitted Intended initiative was being felt since long. Nationally Determined Contributions (INDC) to the UNFCCC, has reinforced its commitment of Congratulations to the Editorial Team for a nice coverage. increasing the power generation from renewable With regards, energy sources. One of the key ingredients to Yours sincerely, ensure we achieve the government’s target of 10GW for biomass power, is ensuring adequate financing. As most of our readers are Anand Chopra, Sr. Vice President aware, the biomass power sector has witnessed a chequered growth in Kalpataru Power Transmission Limited the last few years. Sep 3, 2015 Through this issue, it is our endeavour to share current innovations as well as potential pathways to re-kindle investor sentiment for the biomass power sector thereby improving its growth prospects. The lead article presents a scenario analysis comparing the potential credit availability vs requirement to meet the set target and discusses approaches which can be potentially adopted to re-build investor sentiment. In our conversation with Mr. KS Popli, Chairman and Managing

rom the Editor Director, IREDA, he discusses the new refinancing scheme formulated by IREDA for reviving existing biomass power projects which have been

F non-operational due to fuel availability and tariff concerns. The spotlight in this issue is on Varam Power Project’s 6MW biomass power plant in Andhra Pradesh which completed 13 years of operations successfully even as the biomass cost and feedstock availability varied drastically over the years. The issue also features role of innovative financing instruments to promote renewable energy in India through our conversation with Mr. SB Nayar, CMD, IIFCL and Ms Namita Vikas, Senior President and Country Head – Responsible Banking, YES Bank. Finally, this issue also provides a view from the industry, from Dee Piping Systems and Boson Energy Ltd regarding the multi-stakeholder approach required to re- kindle growth in the sector. It is our constant endeavor at BioPower India to provide a platform for engaging in meaningful dialogue about the goings-on in the biomass sector in India, to facilitate conversations around the same and to showcase efforts made in the field. We do hope you enjoy this issue of BioPower India. Please send your feedback and let us know what other areas you would like us to cover. We look forward to hearing from you at [email protected]. I am delighted to receive the April-June 2015 Thank you for sending across the quarterly issue of BioPower India. publication 'Bio Power India' along with the letter dated Oct 27, 2015 Highlighting topics such as removing barriers to the (V K Jain) growth of biomass power in India, use of biomass Sr. Personal Secretary resources for grid and off-grid power production and Dr. Murli Manohar Joshi heating applications and rebuilding the momentum of MP (Lok Sabha) biomass power in India, through this issue will prove to be beneficial. We hope that you will continue to produce such useful publications Shri Mahesh Giri, MP (Lok Sabha) Oct 7, 2015

2 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 3 from the editor

rom the Editor Director, IREDA, he discusses the new refinancing scheme formulated by IREDA for reviving existing biomass power projects which have been

2 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 3 LEAD ARTICLE Asset backed finance has Table 2 Snapshot of biomass power projects and their lenders in last been key source of 10 years in India financing for Biomass Project Developer Location Size Year of Amount Lender Financing Pathways to Power plants (MW) commissio of loan ning (INR crore) Investments in biomass power Clarion Power Andhra Pradesh 12 2004 23.7 Andhra Bank Re-kindle Growth in the plants are dominated by asset-based Corporation Limited finance. Banks and Non-Banking Financial Corporations (NBFCs) have Rithwik Energy Andhra Pradesh 6 2004 12.7 Andhra Bank Systems Ltd been the main source of funding for BioPower Sector biomass plants in India. Indian Malwa Power Ltd. Punjab 6 2005 IREDA Renewable Energy Development Shriram Powergen Tamil Nadu 7.5 2007 - Axis Bank Agency (IREDA) provides loans with Limited repayment periods up to 15 years. Shalivahana Green - 10 2008 - IREDA Usually, the quantum of loan from Energy Limited India, in its recently submitted policies, as discussed in the previous IREDA is up to 70% of the total issue of BioPower India. This has Rake Power Limited Maharashtra 10 2008 39.5 IDBI + UCO Intended Nationally Determined project cost, however in special increased the risk perception in the Contributions (INDC) to the Shriram Non- Tamil Nadu 7.5 2009 - Axis Bank sector, leading to a gradual reduction cases this can go up to 75%. The UNFCCC, has reinforced its interest rate offered by IREDA for Conventional Energy commitment of achieving 175 GW in capital flowing in the sector. biomass plants varies from 12.5% to Limited renewable energy capacity by 2022.1 However, it must be noted that 13.25%4. IREDA has funded biomass Global Powertech Tamil Nadu 7.5 2010 30 Yes Bank Ltd It is envisaged to increase the out of all the renewable energy power projects in Punjab, Gujarat Equipments Limited installed biomass capacity to 10 GW technologies, biomass is the only and Maharashtra among other from the current capacity of 4.4 GW. firm and reliable power source since ETA Powergen Pvt. Ltd. Tamil Nadu 10 2009 - Indian Bank states, with an INR 594.595 crore Out of the current installed biomass it depends on agro and forest waste Sanjog Sugars & Rajasthan 10 2011 - Punjab worth of cumulative loans capacity, bagasse-based and residue as opposed to other Eco Power Pvt. Ltd. National Bank Aparna Khandelwal, sanctioned of till 2013 for biomass cogeneration plants constitute renewable sources of energy like Sustainability Outlook solar and wind that depend directly power, and an INR 4460.97 crore S.M. Environmental Rajasthan 8 2010 - Axis Bank approximately 3 GW and biomass on the nature. Given India’s primarily worth of cumulative loans Technologies Pvt. Ltd. and gasification plants constitute agriculture-dependent economy, sanctioned of for both bagasse (Formerly Kalptaru the remaining 1.4 GW capacity.2 Energy Venture Pvt. Ltd.) agricultural waste is abundantly cogeneration and biomass power plants6. Orient Green Power Tamil Nadu 10 2011 24 State Bank Company Ltd. of India Table 1 Growth in capacity of Bio Power capacity (including bagasse Venture capital and private Shalivahana Green Orissa 20 2011 90 IDBI + UCO based co-gen and other biomass power) equity constituted a total investment Energy Limited Year Total Bio Power Biomass Power & Biomass Power and of INR 120 crores in 2013 in this Capacity (including Gasification total Gasification capacity sector7. Shalivahana (Biomass) Madhya Pradesh 12 2011 50 State bank bagasse cogenera- capacity (MW) as % of total bio Power Project Limited of Patiala International agencies like tion) (MW) power capacity (%) Amreli Power Projects Gujarat 10 2011 34.5 IREDA International Finance Corporation 2010-11 2,664 997 37 Limited 2011-12 3,135 1,150 37 (IFC) have funded some biomass plants in India. As compared to Junagadh Power Gujarat 10 2011 46 IREDA 2012-13 3,602 1,265 25 Somil Daga, investments in solar and wind Projects Pvt. Limited Sustainability Outlook 2013-14 4,014 1,365 34 energy, foreign investments in the Shanti G.D Ispat Chhattisgarh 15 2011 34.6 Union Bank 2014-15 4,418 1,410 32 bio-power sector have remained and Power Pvt Ltd. of India Source: MNRE annual reports fairly low. Abellon Cleanenergy Gujarat 9.95 2011 - IREDA The last few years have witnessed available in the country, which can Ltd. a chequered growth in biomass be used as fuel for biomass plants. Orient Green Power Rajasthan 8 2011 - Central Bank plants, as shown in Table 1. In the It is estimated that India has a Company Ltd. of India last 5 years, there has been only a potential capacity of 18 GW 3 Greta Energy Ltd Maharashtra 15 2012 - PTC India 413 MW increase in capacity of biomass power plants . Biomass Financial biomass power plants, whereas used for power generated not only Services Ltd. bagasse-based cogeneration has liquidates the rural economy, but seen a 1341 MW increase in its also generates local employment. capacity during the same time. This, Hence, BioPower carries great 4 http://www.ireda.gov.in/writereaddata/Financing%20Norms%20%20Schemes%20_%2026%2007%202014.pdf in part, is due to the misalignment potential as a renewable source of 5 http://www.ireda.gov.in/writereaddata/Annual%20Report-2012-13%20ENGLISH%20VER%283%29.pdf between the centre and state power in India. 6 http://www.ireda.gov.in/writereaddata/Ireda%20%20Annual%20Report%202013-14.pdf 7 https://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&uact=8&ved=0CCQQFjABahUKEwiV0uyqxLzIAhXGUo4KHX- 1 http://www4.unfccc.int/submissions/indc/Submission%20Pages/submissions.aspx sABA&url=http%3A%2F%2F2015.re-invest.in%2FDocument%2Forginal%2F8.RE- 2 http://mnre.gov.in/mission-and-vision-2/publications/annual-report-2/ Invest%2520Roadshow%2520Presentation%2520V6.ppt&usg=AFQjCNFqpZyDgffMzbDbHtQz6qt25Aca_w&bvm=bv.104819420,d.c2E 3 mnre.gov.in/schemes/grid-connected/biomass-powercogen/

4 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 5 LEAD ARTICLE Asset backed finance has Table 2 Snapshot of biomass power projects and their lenders in last been key source of 10 years in India financing for Biomass Project Developer Location Size Year of Amount Lender Financing Pathways to Power plants (MW) commissio of loan ning (INR crore) Investments in biomass power Clarion Power Andhra Pradesh 12 2004 23.7 Andhra Bank Re-kindle Growth in the plants are dominated by asset-based Corporation Limited finance. Banks and Non-Banking Financial Corporations (NBFCs) have Rithwik Energy Andhra Pradesh 6 2004 12.7 Andhra Bank Systems Ltd been the main source of funding for BioPower Sector biomass plants in India. Indian Malwa Power Ltd. Punjab 6 2005 IREDA Renewable Energy Development Shriram Powergen Tamil Nadu 7.5 2007 - Axis Bank Agency (IREDA) provides loans with Limited repayment periods up to 15 years. Shalivahana Green - 10 2008 - IREDA Usually, the quantum of loan from Energy Limited India, in its recently submitted policies, as discussed in the previous IREDA is up to 70% of the total issue of BioPower India. This has Rake Power Limited Maharashtra 10 2008 39.5 IDBI + UCO Intended Nationally Determined project cost, however in special increased the risk perception in the Contributions (INDC) to the Shriram Non- Tamil Nadu 7.5 2009 - Axis Bank sector, leading to a gradual reduction cases this can go up to 75%. The UNFCCC, has reinforced its interest rate offered by IREDA for Conventional Energy commitment of achieving 175 GW in capital flowing in the sector. biomass plants varies from 12.5% to Limited renewable energy capacity by 2022.1 However, it must be noted that 13.25%4. IREDA has funded biomass Global Powertech Tamil Nadu 7.5 2010 30 Yes Bank Ltd It is envisaged to increase the out of all the renewable energy power projects in Punjab, Gujarat Equipments Limited installed biomass capacity to 10 GW technologies, biomass is the only and Maharashtra among other from the current capacity of 4.4 GW. firm and reliable power source since ETA Powergen Pvt. Ltd. Tamil Nadu 10 2009 - Indian Bank states, with an INR 594.595 crore Out of the current installed biomass it depends on agro and forest waste Sanjog Sugars & Rajasthan 10 2011 - Punjab worth of cumulative loans capacity, bagasse-based and residue as opposed to other Eco Power Pvt. Ltd. National Bank Aparna Khandelwal, sanctioned of till 2013 for biomass cogeneration plants constitute renewable sources of energy like Sustainability Outlook solar and wind that depend directly power, and an INR 4460.97 crore S.M. Environmental Rajasthan 8 2010 - Axis Bank approximately 3 GW and biomass on the nature. Given India’s primarily worth of cumulative loans Technologies Pvt. Ltd. and gasification plants constitute agriculture-dependent economy, sanctioned of for both bagasse (Formerly Kalptaru the remaining 1.4 GW capacity.2 Energy Venture Pvt. Ltd.) agricultural waste is abundantly cogeneration and biomass power plants6. Orient Green Power Tamil Nadu 10 2011 24 State Bank Company Ltd. of India Table 1 Growth in capacity of Bio Power capacity (including bagasse Venture capital and private Shalivahana Green Orissa 20 2011 90 IDBI + UCO based co-gen and other biomass power) equity constituted a total investment Energy Limited Year Total Bio Power Biomass Power & Biomass Power and of INR 120 crores in 2013 in this Capacity (including Gasification total Gasification capacity sector7. Shalivahana (Biomass) Madhya Pradesh 12 2011 50 State bank bagasse cogenera- capacity (MW) as % of total bio Power Project Limited of Patiala International agencies like tion) (MW) power capacity (%) Amreli Power Projects Gujarat 10 2011 34.5 IREDA International Finance Corporation 2010-11 2,664 997 37 Limited 2011-12 3,135 1,150 37 (IFC) have funded some biomass plants in India. As compared to Junagadh Power Gujarat 10 2011 46 IREDA 2012-13 3,602 1,265 25 Somil Daga, investments in solar and wind Projects Pvt. Limited Sustainability Outlook 2013-14 4,014 1,365 34 energy, foreign investments in the Shanti G.D Ispat Chhattisgarh 15 2011 34.6 Union Bank 2014-15 4,418 1,410 32 bio-power sector have remained and Power Pvt Ltd. of India Source: MNRE annual reports fairly low. Abellon Cleanenergy Gujarat 9.95 2011 - IREDA The last few years have witnessed available in the country, which can Ltd. a chequered growth in biomass be used as fuel for biomass plants. Orient Green Power Rajasthan 8 2011 - Central Bank plants, as shown in Table 1. In the It is estimated that India has a Company Ltd. of India last 5 years, there has been only a potential capacity of 18 GW 3 Greta Energy Ltd Maharashtra 15 2012 - PTC India 413 MW increase in capacity of biomass power plants . Biomass Financial biomass power plants, whereas used for power generated not only Services Ltd. bagasse-based cogeneration has liquidates the rural economy, but seen a 1341 MW increase in its also generates local employment. capacity during the same time. This, Hence, BioPower carries great 4 http://www.ireda.gov.in/writereaddata/Financing%20Norms%20%20Schemes%20_%2026%2007%202014.pdf in part, is due to the misalignment potential as a renewable source of 5 http://www.ireda.gov.in/writereaddata/Annual%20Report-2012-13%20ENGLISH%20VER%283%29.pdf between the centre and state power in India. 6 http://www.ireda.gov.in/writereaddata/Ireda%20%20Annual%20Report%202013-14.pdf 7 https://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&uact=8&ved=0CCQQFjABahUKEwiV0uyqxLzIAhXGUo4KHX- 1 http://www4.unfccc.int/submissions/indc/Submission%20Pages/submissions.aspx sABA&url=http%3A%2F%2F2015.re-invest.in%2FDocument%2Forginal%2F8.RE- 2 http://mnre.gov.in/mission-and-vision-2/publications/annual-report-2/ Invest%2520Roadshow%2520Presentation%2520V6.ppt&usg=AFQjCNFqpZyDgffMzbDbHtQz6qt25Aca_w&bvm=bv.104819420,d.c2E 3 mnre.gov.in/schemes/grid-connected/biomass-powercogen/

4 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 5 lead article

Project Developer Location Size Year of Amount Lender Fig. 2 Scenario analysis for financing requirement to meet the 2022 target (MW) commissio of loan For increasing

ning (INR crore) investments and Orient Green Power Rajasthan 8 2013 54 Axis Bank additional incentives, it is 60,000 Company Ltd. quintessential to create a Viaton Energy Pvt Ltd. Punjab 10 2013 62.7 State Bank 50,000 of India less risky environment for

Orient Green Power Madhya Pradesh 10 2014 66.3 State Bank potential investors. 40,000 Company Ltd. of India

crore) Orient Green Power Maharashtra 20 2014 - State Bank Availability and 30,000 Company Ltd. of India (INR

Haveri Bioenergy Karnataka 10 2014 55 Bank of accessibility of capital tal

Private Limited baroda key for meeting the Capi 20,000 Dharwad Bioenergy Karnataka 10 2014 55 Bank of India 2022 target Private Limited 10,000 As per Sustainability Outlook’s Orient Green Power Punjab 10 2014 60.72 Axis Bank analysis, a total capital of INR 26,600 Company Ltd. is required over the next 7 years for - Orient Green Power Punjab 10 2014 60.9 Axis Bank achieving an additional capacity of Year 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 Company Ltd. 5.6 GW to attain the target of 10

Orient Green Power Tamil Nadu 7.5 2014 39.2 Axis Bank GW (assuming the average capital Best case scenario 1215 2588 4139 5892 7873 10111 12640 15498 18728 22378 26502 31162 36428 42378 49102 Company Ltd. cost for a bio-power plant to be INR 4.75 crore/MW). Looking at the past Business As 277 589 942 1342 1793 2302 2878 3529 4264 5095 6034 7095 8294 9649 11180 Shalivahana Green - 23 - IDBI Usual scenario Energy Limited trends (Table 1), if we assume that biomass plants will have a share of Capital required to meet the target 798 1596 2394 3192 3990 4788 5586 5586 5586 5586 5586 5586 5586 5586 5586 Sriram Power Tamil Nadu 7.5 - - - 30% out of the total 5.6 GW (of Gen Pvt. Ltd combined bagasse based cogen and Agri Gold Projects Ltd Andhra Pradesh 6 - - Andhra Bank biomass power plants), that is, 1.68 Source: RBI Basic statistical Returns (2009-2015)9, MNRE annual reports (2009-2015), Sustainability Outlook analysis Sai Renewable Power Andhra Pradesh 4.5 - - Andhra Bank GW, the total debt required per year Corp Ltd will be approximately INR 800 crores (assuming 70% of capital cost will up biomass power plants, it will sector, India will be able to achieve Kalyani Renewable Maharashtra 15 - - State Bank of Building an investor- be financed through debt). have set up only an additional its target of total 10 GW by 2022. Energy India Limited India + State 866 MW capacity of biomass plants friendly environment key Bank of However, only extension of We have projected the credit by the set target - with a whopping Hyderabad adequate credit will not ensure a to spur growth availability for the biomass sector gap of 814 MW. Continuing at its spur in growth in the sector. To facilitate the aforementioned Synergy Shakthi Tamil Nadu 10 - - State Bank (under two scenarios: Business as current pace, the country is likely to Adequate availability of capital must mechanisms for increasing Renewable Energy Ltd of India usual and Best case scenario) and achieve the 1680 MW target only by be complemented with additional investments and additional Malavalli Power Plant Karnataka 4.5 - 18.9 Karnataka compared it with the credit FY2025-26, 4 years later than its incentives and measures to ensure incentives, it is quintessential to Pvt Ltd Renewable requirement to meet the set target. committed time frame. the available capital is also made create a less risky environment for Energy Based on projections by various Development rating agencies, an average growth Therefore, extension of further accessible to the developers. For potential investors. credit in the sector at a low interest developers, extension of medium Ltd. (KREDL) rate of 13% has been assumed for Banks have sectoral caps to limit projecting the total credit availability rate is quintessential for providing and long-term loans coupled with Turbo atom – Maharashtra 15 - 40 State Bank their exposure to any one sector, or the impetus to kick-start growth. affordable rates is essential. Once TPS Projects Ltd. of India for the renewable energy sector in technology. As renewable 8 credit is made accessible, other the future. deployment increases, more banks Arya Energy Ltd. Madhya Pradesh 12 - State Bank Best-case scenario- additional regulatory measures must be in are nearing their sector exposure of India Business as usual scenario will incentives needed to ensure place to ensure continuity and accessibility of capital limits for power which is leading to Sinewave Biomass Maharashtra 10 - 58.4 State Bank delay target achievement viability of the plants. Proper revision decreased credit availability for Power Pvt Ltd of India Under the business as usual Increase in extension of credit and implementation of feed-in- renewable energy as a whole and scenario, credit extension for rate for biomass plants in the recent tariffs, Renewable Purchase Maharashtra Vidhyut Maharashtra 10 - 45 YES Bank biomass power in particular. biomass power plants has been past has seen a fall from 4.4% in Obligations (RPOs), Renewable Nigam Ltd Reduced credit availability along assumed to follow a historical rate 2010-11 to 1% in 2014-15. Taking Energy Certificates etc. are some Matrix Agro Pvt Ltd. Karnataka 6 - 31.8 Andhra Bank with increased risk perception of the of 1% (FY2014). If India continues the best case scenario as the 2010- avenues that can achieve this and biomass sector is hampering its Usher Eco PowerLtd. Uttar Pradesh 16 - 85 Axis Bank on its current trajectory for setting 11 rate of 4.4% yearly increase in build a robust and sustainable growth potential. Yash Agro Energy Maharashtra 8 - 35.9 State bank extension of credit for biomass biomass sector. Pvt. Ltd. of India

Source: Developers and funders’ websites, compiled by Sustainability Outlook 8 No change in sectoral limits/caps for lending has been assumed 9 https://www.rbi.org.in/Scripts/AnnualPublications.aspx?head=Basic%20Statistical%20Returns#

6 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 7 lead article

Project Developer Location Size Year of Amount Lender Fig. 2 Scenario analysis for financing requirement to meet the 2022 target (MW) commissio of loan For increasing ning (INR crore) investments and Orient Green Power Rajasthan 8 2013 54 Axis Bank additional incentives, it is 60,000 Company Ltd. quintessential to create a Viaton Energy Pvt Ltd. Punjab 10 2013 62.7 State Bank 50,000 of India less risky environment for

Orient Green Power Madhya Pradesh 10 2014 66.3 State Bank potential investors. 40,000 Company Ltd. of India

crore) Orient Green Power Maharashtra 20 2014 - State Bank Availability and 30,000 Company Ltd. of India (INR

Haveri Bioenergy Karnataka 10 2014 55 Bank of accessibility of capital tal

6 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 7 lead article

IN CONVERSATION WITH Therefore, alternate sources of support in form of financial products renewable energy, IREDA has credit need to be explored to fill this such as working capital loans to help announced a re-financing scheme emerging gap. Instruments such as meet operating expenses (which for existing biomass plants, which green bonds, though recently may fluctuate drastically due to would provide comfort in the form introduced in India, have proven change in prices of feedstock). of refinancing of up to 30% of loan “Innovative Financing Schemes useful worldwide to increase loans Such measures/ financial products outstanding at concessional rates to (on more favorable terms than can also help increase investor biomass power projects which have vanilla debt10) to the sector. In March confidence in the biomass power either been shut down or have been Putting the Biomass Sector on 2015, the EXIM Bank of India issued sector as a whole. operating at extremely low Plant a five-year USD 500 million green A few positive steps have already Load Factor (PLF). Also, as per RBI bond. YES Bank, in February 2015, been taken by the policy makers in guidelines renewable energy power raised INR 1000 crore via green the Road of Recovery” order to improve the investor projects now fall under the purview bonds. Green bonds can be used sentiment in this sector. As discussed of priority sector lending. specifically for biomass sector to in the previous issue, Central ensure greater flow of capital into A robust and investor-friendly Electricity Regulatory Authority has the sector. environment facilitated by multi- recognized the need for regular stakeholder and international India’s renewable Several renewable energy Another avenue is to promote revision of tariffs for biomass power engagement, efficient regulatory technologies are today seen as active engagement with plants depending on the availability policies will certainly help re-kindle energy sector has seen mature technologies and cost- international funding agencies/ and price of feedstock. Moreover, investor interest and drive growth in significant growth in competitive in comparison with multilateral financing institutes such the apex financing institution for the Indian biomass sector. recent times. What has conventional power generation technologies. as Asian Development Bank, IFC, been your experience as a JICA etc. and continuously seek IREDA is a uniquely placed pacts with other countries to tap financier? Could you Aparna Khandelwal is the Business Lead for Sustainability outlook, a institution established under MNRE into international sources of capital share some of IREDA’s key that is solely dedicated for financing for the biomass power sector in division of cKinetics Consulting. Aparna has 8+ years of experience renewable energy projects in India. across sectors linked to sustainability with specialization in business highlights in the past India. BioPower India As on March, 2015, IREDA has advisory, program management, market intelligence, financial year? financed 2168 projects with Also, unlike other sources of spoke to Mr. KS Popli, The year 2015 was marked with cumulative loan disbursements of renewable energy, biomass power modelling and investment assessment. Her core expertise lies in Chairman & Managing several significant developments in Rs.16,940 crores for a capacity projects require significant working Renewable Energy, Sustainable Finance and Impact Investing Director, IREDA the renewable energy sector. The addition of about 6000 MW. capital due to high costs of regarding financing mechanisms including first most important International operation for a biomass plant- of In the recent past, IREDA has the refinancing scheme event “RE-INVEST 2015” attracted which procurement, transportation introduced several innovative launched for reviving several investors and Green Energy and storage of fuel forms a major financing mechanisms like structured Biomass power Commitments to the tune of 273 Somil Daga is an Associate with cKinetics Consulting focussing on / flexible repayments linking with component. Therefore, not only do projects GW of renewable energy capacity project developers need to create a project development of renewable energy projects in both rural and during next 5 years. The Government seasonal generation, longer door-to- robust fuel collection model to industrial setting. has also put a lot of thoughts, door repayment periods of more ensure efficiency in fuel collection resources and policy push into the than 10-15 years and higher Debt and storage, but they also require renewable energy space. The biggest Equity ratio for solar and wind push came in the form of setting up projects. We have also introduced a a target of 175 GW of renewable new scheme namely “Securitization IREDA’s National energy capacity by 2022, of this of future cash-flows” for meeting Clean Energy Fund 10 GW would be Biomass power. the additional fund requirements for India’s commitment on climate future business expansion in RE (NCEF) Refinancing change for reducing the emissions projects and NCEF refinancing intensity of its GDP by 33-35% over scheme to revive existing biomass Scheme is designed 2005 levels, also focuses on to power and small hydro projects. to address challenges achieve about 40% generation from Apart from the above, for meeting non-fossil fuel based energy the immediate fund requirements and revive the resources by 2030. In addition, towards implementation of RE affected projects by there has been several policy projects, instruments like Bridge measures at state & central level, Loan Scheme & Short term loan improving their which triggered the renewable assistance are gaining popularity movement in the country. Declining among project developers. To ensure viability. capital costs more specifically for credit flow into the RE sector, IREDA solar power also played a has tied up new lines of credit with significant role in the expansion of international agencies like AfD, KfW, renewable energy deployment. ADB during the past year.

10 Vanilla debt implies standard version of debt, i.e, fixed rate borrowing with no additional features such as convertibility rights or warrants.

8 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 9 lead article

10 Vanilla debt implies standard version of debt, i.e, fixed rate borrowing with no additional features such as convertibility rights or warrants.

8 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 9 in conversation with

Can you please share for the projets, that have faced huge What are the eligibility • The plants/loans, which availed The lender needs to confirm loan and in case the project is not feed stock prices esclation, then only One Time Settlement (OTS) are to IREDA that the project is comm- revived within 6 months of the loan more details regarding those projects can be put on track. criteria for the affected not eligible under the scheme ercially viable post refinancing/ sanction, the sanction will be Further, an allocation of Rs.200 restructuring. Release of refinancing cancelled. In case, if the lending the NCEF fund power plants to avail the The following components of crores has been made from National will be effected only post receiving bank does not repay the loan in any With India’s commitment benefits of this scheme? finance/loans are not eligible under Clean Energy Fund (NCEF) to help this confirmation from the Bank/FIs. two subsequent quarters, during the towards climate change, ecologically the scheme: Biomass and Small Hydro projects This scheme will benefit a certain Also, the Banks/FI need to obtain an currency of the loan, the refinance sustainable growth, at the same below 5MW which are facing category of biomass power plants • Loan Sanctioned against undertaking from the promoter that amount will be recalled, and in that time addressing India’s energy difficulties in repayment of their which meet the eligibility criteria. securitization of future cash they will run the project for at least case the lender will have to return security challenge, the National dues to lenders because of fuel This includes: flows. 3 years after the refinance with an the NCEF refinance amount in one Clean Energy Fund was established prices esclation or other reasons. The average PLF of 40% in case of go (without any penalty). by the Government of India by • Plants should have been com- • Working Capital Limits/Loans. National Clean Energy Fund scheme biomass power plants. Moreover, the levying a cess on coal of Rs. 50/ missioned during 01.04.2003 would provide comfort in the form • Funded Interest Term Loans (FITL) commercial banks/ financial tonne subsequently raised to Rs.200 and 31.03.2013 and their What’s your outlook for of re-financing part of loan institutions need to have proper pre per tonne of coal produced in India viability affected due to component at concessional rate to and post-disbursement supervision the biomass sector in as also on imported coal. An amount abnormal fuel cost escalation Are there any eligibility those needy projects. For effective and follow-up of loans to ensure of Rs.12,000 crores per annum issues or any other force majeure India? utilization of NCEF Funds, it is criteria for Banks / operations of the plant and also (approx. USD2 billion) is being condition The bioenergy sector requires proposed that the support would Financial institutions timely / regular repayment of the mobilized which is being used for more support with attractive tariff be provided to projects where there • The eligible plant should have loans. supporting Renewable Energy also? If yes, please policies at state level to harness its is a possibility of revival of their operational history of at least Projects and clean technologies. potential. There is also need to operations. 2 years after commissioning of elaborate more on that. Are there any caveats to support these projects through By the end of 2014-15, an the plant and the average PLF for Scheduled commercial banks innovative instruments like NCEF amount of INR 16,388.81 crore has 2 years (in case of plant operated and financial institutions which ensure that this scheme Could you provide an schemes etc. A lot of biomass power been collected as coal cess for for more than 2 years, then the can avail this scheme, should be amount is used properly overview of the key generation capacity can be achieved, National Clean Energy Fund (NCEF). average PLF of any 2 years) profit-making entities for the last and plant operation is features of this should be at least 20% in case three years and should have no by addressing supply chain issues, As per the budget estimates during ensured after refinance? 2015-16 an amount of INR refinancing scheme? of biomass power projects accumulated losses. Their Capital formalizing biomass feedstock Adequacy Ratio should be in The project should be revived/ markets, regulating prices and 13,118.04 crore will be collected as • The project should also have In this scheme, the refinance is conformity with the prescribed operationalized within 6 months regularly revising tariffs on the basis coal cess for NCEF as opposed to INR minimum average Debt Service limited to 30% of the outstanding regulatory norms. Also, Gross Non- after the approval of the refinance of fuel availability. 8,916.46 crore in 2014-15. Coverage Ratio (DSCR) of 1.1 loan, which shall be provided to Performing Assets as a percentage of after taking into account scheduled commercial banks and Gross Advances should normally not The commissioned refinance amount and should be financial institutions at a exceed 5% for the entire portfolio of able to service the loan biomass power plants concessional interest rate of 2%, the lending institution. However, this have faced unforeseen which shall be passed by the • The plant should be revived / condition will not be applicable to Mr. K.S Popli, Chairman & Managing Director, Indian Renewable Energy Bank/FIs to the project developers at operationalized within 6 months State/ Central PSU Banks/Govt. Development Agency Limited (IREDA) has over 33 years of diversified issues such as feedstock the same rate, subject to minimum after the approval of the NBFC’s/ Govt. FIs. experience in power sector in design, engineering, erection, appraisal price escalation, low refinance amount of INR 1.50 crore refinance loan and in case the and finance of power projects in generation, transmission, distribution, tariffs etc., which has per project and maximum refinance plant is not revived within 6 amount of INR 10 crore per project. What other conditions renovation and modernization, energy efficiency as well as renewable impacted their viability. months of the loan sanction, the sanction will be cancelled. are imposed on the energy. Before joining IREDA, he has held different positions at Power How can some of these Repayment period for the refinance amount should be co- Banks/FIs to ensure that Finance Corporation (PFC) for 14 years and at National Hydroelectric challenges be addressed terminus with the repayment period What kind of loans/ the plant is revived with Power Corporation (NHPC) for 11 years to encourage the of Bank/FIs for that project and the developers are not refinancing scheme? participation of other maximum repayment period shall be 10 years apart from moratorium/ eligible for this scheme? mainstream financial grace period of 6 months from the Few categories of plants/ institutions in this sector? date of disbursement/ release of promoters/entities will not be refinance loan. eligible for refinance under the In number of states, state scheme. These include: regulators have provided a fixed tariff for biomass projects and the Which renewable energy • Those declared wilful defaulters, developers have entered into PPAs technologies are as per RBI norms with the utilities based on the same. considered under the • Those declared non – cooperative However, now keeping in view the borrowers, as per RBI norms difficulties being faced by the scheme? biomass developers, the biomass Grid connected combustion based • The projects which are non- projects are being provided two part Biomass power plants and Small operational since last 5 years tariff with variable cost to be Hydro power plants up to installed • Companies with cash profits as reviewed every two years. If capacity of 5 MW are eligible under per the latest audited balance regulatory intervention can be made this refinancing scheme. sheet/annual report

10 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 11 in conversation with

10 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 11 SPOTLIGHT Framing Success Figure 1: Historical variation in plant load factor Things haven’t always been rosy for Varam. Even as the company Plant load factor (PLF) commenced operations, some of the Feedstock Management and 100% key assumptions and approaches on the feedstock availability and costing 80% Integrated Operations Key to came under a shadow. 60% The region where the project has 40% been set up has a predominantly agriculture based economy. The 20% Stability and Profitability of region was selected as it was rich in 0%

biomass with significant presence of ’02

rice husk as also paddy straw, 02-’03 03-’04 04-’05 05-’06 06-’07 07-’08 08-’09 09-’10 10-’11 11-’12 12-’13 13-’14 14-’15

Biomass Power Sector: casuarina, jute stick and castor Jan-Mar stems. Traditionally the agro Plant load factor (PLF) based residues were burnt on the Varam Power Projects fields leading to high volume of particulate emissions leading to air Figure 2: Historical variation in cost of Biomass pollution. Hence the alternate use presented through the biomass power plant offered a significant Historical yearly variation in cost of Biomass (`/MT) social and environmental advantage The biomass power sector has Srikakulam District, Andhra Pradesh as well. 2500 seen some difficult times with close is leading by example. The plant has However things played out a bit to 50 percent of the power plants in been set up on over 27.3 acres /MT) 2000 ` the country facing heavy losses and wherein approximately 54% of the differently. Over time demand for 1500 being shut down consequently due area is occupied by the generation rice husk grew due to industriali- to escalating raw material costs and equipment and about 20% is zation, primarily from the growth 1000 a mismatch between generation cost allocated for storage of the of lot of small and middle scale industries like solvent oil extraction st of Biomass 500 and tariffs. Inability to pass on the feedstock and the rest of the area Co feedstock costs have led biomass is set aside as green belt. plants, ethanol plants and beverage 0 power plants to function well below plants that sprouted in the region. ’02

Varam Power’s primary business 02-’03 03-’04 04-’05 05-’06 06-’07 07-’08 08-’09 09-’10 10-’11 11-’12 12-’13 13-’14 their capacity and, in some extreme These industries started competing mission is to utilize low-density crop AVN Prasad, cases even suspend operations. with the power plant for sourcing & Jan-Mar residues for biomass power Director, Varam Power Immense fluctuation in fuel costs utilizing of rice husk as an ideal fuel. Historical yearly variation in cost of Biomass (`/MT) generation. The plant was Projects Pvt Ltd coupled with absence of adequate Consequently the cost for rice husk commissioned in 2001 and has and appropriate fuel handling escalated considerably. Also, due to *Note: Drop in PLF in FY13-14 due to fire at the plant because of which it was shut for almost 6 months for execution of repairs already completed 13 years of systems are key reasons for the small paddy mills being the only operations successfully even as the Table 1: Salient operating and performance characteristics of the Project biomass power plants being source for rice husk, the availability biomass cost has shot from about perceived as non-performing assets of feedstock resources in sufficient INR 700 per tonne (average Plant summary VPPL plant at (NPA) by the bankers. quantities also seemed to present a annualized purchase price) when it Fuel Rice Husk and other agricultural residue potential concern. Chilkalapalem has There have been only a handful first started out to over INR 2,500 Fuel consumption 27 TPH of plants that have been able to per tonne currently – through this As feedstock price varied, the Alternator capacity 7.5 MVA been able to tackle most of these challenges and journey, the plant has been able to project started experiencing losses Steam pressure 65 kg/cm²(g) maintain an average have sustainably operated their maintain a consistent average PLF of since the tariff structure didn’t Steam temperature 492 °C plants for over a decade. Varam above 70%. Table 1 summarizes the allow for absorption of the price Boiler efficiency 91.6 % on NCV (Net calorific value) PLF of 70 – 75% and Power Projects Limited (VPPL)’s 6 salient operating and performance fluctuations in the biomass Availability >7000 hours/year Auxiliary consumption 10% of generated power Varam’s successful MW plant at Chilkalapalem village in characteristics of the Project. feedstock. This problem got further exacerbated with the introduction Annual fuel requirement >70,000 MT management of of the two part tariff. While the Plant Load Factor (PLF) 70 - 75% principle seemed fine, the initial Gross generation per annum 42 million units feedstock availability approach left Varam facing Financial summary has been a key substantial losses. Varam was forced Capital Expenditure INR 24.4 Cr to approach the Appellate Tribunal O&M Expenditure 11.8% of Capital principal factor for Electricity which subsequently O&M Annual escalation 4% ruled in their favour and hence the Debt : Equity Ratio 75 : 25 company is expected to recoup the Interest on Working Capital 12% losses in considerable measure.

12 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 13 SPOTLIGHT Framing Success Figure 1: Historical variation in plant load factor Things haven’t always been rosy for Varam. Even as the company Plant load factor (PLF) commenced operations, some of the Feedstock Management and 100% key assumptions and approaches on the feedstock availability and costing 80% Integrated Operations Key to came under a shadow. 60% The region where the project has 40% been set up has a predominantly agriculture based economy. The 20% Stability and Profitability of region was selected as it was rich in 0%

biomass with significant presence of ’02

rice husk as also paddy straw, 02-’03 03-’04 04-’05 05-’06 06-’07 07-’08 08-’09 09-’10 10-’11 11-’12 12-’13 13-’14 14-’15

12 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 13 spotlight

Figure 3: Annual tariff variation for generated power Mechanism (CDM). It proved to be a major relief for the plant as during Box 1: Strategies to improve that time, the company was plant performance Plant load factor (PLF) suffering under liquidity crisis and • Regular maintenance of the 6 losses. Income from CER credits plant with periodic clearance of 5 contributed an additional 7-8% to slag deposition the revenue for initial 10 years of • Closed-loop optimization of fuel Wh)) 4 operation. Without the CDM credits and air mixing by manipulating it would be difficult for the plant to 3 fuel and air levels to balance have sustained for so long. combustion in the furnace 2

ariff (INR/ K • Pre-treatment (drying and T 1 Integrated Operations a cutting) of biomass feedstock key pre-requisite for optimum utilization of fuel 0 Varam success at several levels • Appropriate information flow

01-’02 02-’03 03-’04 04-’05 05-’06 06-’07 07-’08 08-’09 09-’10 10-’11 11-’12 12-’13 13-’14 14-’15 has been possible only due to a and proper coordination Variable cost Fixed cost focused commitment on the between feedstock procurement operational approach as also human officers and Operations teams Even as it approached the the key decisions made by Varam in resource training. • Installation of central control Apellate Tribunal, Varam responded its project design was to instead While most biomass plants with Further given the importance of and monitoring systems with to the challenge by enhancing its have High Pressure boilers. With similar number of operating years achieving a stable power output in Appropriate skilling of remote access focus on the feedstock supply chain biomass fuels becoming more spite of fluctuations in the fuel operate at an average PLF of 40%, • Installation of an integrated as also leveraging several of its other expensive, presence of these high supply, the plant has been equipped the labor and technicians the Varam plant has been able to biomass fuel moisture sensor to levers. pressure boilers have allowed the maintain an average PLF of 70 – 75% with a multi-fuel fired traveling grate engaged in operations project to achieve better fuel to allow a biomass-fueled power and Varam’s successful management boiler. This has allowed the plant the plant to monitor feedstock steam conversion and evaporation and maintenance of the Creating a virtuous cycle of feedstock availability has been a ability to handle multiple fuels and moisture content and adjust ratios and thus help generate a plant is a key pre- of biomass supply chain key principal factor. thus become more resilient (rather combustion processes higher output in a more efficient than be constrained by dependence requisite to minimize The challenge of building a fashion. on a single fuel source). problems and increase • Measurement of flue gases to stable, efficient supply chain is determine combustion efficiency typically magnified by three factors: In addition, Varam team started Pre-treatment (primarily Also, the boiler design has been productivity focusing on pre-treatment. Pre- undertaken to ensure that variations • Upgrading technology with farmer education, logistics manage- drying) has helped to timely replacement of ment and demand-side stability. treatment (primarily drying) has in properties such as moisture helped to improve biomass improve biomass content, ash content and fusion equipment with periodic Keeping these issues in mind, characteristics and make handling, characteristics and make temperatures due to fuel mixing As is evident, for a plant to be inspection of the system Varam employed procurement able to perform well and sustain transport, and conversion processes handling, transport, and do not compromise the plant officers who conducted periodic more efficient and cost effective. performance. the healthy performance, proper visits to the villages around the plant conversion processes maintenance is essential. Appro- losses as these fuels differ in Operation and maintenance priate skilling of the labor and moisture and calorific values. Box 1 to motivate the farmers to bring the Diversity of revenue flows more efficient and cost residual agro waste to the plant. is a substantial portion of the technicians engaged in operations above lists some of the key These officers were made accountable Varam had successfully registered effective. expenditure on the biomass power and maintenance of the plant is a strategies adopted by Varam to for handling the feedstock supply under the Clean Development plant as compared to other key pre-requisite to minimize enable a holistic and streamlined chain, with a focus on procuring renewable energy sources. A problems and increase productivity. operation. carefully developed plant operations biomass from rice millers and small Plant operations cannot be approach represents a critically In case of Varam, the usage of farmers from within a 30 km radial established and sustained without a important variable to optimize the multiple fuels requires frequent shut distance from the plant. sophisticated support and oversight production and commercial viability down of the plant, change of parts structure. Varam Power has Over the years, while Varam Plant of the plant. Exceptional perfor- and restart after cleaning up slag successfully demonstrated the has primarily depended on rice husk mance can only be achieved by deposition. To ensure efficient collective institutional platform (little over 50% of the feedstock treating plant operations as an combustion of multiple fuels, required for exceptional plant consumed annually is husk), investment, not an expense. The operators have been trained to focus operations. seasonal agro residues like red gram most notable element in this on reduction of unburnt carbon stalk, jute sticks, saw dust, ground thinking is to frame an appropriately nut shells, bagasse, prosopis trained and motivated workforce as Mr. AVN Prasad, Director Varam Power Projects is responsible for cuttings and casuarina branches also a performance-oriented have also been used according to operations culture. To ensure the finance as well as matters related to fuel procurement and pricing. A the seasonal availability. project is implemented proficiently Masters in Business Administration (with specialization in and for the plant to be profitable Entrepreneurship) from Ball State University, (Indiana, USA), he joined Technology the project proponents need to the family business in 2004. focus on the operational capability Conventionally biomass power right from the beginning. plants have been established with low pressure boilers (65 psi). One of

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14 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 15 IN CONVERSATION WITH Another challenge specifically for renewable energy projects also fall large biomass plants is regular supply under the category of infrastructure Initiatives such as the of feedstock at reasonable prices. projects and we were instrumental in Since fuel costs forms a significant getting the loan tenures aligned with mezzanine financing “Increasing Capacity to Lend proportion of the total operating the requirement of the sector. This through sub-debt or even costs of a biomass plant, availability benefitted the lenders in terms of refinancing schemes such of feedstock in line with projected improved Asset Liability Management prices is one of the key factors (ALM) and developers in terms of as the one being will be Key for Growing the impacting financial viability of tenure. This move by IIFCL ensured introduced by IREDA can biomass power plants. Formulating a that other lenders also followed suit. help give the biomass proper pricing mechanism/ regulation IIFCL has also introduced a “Credit for feedstock should be set to reduce Enhancement Scheme”, which is also power market a much Bio-Power Sector” variability of tariff. applicable to the renewable energy needed push. sector (the 1st successful bond What policy measures are issuance was in the renewable energy sector). Under the scheme, IIFCL will required to be taken to the product structure compared to provide a partial credit guarantee to revive the biomass sector? bank debt. They can offer lower credit flow to the renewable energy enhance ratings of bond issues, What’s your outlook for interest rates which can be collected sector. Removal of renewable energy From a policy perspective, it will enabling channelization of long-term on a quarterly or half yearly basis the Indian RE market sector from specific caps for power be productive if the State Electricity funds for infrastructure projects. instead of a monthly routine. IIFCL is sector can help channel more funds Regulatory Commissions (SERCs) Under this scheme IIFCL can extend considering the 175 GW also looking to get the climate bond adopt some of the recommendations partial credit guarantee to the extent to renewable energy projects. certification for the fund which will target the government put forward by Central Electricity of 20% of total project cost. The Separate credit caps may be be issued by the London-based Regulatory Commission (CERC). One guarantee / credit enhancement has set? stipulated for each renewable energy Climate Bond Standards Board. of the key recommendations was to extended by IIFCL can extend the Renewable energy certainly holds technology if desired. revise the feedstock prices annually a bright future. Over time it is credit rating of the project bonds to Separately, we have also signed a From a lender’s perspective, there based on independent surveys. MoU with USAID to provide technical inevitably going to become a its desired credit rating (minimum AA are primarily two major concerns Biomass power as a technology is rating) subject to a maximum of 50% assistance for increasing investment compulsion to move to renewables regarding lending to renewable operation and maintenance (O&M) of the total amount of Project Bonds in renewable energy in the country. and increase their share in India’s BioPower India spoke to energy projects. The first key concern intensive. It needs people with issued. The minimum tenure for the Mr. SB Nayar, Chairman electricity mix. The technologies are is counter party risk. In grid management experience in the bonds is 5 years with or without lock in. What’s your outlook for & Managing Director, likely to improve leading to further connected renewable energy power operation and maintenance which IIFCL also plans to introduce a the Indian Biomass power India Infrastructure reduction in costs. Some mega scale plants, the key concern for lenders includes tasks such as setting up a renewable energy based power sustainable feedstock supply chain mezzanine financing scheme. This will market? Where do you see Finance Company Ltd is the viability of distribution be useful for the developer as instead (IIFCL) on the role of projects have already achieved grid companies (the counter party in this which will ensure constant supply of scope of improvement with parity and soon most renewables fuel for the power plant. The of increasing equity funding which is innovative financing case) and their ability to buy power more costly, they can avail of regards to the financing instruments to promote will achieve it and cost of generation and make timely payments to the developers also need to plan the project in detail, especially the subordinate debt. aspect of the biomass renewable energy sector may go below the present tariff developers. There have been instances management of operations and have rates. The renewable energy target where distribution companies power market? in India, particularly a good understanding of the various What are the other Biomass power. of 175GW as defined by the (DISCOMs) have defaulted or The biomass sector needs to be Government of India can be factors affecting the power plant. initiatives in the pipeline rejuvenated. Looking at the sector delayed their payments to the There should be adequate focus on achieved provided a few challenges for IIFCL? from a financing perspective, new developers, thereby rendering the assessing management capability and innovative financing schemes need to are dealt proficiently. The key power plant unviable. Thus, the bandwidth while sanctioning We believe that more funds can be introduced. The green bond requirement is enhancing capacity in health of the counter party is of subsidies/other incentives for biomass be channelized from the banking market in India needs to be the system - capacity to lend to the prime concern for the lenders. power plants such that projects which sector and incentives can be given to strengthened. Such bonds have an renewable energy sector, capacity to Currently, the renewable energy get selected honour their the renewable energy sector. Capacity to lend to advantage of providing long tenure implement projects in a timely sector is performing well relatively contracts/PPAs appropriately. Infrastructure debt funds (IDFs) can loans which will be beneficial to the the renewable energy manner, capacity for proper power compared to the thermal power be evaluated as an option to evacuation and capacity to pay for channelize more debt. IIFCL has developers in the renewable energy sector, but we need to realize that it’s Could you elaborate on sector. Even initiatives such as the power need to be looked into. already embarked on this path and sector, capacity to the same counter parties for both some of the steps been mezzanine financing through sub- thermal and renewable energy based set up IDFs. We are currently in the taken by IIFCL to promote process of setting up a Infrastructure debt or even refinancing schemes implement projects What in your opinion are power plants and thus it is extremely RE sector financing? Debt Fund of INR 1000 crores such as the one being introduced by in a timely manner, the present challenges or important that the health of discoms IREDA can help give the biomass One of the key initiatives specifically for green initiatives. Such is improved to accelerate the progress funds have more flexibility in terms of power market a much needed push. capacity for proper the key deterrents for of renewable energy deployment. undertaken by IIFCL, was to get flexible structuring for infrastructure investments in the The second key challenge is power evacuation projects (of which electricity Mr. S. B. Nayar, Chairman & Managing Director (CMD) of India renewable energy sector transmission of renewable power generation is a sub-set) approved by Infrastructure Finance Company Limited (IIFCL), possesses rich experience and capacity to pay which is currently a bottle neck (especially biomass RBI. Better known as 5/25 scheme, of around 37 years in finance and banking industry. A certified Associate in many plants. Proper evacuation of lenders can now fix longer for power need to be power) in India? renewable energy power from its amortization period for loans to Member of Indian Institute of Bankers, Mr. Nayar started his career at enhanced At a macro level, renewable generation source and maintaining projects in the infrastructure sector, State Bank of India as an Officer in 1976. Immediately, prior to joining energy falls under the power sector the stability of the central grid with for say 25 years (instead of 12-15 IIFCL, Mr. Nayar was the CEO& MD of IFCI Limited. Mr. Nayar had also been and most banks have reached their increasing proportion of renewables years earlier) based on the economic the member of the High Level Committee on Financing Infrastructure of sectoral caps for lending to the in the total electricity mix will be key life of the asset, with periodic Government of India, under the auspicious of the Planning Commission. sector. This is adversely affecting the to future growth. refinancing, say every 5 years. Large

16 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 17 IN CONVERSATION WITH Another challenge specifically for renewable energy projects also fall large biomass plants is regular supply under the category of infrastructure Initiatives such as the of feedstock at reasonable prices. projects and we were instrumental in Since fuel costs forms a significant getting the loan tenures aligned with mezzanine financing “Increasing Capacity to Lend proportion of the total operating the requirement of the sector. This through sub-debt or even costs of a biomass plant, availability benefitted the lenders in terms of refinancing schemes such of feedstock in line with projected improved Asset Liability Management prices is one of the key factors (ALM) and developers in terms of as the one being will be Key for Growing the impacting financial viability of tenure. This move by IIFCL ensured introduced by IREDA can biomass power plants. Formulating a that other lenders also followed suit. help give the biomass proper pricing mechanism/ regulation IIFCL has also introduced a “Credit for feedstock should be set to reduce Enhancement Scheme”, which is also power market a much Bio-Power Sector” variability of tariff. applicable to the renewable energy needed push. sector (the 1st successful bond What policy measures are issuance was in the renewable energy sector). Under the scheme, IIFCL will required to be taken to the product structure compared to provide a partial credit guarantee to revive the biomass sector? bank debt. They can offer lower credit flow to the renewable energy enhance ratings of bond issues, What’s your outlook for interest rates which can be collected sector. Removal of renewable energy From a policy perspective, it will enabling channelization of long-term on a quarterly or half yearly basis the Indian RE market sector from specific caps for power be productive if the State Electricity funds for infrastructure projects. instead of a monthly routine. IIFCL is sector can help channel more funds Regulatory Commissions (SERCs) Under this scheme IIFCL can extend considering the 175 GW also looking to get the climate bond adopt some of the recommendations partial credit guarantee to the extent to renewable energy projects. certification for the fund which will target the government put forward by Central Electricity of 20% of total project cost. The Separate credit caps may be be issued by the London-based Regulatory Commission (CERC). One guarantee / credit enhancement has set? stipulated for each renewable energy Climate Bond Standards Board. of the key recommendations was to extended by IIFCL can extend the Renewable energy certainly holds technology if desired. revise the feedstock prices annually a bright future. Over time it is credit rating of the project bonds to Separately, we have also signed a From a lender’s perspective, there based on independent surveys. MoU with USAID to provide technical inevitably going to become a its desired credit rating (minimum AA are primarily two major concerns Biomass power as a technology is rating) subject to a maximum of 50% assistance for increasing investment compulsion to move to renewables regarding lending to renewable operation and maintenance (O&M) of the total amount of Project Bonds in renewable energy in the country. and increase their share in India’s BioPower India spoke to energy projects. The first key concern intensive. It needs people with issued. The minimum tenure for the Mr. SB Nayar, Chairman electricity mix. The technologies are is counter party risk. In grid management experience in the bonds is 5 years with or without lock in. What’s your outlook for & Managing Director, likely to improve leading to further connected renewable energy power operation and maintenance which IIFCL also plans to introduce a the Indian Biomass power India Infrastructure reduction in costs. Some mega scale plants, the key concern for lenders includes tasks such as setting up a renewable energy based power sustainable feedstock supply chain mezzanine financing scheme. This will market? Where do you see Finance Company Ltd is the viability of distribution be useful for the developer as instead (IIFCL) on the role of projects have already achieved grid companies (the counter party in this which will ensure constant supply of scope of improvement with parity and soon most renewables fuel for the power plant. The of increasing equity funding which is innovative financing case) and their ability to buy power more costly, they can avail of regards to the financing instruments to promote will achieve it and cost of generation and make timely payments to the developers also need to plan the project in detail, especially the subordinate debt. aspect of the biomass renewable energy sector may go below the present tariff developers. There have been instances management of operations and have rates. The renewable energy target where distribution companies power market? in India, particularly a good understanding of the various What are the other Biomass power. of 175GW as defined by the (DISCOMs) have defaulted or The biomass sector needs to be Government of India can be factors affecting the power plant. initiatives in the pipeline rejuvenated. Looking at the sector delayed their payments to the There should be adequate focus on achieved provided a few challenges for IIFCL? from a financing perspective, new developers, thereby rendering the assessing management capability and innovative financing schemes need to are dealt proficiently. The key power plant unviable. Thus, the bandwidth while sanctioning We believe that more funds can be introduced. The green bond requirement is enhancing capacity in health of the counter party is of subsidies/other incentives for biomass be channelized from the banking market in India needs to be the system - capacity to lend to the prime concern for the lenders. power plants such that projects which sector and incentives can be given to strengthened. Such bonds have an renewable energy sector, capacity to Currently, the renewable energy get selected honour their the renewable energy sector. Capacity to lend to advantage of providing long tenure implement projects in a timely sector is performing well relatively contracts/PPAs appropriately. Infrastructure debt funds (IDFs) can loans which will be beneficial to the the renewable energy manner, capacity for proper power compared to the thermal power be evaluated as an option to evacuation and capacity to pay for channelize more debt. IIFCL has developers in the renewable energy sector, but we need to realize that it’s Could you elaborate on sector. Even initiatives such as the power need to be looked into. already embarked on this path and sector, capacity to the same counter parties for both some of the steps been mezzanine financing through sub- thermal and renewable energy based set up IDFs. We are currently in the taken by IIFCL to promote process of setting up a Infrastructure debt or even refinancing schemes implement projects What in your opinion are power plants and thus it is extremely RE sector financing? Debt Fund of INR 1000 crores such as the one being introduced by in a timely manner, the present challenges or important that the health of discoms IREDA can help give the biomass One of the key initiatives specifically for green initiatives. Such is improved to accelerate the progress funds have more flexibility in terms of power market a much needed push. capacity for proper the key deterrents for of renewable energy deployment. undertaken by IIFCL, was to get flexible structuring for infrastructure investments in the The second key challenge is power evacuation projects (of which electricity Mr. S. B. Nayar, Chairman & Managing Director (CMD) of India renewable energy sector transmission of renewable power generation is a sub-set) approved by Infrastructure Finance Company Limited (IIFCL), possesses rich experience and capacity to pay which is currently a bottle neck (especially biomass RBI. Better known as 5/25 scheme, of around 37 years in finance and banking industry. A certified Associate in many plants. Proper evacuation of lenders can now fix longer for power need to be power) in India? renewable energy power from its amortization period for loans to Member of Indian Institute of Bankers, Mr. Nayar started his career at enhanced At a macro level, renewable generation source and maintaining projects in the infrastructure sector, State Bank of India as an Officer in 1976. Immediately, prior to joining energy falls under the power sector the stability of the central grid with for say 25 years (instead of 12-15 IIFCL, Mr. Nayar was the CEO& MD of IFCI Limited. Mr. Nayar had also been and most banks have reached their increasing proportion of renewables years earlier) based on the economic the member of the High Level Committee on Financing Infrastructure of sectoral caps for lending to the in the total electricity mix will be key life of the asset, with periodic Government of India, under the auspicious of the Planning Commission. sector. This is adversely affecting the to future growth. refinancing, say every 5 years. Large

16 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 17 INDUSTRY SPEAK Other challenges plaguing the sector include immature biomass Continuous innovations required to overcome fuel related struggle supply chain, high transportation Dee Piping Sytems commissioned the first of its kind, a 6 MW biomass costs, etc. based power generation project for Malwa Power Private Limited (MPPL) Targeted Interventions Needed All these factors have created in April 2005. During the first year of operations, MPPL’s biomass plant significant business risks for the was operated on rice husk, which was available at reasonable prices in investor. Financial institutions have 2005-06. The first major problem arose when the price of rice husk shot to Re-build Investor Sentiment increased the rate of interest for up with the increase in the state’s industrial growth, while biomass power biomass segment, given the tariffs remained stagnant at Rs 3.49 per kWh. As a result, it became increasing fuel risk and high cost of unviable for us to use this fuel for power generation. The firm, therefore, operation. Also, the term loans have shifted to cotton stalks. However, a key challenge in using cotton stalks for Biomass Power sector been given on a short tenure, was transporting large volumes of the material from remote areas. In thereby not allowing these projects order to tackle this issue, the company decided to set up open purchase to create any liquidity. Moreover, centres in remote areas to help farmers sell cotton stalks at their door the sector has not had backing of step. In the first phase, 8-10 such centres were set up in 2006-07 by foreign investment unlike the wind taking land on lease. The results were encouraging and the company Biomass-based power projects Challenges related to fuel and solar sector, which have mostly succeeded in procuring 50,000 metric tonnes (MT) of wet cotton stalks are amongst the best examples of been in limelight in renewable (25,000 MT in dry form) against the annual fuel requirement of 70,000 how technology can be leveraged availability and tariffs space. MT. However, transportation in an unchipped form over a distance of for social benefit by creating a viable have deterred investors in more than 40-50 km was a challenge. We, therefore, installed chipping socio-economic business model. the past Positive steps by policy machines at the purchase sites for storage in dry form. In 2007-08, with India being an agricultural economy about 25 collection centres equipped with chipping and transportation Renewable energy segments like makers ensuring revival has always wanted to harness the arrangements, the company succeeded in procuring over 100,000 MT of wind, solar and hydro are bound by true potential of biomass and of sentiment wet cotton sticks (50,000 MT in dry form), the highest ever collected in one or more natural limitations like available agro-waste which has a Central Electricity Regulatory the state so far. During the same year, the plant recorded a plant load geographical location, weather, etc. potential of 18 GW capacity. The Commission (CERC) and the Ministry factor (PLF) of 92 per cent, the highest in its ten years of operations. Govt. has set very ambitious targets For example wind energy generation of New and Renewable Energy is confined to coastal areas and K.L Bansal, Chairman for Renewable Energy and is aiming (MNRE) have already acknowledged Soon thereafter, following MPPL, several brick kiln owners and other desert, solar energy depends upon & Managing Director, to develop 10 GW of Biomass that the biomass sector is facing captive users began opting for cotton sticks as fuel material, thereby Dee Piping Systems weather conditions such as cloud intensifying the competition and driving cotton stick prices upwards. capacity by 2022. These biomass challenges and have formed task cover, rainfall, etc. and is limited to Unable to procure cotton sticks at the increased prices, the company power projects not only provide force committees as well to remove few hours during the day and hydro switched to using biofuels such as dry leaves from plantations. Over time, clean power but also good these barriers. power plants is mostly effective in it started sourcing other agro-waste such as wild grass, sarkanda, nadda, employment opportunities in rural The revised regulations notified hilly areas. Contrary to these, juliflora, wheat straw, gowara straw and moong straw. However, the areas and thus contribute in the by Central Electricity Regulatory biomass power has no natural commissioning of new biomass plants in 2009-10 in the adjoining areas, development of the nation. Commission (CERC) in May 2014 for constraint apart from agricultural and that too with a higher tariff of Rs. 4.50 per unit (with annual biomass is a very welcome and However, we have not been able waste availability which is in escalation and provision of reviewed power tariffs as per biomass price timely step to resolve various to tap into the potential of this abundance across India but irregular escalation) under the NRSE Policy, 2006, presented a new set of problems faced by biomass sector appropriately. Biomass is the tariff policies and high fuel cost have challenges. The buying capacity of the new plants was much higher and marred the growth of this sector. developers in the sustained only renewable energy sector, for operation of their power plants. they started taking away the biomass by paying higher rates. In order to Successful models in which the fuel is not free for Revision of tariff by some of the CERC has acknowledged and tackle this issue, the company decided to change its fuel procurement operation though it is said to be State Electricity Regulatory recognized the issues and collected strategy by shifting to energy plantations. In the first phase, it planted place backed by abundantly available. Commissions has not kept pace with actual field level information/data 500 acres of Eucalyptus and 250 acres of Napier Bajra by hiring land with dense plantation on lease. The model did not achieve the desired results Currently, a lot of the biomass the increasing cost of biomass, from various stakeholders and effective tariff and contributed just 5% to the fuel mix. This was not enough to meet the projects across country are operating making biomass power plants performed systematic analysis of project’s fuel requirements, As a result of stagnant tariff and increased policies will revive at suboptimal capacity due to higher commercially unsustainable. Hence, various technical, financial, and change in tariff based on prevailing fuel costs the PLF for FY 12 and FY 13 dropped down to 70.6% and 47% fuel prices, inefficient fuel supply operational parameters before fuel cost has emerged as one of the approving normative values to these respectively. Then we focussed on developing mechanism for utilization of the sector again and chain mechanism or unviable tariffs key barriers to the faster growth of parameters critical for determination paddy straw agro waste as fuel for the biomass plant by playing a etc. This has a cascading effect on attract the investor the sector. of generic tariff for biomass power. supportive role in associating farmers with bailer machine manufactures future investments in the sector. Another important recommendation and gave them assurance of procuring the paddy straw waste at a good community. Because we have limited successful Also, biomass from agriculture is was to revise the fuel price annually price. We have achieved PLF of more than 75% during FY 14 and 77% in available only after harvesting period commercial demonstration model based on an independent survey. FY 15 after tariff revision and simultaneously we had developed which can stretch only for 2-3 months projects to showcase, investors are mechanism to utilize paddy straw fuel. not very keen in investing in Biomass in a year thus posing a challenge to State Electricity Regulatory fuel availability for the whole year. Commissions must take cognizance projects. will give a positive thrust to the sector. Thus there is a need to procure and of the revised regulations notified by However, we believe that with store required quantity of biomass Central Electricity Regulatory Most importantly, these amended norms should be applicable to existing successful models in place backed by within this stipulated time which Commission (CERC) and pass on the plants as well and State regulatory must take some step in that context. effective tariff policies the sector will requires huge investments and is benefits to the biomass power Andhra Pradesh Commission has already passed an order and amended the revive again and attract the investor one of the key concerns of producers so that their plants can norms for existing plants. (Haryana has also considered the CERC community. developers and investors. run economically. This definitely recommendations.)

18 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 19 INDUSTRY SPEAK Other challenges plaguing the sector include immature biomass Continuous innovations required to overcome fuel related struggle supply chain, high transportation Dee Piping Sytems commissioned the first of its kind, a 6 MW biomass costs, etc. based power generation project for Malwa Power Private Limited (MPPL) Targeted Interventions Needed All these factors have created in April 2005. During the first year of operations, MPPL’s biomass plant significant business risks for the was operated on rice husk, which was available at reasonable prices in investor. Financial institutions have 2005-06. The first major problem arose when the price of rice husk shot to Re-build Investor Sentiment increased the rate of interest for up with the increase in the state’s industrial growth, while biomass power biomass segment, given the tariffs remained stagnant at Rs 3.49 per kWh. As a result, it became increasing fuel risk and high cost of unviable for us to use this fuel for power generation. The firm, therefore, operation. Also, the term loans have shifted to cotton stalks. However, a key challenge in using cotton stalks for Biomass Power sector been given on a short tenure, was transporting large volumes of the material from remote areas. In thereby not allowing these projects order to tackle this issue, the company decided to set up open purchase to create any liquidity. Moreover, centres in remote areas to help farmers sell cotton stalks at their door the sector has not had backing of step. In the first phase, 8-10 such centres were set up in 2006-07 by foreign investment unlike the wind taking land on lease. The results were encouraging and the company Biomass-based power projects Challenges related to fuel and solar sector, which have mostly succeeded in procuring 50,000 metric tonnes (MT) of wet cotton stalks are amongst the best examples of been in limelight in renewable (25,000 MT in dry form) against the annual fuel requirement of 70,000 how technology can be leveraged availability and tariffs space. MT. However, transportation in an unchipped form over a distance of for social benefit by creating a viable have deterred investors in more than 40-50 km was a challenge. We, therefore, installed chipping socio-economic business model. the past Positive steps by policy machines at the purchase sites for storage in dry form. In 2007-08, with India being an agricultural economy about 25 collection centres equipped with chipping and transportation Renewable energy segments like makers ensuring revival has always wanted to harness the arrangements, the company succeeded in procuring over 100,000 MT of wind, solar and hydro are bound by true potential of biomass and of sentiment wet cotton sticks (50,000 MT in dry form), the highest ever collected in one or more natural limitations like available agro-waste which has a Central Electricity Regulatory the state so far. During the same year, the plant recorded a plant load geographical location, weather, etc. potential of 18 GW capacity. The Commission (CERC) and the Ministry factor (PLF) of 92 per cent, the highest in its ten years of operations. Govt. has set very ambitious targets For example wind energy generation of New and Renewable Energy is confined to coastal areas and K.L Bansal, Chairman for Renewable Energy and is aiming (MNRE) have already acknowledged Soon thereafter, following MPPL, several brick kiln owners and other desert, solar energy depends upon & Managing Director, to develop 10 GW of Biomass that the biomass sector is facing captive users began opting for cotton sticks as fuel material, thereby Dee Piping Systems weather conditions such as cloud intensifying the competition and driving cotton stick prices upwards. capacity by 2022. These biomass challenges and have formed task cover, rainfall, etc. and is limited to Unable to procure cotton sticks at the increased prices, the company power projects not only provide force committees as well to remove few hours during the day and hydro switched to using biofuels such as dry leaves from plantations. Over time, clean power but also good these barriers. power plants is mostly effective in it started sourcing other agro-waste such as wild grass, sarkanda, nadda, employment opportunities in rural The revised regulations notified hilly areas. Contrary to these, juliflora, wheat straw, gowara straw and moong straw. However, the areas and thus contribute in the by Central Electricity Regulatory biomass power has no natural commissioning of new biomass plants in 2009-10 in the adjoining areas, development of the nation. Commission (CERC) in May 2014 for constraint apart from agricultural and that too with a higher tariff of Rs. 4.50 per unit (with annual biomass is a very welcome and However, we have not been able waste availability which is in escalation and provision of reviewed power tariffs as per biomass price timely step to resolve various to tap into the potential of this abundance across India but irregular escalation) under the NRSE Policy, 2006, presented a new set of problems faced by biomass sector appropriately. Biomass is the tariff policies and high fuel cost have challenges. The buying capacity of the new plants was much higher and marred the growth of this sector. developers in the sustained only renewable energy sector, for operation of their power plants. they started taking away the biomass by paying higher rates. In order to Successful models in which the fuel is not free for Revision of tariff by some of the CERC has acknowledged and tackle this issue, the company decided to change its fuel procurement operation though it is said to be State Electricity Regulatory recognized the issues and collected strategy by shifting to energy plantations. In the first phase, it planted place backed by abundantly available. Commissions has not kept pace with actual field level information/data 500 acres of Eucalyptus and 250 acres of Napier Bajra by hiring land with dense plantation on lease. The model did not achieve the desired results Currently, a lot of the biomass the increasing cost of biomass, from various stakeholders and effective tariff and contributed just 5% to the fuel mix. This was not enough to meet the projects across country are operating making biomass power plants performed systematic analysis of project’s fuel requirements, As a result of stagnant tariff and increased policies will revive at suboptimal capacity due to higher commercially unsustainable. Hence, various technical, financial, and change in tariff based on prevailing fuel costs the PLF for FY 12 and FY 13 dropped down to 70.6% and 47% fuel prices, inefficient fuel supply operational parameters before fuel cost has emerged as one of the approving normative values to these respectively. Then we focussed on developing mechanism for utilization of the sector again and chain mechanism or unviable tariffs key barriers to the faster growth of parameters critical for determination paddy straw agro waste as fuel for the biomass plant by playing a etc. This has a cascading effect on attract the investor the sector. of generic tariff for biomass power. supportive role in associating farmers with bailer machine manufactures future investments in the sector. Another important recommendation and gave them assurance of procuring the paddy straw waste at a good community. Because we have limited successful Also, biomass from agriculture is was to revise the fuel price annually price. We have achieved PLF of more than 75% during FY 14 and 77% in available only after harvesting period commercial demonstration model based on an independent survey. FY 15 after tariff revision and simultaneously we had developed which can stretch only for 2-3 months projects to showcase, investors are mechanism to utilize paddy straw fuel. not very keen in investing in Biomass in a year thus posing a challenge to State Electricity Regulatory fuel availability for the whole year. Commissions must take cognizance projects. will give a positive thrust to the sector. Thus there is a need to procure and of the revised regulations notified by However, we believe that with store required quantity of biomass Central Electricity Regulatory Most importantly, these amended norms should be applicable to existing successful models in place backed by within this stipulated time which Commission (CERC) and pass on the plants as well and State regulatory must take some step in that context. effective tariff policies the sector will requires huge investments and is benefits to the biomass power Andhra Pradesh Commission has already passed an order and amended the revive again and attract the investor one of the key concerns of producers so that their plants can norms for existing plants. (Haryana has also considered the CERC community. developers and investors. run economically. This definitely recommendations.)

18 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 19 industry speak

IN CONVERSATION WITH New interventions along plantation will surely help existing and project developers but also led biomass to perform and will to prevention of burning of paddy with continuation of contribute in improving the stubble in the nearby plant regions, existing initiatives will confidence of other prospective thereby decreasing the associated air help re-energize the developers and investor community. pollution. We believe other states “Banks need to Leverage the should also provide such subsidies sector The benefits which developers and further support the maximum used to get from sale of CDM credits Though policy makers have taken utilization of agro-waste and can are practically nil these days and that potentially extend the support to Positive Market Sentiment and positive steps to ensure the revival has contributed to making some of of the sector, more specific shredders and other chipping these projects unviable. interventions are required to re- machineries as well. energize the investor sentiment Another key aspect is to build a The biomass power sector has Direct more Capital towards towards the biomass power sector. successful fuel collection model matured over the years and the way Fiscal incentives such as 80% where we believe developers can MNRE and CERC are addressing the accelerated depreciation, play an instrumental role with practical problems faced by projects support from MNRE. Renewable Energy Sectors” concessional import duty, excise we believe that the sector will soon duty, tax holiday for 10 years etc., Also, the Punjab Government regain its momentum. Investors are available for biomass power is providing 50% subsidy on must also take the responsibility in projects but are not enough to balers which has enabled farmer making the world more sustainable support the growth of the sector. community to collect paddy straw and should consider Indian biomass sector as an opportunity and come Unless there is a revival of the in large quantities. The subsidy has of stakeholders. At YES Bank, forward to support the sector like YES Bank is one of the existing plants and viable feed in been in place for the last 3 years and we are moving the needle with they have supported solar and wind. tariffs in place, investors will not has benefitted not only the farmers few private banks actively interventions that include climate show further interest in the sector. involved in the renewable finance advocacy and action, and are one of the largest financers of Financial restructuring of Mr. Krishan Lalit Bansal is the founder and Chairman & Managing Director energy sector. What were renewable energy among the private outstanding loans for which MNRE of DEE Piping Systems, one of the leading international engineering key drivers for the bank lenders, and earlier this year, has already initiated the process and enterprises offering single source solution for piping systems to power launched India’s first ever green extended working capital finance and other process sectors and operating two Biomass Power Plants in the for entering this domain? infrastructure bonds, the proceeds during seasonal procurement season state of Punjab. He holds a degree in Mechanical Engineering from Punjab How do you see the of which would be used to finance (Oct. to Dec.) and allocation of Engineering College. renewable energy market green infrastructure projects degraded land for in-house energy BioPower India spoke shaping up in India? including wind, solar, biomass and to Ms Namita Vikas, small hydro. Senior President and The global challenges of food, Country Head – energy and water security, in Over the next decade, India Responsible Banking, addition to emerging climate crisis, faces some of the biggest financing YES Bank on the role demand a surge forward towards a challenges – ending financial of innovative financing “new-normal” where governments exclusion for millions of Indians, instruments to and organizations need to transcend providing modern infrastructure and promote renewable from a reactive to a proactive mode. secure water access to all its citizens, energy sector in India, We believe that banks being central investing in enterprises and particularly biomass to economy, are harbingers of institutions that can provide power. industry action. As banks finance livelihoods to millions of job seekers growth and development, and in a entering the workforce each year. way, the emissions associated with Apart from this, India has committed them, it is important for the sector to achieving 100GW solar, 60 GW to play a leadership role in India’s wind, 10 GW bio, 5 GW small response to sustainability hydropower by 2022, which means development. that Indian financial system has to stretch to meet these aspirations. YES BANK has always placed considerable emphasis on providing banking and financial solutions to What’s your view on Sunrise sectors of the Indian financing the RE sector economy. Renewable energy is one (especially biomass such focus identified by the Bank power) in India? What are which also fits in perfectly with YES BANK’s Responsible Banking ethos of the present challenges for mainstreaming a business case for investments in this sustainability across a wide spectrum sector?

20 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 21 industry speak

20 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 21 in conversation with

Given India’s broadened example, the RBI recently included Do market based Javadekar as well, who proposed India, look at clean energy to fill development agenda, it is crucial to renewable energy in Priority Sector From a financial sector a green credit that can spur the this production gap, while at align the financial system with Lending (PSL) requirements. As per mechanisms such as CDM flow of critical technologies from the same time move away sustainable development. India has the RBI guidelines, banks can lend perspective, one of the credits and RECs play a developed economies. from thermal based production. some extremely capital-intensive up to a limit of INR 15 crore to biggest deterrents to role in incentivizing At present, the installed development targets, which must solutions like solar based power formal lending in What’s your outlook for Renewable energy capacity in India be achieved in parallel to its shift growth of the biomass generators, biomass based power is about 37 GW and if it has to reach towards being a low carbon sustainability linked the Indian renewable generators, wind mills, micro-hydel power projects in India? the 175 GW target by 2022, must growth trajectory. With its stated energy market? plants, and for non-conventional sectors is the perceived Biomass projects qualify for CDM keep adding over 20 GW capacity commitment to achieving 175 GW in energy based public utilities such as high risk. There is a strong benefits, and benefit from the fact Even as of now, close to 300 every year. We believe this is an renewable energy capacity, including street lighting systems, and remote that they are of relatively low cost million Indians do not have access to achievable target, and an optimistic 10 GW of biomass, India will require business case for creating village electrification. and are backed with sound electricity, which underlines the approach by the government opens massive public and private financing risk guarantees for lenders technology. However, given the importance of scaling up India’s up a plethora of opportunities for which is both an opportunity and a In a move that signals progress, that can mitigate some of current state of the CDM power generation capacity. At the finance sector in accelerating challenge. the recent Indian union budget has present, more than two-thirds of allocated around USD 525 million these perceived risks mechanism, where Certified green business. In the last few years, viability of Emission Reduction (CER) rates are at India’s power production capacity is (INR 3200 crores) towards water Overall, In the Indian context, as renewable energy projects has one of their lowest since they were thermal based. Given that globally, security, renewable energy including the market is ripe with new significantly improved, and with first mooted, they are becoming less energy production contributes USD 82 million to Ultra Mega Solar investments, banks need to look at improved technology, improved At the 1st Renewable Energy popular as an incentive. Additionally, highest to carbon emissions Power Projects and implementation leveraging this positive market business models with lower risks, Global Investors Meet & Expo (RE- there is almost zero market trade (approximately a quarter of total of the Green Energy Corridor Project, sentiment and direct more capital and stronger government backing Invest 2015) hosted by the Ministry happening. Alternatives to the CDM emissions), it is extremely important which will be accelerated to facilitate towards renewable energy sectors. (financial and policy), the RE sector of New and Renewable Energy, that mechanism, global financing for energy starved nations, such as the evacuation/transfer of renewable has been able to attract strong was held earlier this year, YES BANK mechanisms such as the Green energy across the country. funding support. was the first Bank to have made a Climate Fund and Global The government also recently out commitment of funding 5,000 MW Environment Facility can be used to Ms. Namita Vikas spearheads sustainable development, climate action However, as a funding institution, laid INR 100 Crore towards “National of renewable energy projects by fund clean technology in the the challenges we often encounter and CSR at YES BANK. As a climate action specialist, she has been elected Adaptation Fund” to meet the 2020. The bank was also a pro bono developing economies. in financing renewable energy to Global Steering Committee of United Nations Environment Program- vagaries of climate change. However, knowledge partner for the meet. include land acquisition, rapidly Having a credible, certified Finance Initiative (UNEP FI) and is Vice Chair of UN Natural Capital effective execution will be critical to Last year, the bank had also made a evolving technology, and the fact scheme such as the CDM is Declaration (NCD). She was also elected as the UNEP FI Chairperson for actualize the benefits of these commitment of funding 500 MW of that most players in this segment are necessary to drive carbon emissions APAC. In addition, she serves on YES FOUNDATION board and guides its initiatives from both public and Clean Energy projects at the United offsetting initiatives in the private still small. But there are few overall strategy. Ms. Vikas holds qualification in CSR, sustainability mitigating factors as well, for private sector, with facilitation from Nations Climate Change Summit sector, and provide a credible (Svenska Institutet), economics (Mumbai University) and is a certified example, the longer term risks are financial institutions, which are the 2014 in New York, where it was the route for finances to flow into mitigated by ensuring power conduits of capital. Similarly, the only Indian bank attending. developing economies. This was independent director with around 26 years of experience. Green Climate Fund12 can be a generating firms receive generation- To fund its commitments, YES recently proposed by Shri Prakash source of funds for biomass projects based incentives (GBI). BANK issued India’s FIRST ever Green once it goes live. The government has Infrastructure Bonds raising an institutionalized funds towards From a financial sector amount of INR 1,000 crore. The climate action which need to be perspective, one of the biggest issue, launched on February 16, disseminated in a speedy manner. deterrents to formal lending in 2015 witnessed very strong demand Single window and speedy sustainability linked sectors is the from leading investors. The bonds clearances of projects contributing perceived high risks. There is a are for a tenor of 10 years and the to climate action would fast track strong business case for creating risk amount raised will be used to projects. guarantees for lenders that can finance green infrastructure projects mitigate some of these perceived in renewable energy including solar What specific inter- risks. power, wind power, biomass, and small hydel projects. ventions are required to What are the steps being address these gaps and Most recently, YES BANK further taken by YES Bank to raised INR 315 crore through the re-kindle the growth of promote and accelerate issuance of Green Infrastructure this sector? Bonds to the International Finance the growth of Renewable In general for the entire RE Corporation, marking the first ever sector, greater policy & regulation Energy (particularly investment by IFC in an emerging intervention would help finances Biomass) based projects market green bond. flow smoothly into the sector. For in the country?

12 The Green Climate Fund (GCF) is a fund within the framework of the UNFCCC founded at COOP 16 as a mechanism to assist developing countries in adaptation and mitigation practices to counter climate change.

22 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 23 in conversation with

22 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 23 INDUSTRY SPEAK A complete societal all that power to end-users. Lagging transmission capacity Distributed generation impact system approach growth has already brought has an important role to down the average Plant Load can give India a unique play all the way from the Make Renewable Energy leap-frog opportunity Factor to 65% by the beginning of 2015. smartest of cities to the India and other developing most remote of countries have had the opportunity – Distributed co-generation from Technologies Work Together to to watch the policies and solid fuels such as biomass, has underdeveloped areas investments in solar and wind, and an absolute key role to play in an has a unique opportunity to learn energy system that is built with a societal impact and local situations of rapid urbanization Create True Impact, Growth from it and leap-frog to the next where high energy density is generation energy system, just like prosperity building as the main criteria – and what other criteria required and heavy infrastructure they had, and took, the opportunity cannot keep up with the urban to largely skip a fixed telephony for a is of any relevance at the end of and Prosperity the day. sprawl. It also reduces energy system mobile ditto, and also with the inter- complexity while ensuring control net now. and energy security through local Distributed co-generation Key to building a resilient energy sourcing and operation. Distributed system for growth and prosperity is from biomass as a tool generation has an important role to to avoid a silo approach; and to look play all the way from the smartest of Biomass is on the verge of Report from REN21; the renewable for societal impact and at how not only power, but also cities to the most remote of making a big comeback into the energy sector attracted $270bn in local prosperity building thermal energy, fits into the underdeveloped areas. modern energy system – in the investment in 2014, representing complete societal system. And The Indian government clearly shape of its incarnation 58.5% of net addition to global High final energy efficiency from gasification realize that there is not one or two understands that biomass is an . These are power capacity. thermal generation based co-generation silver bullet technologies, no one important part of a future energy highly energy efficient and advanced The Energiewende model from ready made and functioning system system. A biomass potential of Bringing down scale, turns high temperature technologies that Germany was long considered a solution to import and implement; 18GW has been established, a target ‘excess heat’ into ‘success heat’. The can play pivotal roles in energy leading reference model for this but rather look at local demand and of 10GW by 2022 has been fixed, 1.5+ MWth of thermal energy from systems, and support growth and shift; and to a large extent inspired potential supply and infrastructure – tariffs are being fixed, and investors a 1MWe cogeneration plant can prosperity building while respecting by the German model, almost $150 and come up with a truly Indian are invited to invest in biomass. provide onsite heat and steam for flora, fauna and human needs. billion of investment has gone into manufacturing industries or power Aditya Sharma, solution where resilience, final But more can be done to solar technologies and $90 billion Senior VP Asia, Biomass’ key contributions to the energy efficiency, and cost efficiency cold storage that would boost food into wind technologies globally in understand the vast potential of Boson Energy SA future proof energy system are; is the mantra. security and/or reduce produce 2014. India, on its part, has set an distributed co-generation from a complete system impact perspective. – Distributed generation for ambitious plan to add 100GW of – Intermittent technologies carry redundancy, speed of high hidden costs from an And implement processes to ensure solar energy capacity and 60 GW of Bringing down scale, deployment, and cost; wind projects by 2022 – most of energy- and societal system that the total cost and benefits to society are considered and evaluated turns ‘excess heat’ into – Thermal generation for high them at utility scale. perspective and will continue to do so for a long time to come. when PPAs or project proposals are ‘success heat’ final energy efficiency; Investments in utility scale solar Recent studies in India as well evaluated. Rather than pitting and wind in Germany has been – Local fuel sourcing for social confirm this picture. ‘Free fuel’ is technology X against technology Y and economic impact by creating driven by subsidies, fiscal incentives, wastage in a rural area considerably. far from free. In addition to on a limited set of factors; many jobs, reducing waste, and use of and grid priority. It has created an Or both power and cool hospitals, hidden costs there is also land situations call for a base of solution marginalized land for plantation; impressive installed name-plate X, a section of solution Y, and data centres, and office complexes. base, but has also resulted in a) high use; and in the case of CSP in complemented with technology Z. Local long-term jobs and – Municipality approved incentive costs, b) massive India typically astonishing revenues from local fuel sourcing In solutions for complete location infrastructure investments to cope amounts of water consumed per Distributed co-generation from Heike Zatterstrom, flexibility, and; with prioritised intermittent MWe produced, in areas where biomass for instance has a number contrast to ‘free fuel’ solutions, CCO, Boson Energy SA biomass co-generation becomes a – Reliable baseload energy in generation in the grid, and c) a there is little of it. But of characteristics that India should positive part of the local socio- commercial scale for a local complete profitability crash in intermittent generation have ideally be considered in any entrepreneurial eco-system. conventional centralised generation. their place in the system, no evaluation process: economic system and improves the Distributed biomass A conventional generation that doubt about it. regional trade balance. It creates Speed, flexibility and redundancy remains (a crippled but vital) local jobs at all skill levels – from based co-generation Renewable energy on the – Conventional centralized large- backbone of the German energy of distributed generation biomass supply, to operation and world scene scale generation has its place maintenance. And in agricultural is a vital complement system, just as it does in most too, with the massive power Many small units hooked up to The world over, an unprece- regions it can create revenues from economies – and in several European demand growth that will interconnected mini-grids can create to an energy system dented amount of investment is countries incentives to intermittent both crop residue problems and continue. But adding capacity redundancy by design over large going into renewable energy. As per generation are now being reduced marginalized land. with centralized takes time, land, and money; areas, without requiring costly and the Renewables 2015 Global Status or removed. solar and wind and it is costly and slow to time-consuming transmission Low environmental impact to build a grid that can deliver investments. Especially important in communities and environment

24 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 25 INDUSTRY SPEAK A complete societal all that power to end-users. Lagging transmission capacity Distributed generation impact system approach growth has already brought has an important role to down the average Plant Load can give India a unique play all the way from the Make Renewable Energy leap-frog opportunity Factor to 65% by the beginning of 2015. smartest of cities to the India and other developing most remote of countries have had the opportunity – Distributed co-generation from Technologies Work Together to to watch the policies and solid fuels such as biomass, has underdeveloped areas investments in solar and wind, and an absolute key role to play in an has a unique opportunity to learn energy system that is built with a societal impact and local situations of rapid urbanization Create True Impact, Growth from it and leap-frog to the next where high energy density is generation energy system, just like prosperity building as the main criteria – and what other criteria required and heavy infrastructure they had, and took, the opportunity cannot keep up with the urban to largely skip a fixed telephony for a is of any relevance at the end of and Prosperity the day. sprawl. It also reduces energy system mobile ditto, and also with the inter- complexity while ensuring control net now. and energy security through local Distributed co-generation Key to building a resilient energy sourcing and operation. Distributed system for growth and prosperity is from biomass as a tool generation has an important role to to avoid a silo approach; and to look play all the way from the smartest of Biomass is on the verge of Report from REN21; the renewable for societal impact and at how not only power, but also cities to the most remote of making a big comeback into the energy sector attracted $270bn in local prosperity building thermal energy, fits into the underdeveloped areas. modern energy system – in the investment in 2014, representing complete societal system. And The Indian government clearly shape of its incarnation 58.5% of net addition to global High final energy efficiency from gasification realize that there is not one or two understands that biomass is an . These are power capacity. thermal generation based co-generation silver bullet technologies, no one important part of a future energy highly energy efficient and advanced The Energiewende model from ready made and functioning system system. A biomass potential of Bringing down scale, turns high temperature technologies that Germany was long considered a solution to import and implement; 18GW has been established, a target ‘excess heat’ into ‘success heat’. The can play pivotal roles in energy leading reference model for this but rather look at local demand and of 10GW by 2022 has been fixed, 1.5+ MWth of thermal energy from systems, and support growth and shift; and to a large extent inspired potential supply and infrastructure – tariffs are being fixed, and investors a 1MWe cogeneration plant can prosperity building while respecting by the German model, almost $150 and come up with a truly Indian are invited to invest in biomass. provide onsite heat and steam for flora, fauna and human needs. billion of investment has gone into manufacturing industries or power Aditya Sharma, solution where resilience, final But more can be done to solar technologies and $90 billion Senior VP Asia, Biomass’ key contributions to the energy efficiency, and cost efficiency cold storage that would boost food into wind technologies globally in understand the vast potential of Boson Energy SA future proof energy system are; is the mantra. security and/or reduce produce 2014. India, on its part, has set an distributed co-generation from a complete system impact perspective. – Distributed generation for ambitious plan to add 100GW of – Intermittent technologies carry redundancy, speed of high hidden costs from an And implement processes to ensure solar energy capacity and 60 GW of Bringing down scale, deployment, and cost; wind projects by 2022 – most of energy- and societal system that the total cost and benefits to society are considered and evaluated turns ‘excess heat’ into – Thermal generation for high them at utility scale. perspective and will continue to do so for a long time to come. when PPAs or project proposals are ‘success heat’ final energy efficiency; Investments in utility scale solar Recent studies in India as well evaluated. Rather than pitting and wind in Germany has been – Local fuel sourcing for social confirm this picture. ‘Free fuel’ is technology X against technology Y and economic impact by creating driven by subsidies, fiscal incentives, wastage in a rural area considerably. far from free. In addition to on a limited set of factors; many jobs, reducing waste, and use of and grid priority. It has created an Or both power and cool hospitals, hidden costs there is also land situations call for a base of solution marginalized land for plantation; impressive installed name-plate X, a section of solution Y, and data centres, and office complexes. base, but has also resulted in a) high use; and in the case of CSP in complemented with technology Z. Local long-term jobs and – Municipality approved incentive costs, b) massive India typically astonishing revenues from local fuel sourcing In solutions for complete location infrastructure investments to cope amounts of water consumed per Distributed co-generation from Heike Zatterstrom, flexibility, and; with prioritised intermittent MWe produced, in areas where biomass for instance has a number contrast to ‘free fuel’ solutions, CCO, Boson Energy SA biomass co-generation becomes a – Reliable baseload energy in generation in the grid, and c) a there is little of it. But of characteristics that India should positive part of the local socio- commercial scale for a local complete profitability crash in intermittent generation have ideally be considered in any entrepreneurial eco-system. conventional centralised generation. their place in the system, no evaluation process: economic system and improves the Distributed biomass A conventional generation that doubt about it. regional trade balance. It creates Speed, flexibility and redundancy remains (a crippled but vital) local jobs at all skill levels – from based co-generation Renewable energy on the – Conventional centralized large- backbone of the German energy of distributed generation biomass supply, to operation and world scene scale generation has its place maintenance. And in agricultural is a vital complement system, just as it does in most too, with the massive power Many small units hooked up to The world over, an unprece- regions it can create revenues from economies – and in several European demand growth that will interconnected mini-grids can create to an energy system dented amount of investment is countries incentives to intermittent both crop residue problems and continue. But adding capacity redundancy by design over large going into renewable energy. As per generation are now being reduced marginalized land. with centralized takes time, land, and money; areas, without requiring costly and the Renewables 2015 Global Status or removed. solar and wind and it is costly and slow to time-consuming transmission Low environmental impact to build a grid that can deliver investments. Especially important in communities and environment

24 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 25 industry speak

Exceptionally low environmental biomass defending its position as an Conclusions (c) Societal Cost of Electricity Such a development would impact and community nuisance, in important part of a resilient energy (SCoE) generation: an An integrated approach attract foreign investment at a India has an opportunity to combination with the local socio- system. assessment of capital-, will help unlocking the different scale, and minimise the economic contribution makes adopt a societal impact- and operational-, and socio-economic need for fiscal support. prosperity building approach to the estimated 18GW of biomass gasification one of few 1 MWe cost on a complete system level Boson Energy is committed to development of a resilient energy ‘IMBY’ energy technologies per unit of generation, over the biomass potential – and contribute to realising the full system. We are pleased to see that (welcome ‘In My Back Yard’) as Biomass lifecycle of a particular project create more biomass energy potential in India – some steps are already taken in that opposed to any of the centralized 1 MWe 1 MWe (d) including research and skills direction through studies on socio- Local socio-economic and solutions that are all opposed in a : fundamentals before the development in a Centre of Capacity economic and environmental effects environmental impact BANANA way (‘Build Absolutely Utilisation 19% 20% 85% including local jobs and sourcing investment is written off. Excellence; capacity building across of different technologies. For Nothing Anywhere Near Anything’) Factor revenues, skills development, the complete value chain; and rolling creating very real issues with delays example under the MNRE-UNDP/GEF eco-system, nuisance, and An integrated approach will out distributed high-efficiency co- Power Project on “Removal of Barriers to help unlocking the estimated 18GW in permitting and committed rollout 1665 1755 7445 community acceptance. generation technology for biomass schedules. Output MWe Biomass Power Generation in India”. of biomass potential – and create to the market – together with global (e) Technology and project more. And develop clear economic and local partners. Low system costs and high Thermal KPIs that we encourage Risk of the drivers towards a structured, market - - 13400 resilience: energy security from local base load Output MWth government, industry, and investors technologies involved becoming driven feedstock supply chain with Please feel free to contact us at to apply widely when assessing obsolete or changing policies important certainty around quality, [email protected]. generation Final Energy 1665 1755 20845 complete system solutions include: affecting project business case quantity, and price. Base-load generation on small Output MWe+th industrial scale improves energy (a) Capacity Utilisation Factor Output security and can power local (CUF), capturing the ratio of Profile Aditya is responsible for developing Boson’s markets in Asia, and in particular India – where the focus is on smart industries and entrepreneurs, power generated compared to hospitals and schools, and remote Hidden Cost the name-plate capacity distributed energy solutions based on local solid fuels. Aditya has 17 years of India experience and 6 years in Europe, High High - working with global leaders in metals & mining, energy and finance. Aditya is a Certified Energy Risk Professional from communities; in a way that (Transm., (b) Final Energy Efficiency (FEE), intermittent generation cannot in Storage) demonstrating combined GARP, an MBA in Finance, a Cost and Management Accountant and also a Chartered Secretary with fellowship. a cost effective way. Local Long efficiency in delivering energy in See the illustration for an term jobs the final form in which it is consumed overview of several key factors – and Boson Energy SA, 2015 (Solar and wind CUF from MNRE/CSE) Heike is a seasoned strategy-, management-, and communications consultant. Prior to Boson, he spent eight years with Gurgaon based global research- and analytics power house Evalueserve – focused on operations and business development primarily in Europe. He has also spent three years at AOL Europe, where he was the lead- client of analytics services executed from India. Heike holds an MSc in Accounting & Managerial Finance and Marketing from the Stockholm School of Economics, Sweden.

26 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 27 • Projects that have obtained tariff regulations for the next control 1. Delay in commissioning of the Policy Updates infrastructure clearance under period has not been completed yet, new NRSE Projects by developers earlier policy will get the benefits the Commission is of the view that during FY 14-15. mentioned under the prevailing the MERC Order in Case No. 100 of 2. Failed to purchase Non-Solar policy. 2014 needs to be extended further RECs due to alleged financial upto 31 October, 2015. Biomass power projects: constraints faced by PSPCL. MSETCL/MSEDCL will help Source:http://www.mercindia.org.in/pdf/Order 3. Non-operationalization of four received by the project developer developers with grid evacuation of %2058%2042/Order-92%20of%202015- Punjab State Electricity Regulatory Commission 21072015.pdf Micro Hydel Power Projects of and not from the date of LV/HV/EHV projects and Grid. (PSERC) released determined renewable energy tariffs commissioning. PSPCL. for projects to be commissioned in FY 15-16 Source:http://www.pserc.nic.in/pages/Generic Incentives for project developer: Punjab Electricity 4. Non-revival of 10 MW rice straw %20Tariff%20Order%202015-16.pdf based project at Jalkheri. Issue Date – July 24, 2015 • Exemption from electricity duty Regulatory Commission 5. Low generation from the existing In May 2015, the commission had released a draft staff paper for for captive power plants for 10 Maharashtra Electricity (PSERC) takes stern steps / newly commissioned NRSE determination of the generic levellised generation tariff for RE Projects for FY years from the date of on RPO compliance note Projects. 2015-16 and solicited comments/suggestions from the stakeholders on the Regulatory Commission commissioning. same. after Punjab State Power (MERC) released the • Promotional elements will be Additionally PSPCL also stated After careful consideration of the comments/suggestions, the Commission Maharashtra Renewable applicable on projects which Corporation Limited that it was due to factors beyond control of PSPCL and RPO targets after revised Station Heat Rate (SHR) and Calorific Value (CV) as 4126 have got infrastructure clearance Energy Policy 2015 (PSPCL) filed petition being set by the commission are kCal/kWh and 3174 kCal/kg as against existing 4000 kCal/kWh and 3300 from MEDA from 1st April 2015 Issue Date – July 20, 2015 Issue – July 28, 2015 unachievable. However the reasons kCal/kg respectively for biomass based projects (considering the Second onwards and which get cited by PSPCL for shortfall in RPO Amendment, 2014 and Third Amendment, 2015 by CERC as brought out Under the new Renewable Energy The Punjab Electricity Regulatory commissioned. compliance for FY 2014-15 were not above post the Order of the Commission dated 05.09.2014). Policy, Maharashtra state has set a Commission (PSERC) in response to a accepted by the commission. The total target of 14,400 MW capacity • All projects shall get capital petition filed by Punjab State Power After considering all the submitted comments and suggestions the commission also stated that it does power projects based on new and subsidy up to 1 Cr from green Corporation Limited (PSPCL) commission released the final tariff. not accept the argument of alleged renewable energy sources to be energy fund. pertaining to RPO compliance of FY financial constraints of PSPCL as the Generic Tariff for RE technologies for FY 2015-16 installed in the next 5 years. Out of Source:http://www.mahaurja.com/PDF/MEDA_ 2014-15, in which the PSPCL had Commission had approved the this, 300MW would be of Biomass ConsolidatedPolicy2015.pdf requested the commission to carry FY 15-16 Levellised Variable Applicable Benefit of Net Applicable based power projects and 1,000MW amount of 98.00 crore exclusively forward the net shortfall in RPO ₹ Fixed Cost Cost (FY Tariff Rate Accelerated Tariff Rate of bagasse based cogeneration for this purpose. targets for FY 2014-15 of 811.51 (`/kWh) 2015- 16) (`/kWh) Depreciation, upon adjusting projects. Project specific guidelines Maharashtra Electricity MUs Non-Solar and 3.62 MUs solar The commission also cited the (`/kWh) if availed for Accelerated for biomass power are as follows: Regulatory Commission (`/kWh) Depreciation energy (excluding compliance of Hon’ble APTEL Judgment which has benefit (`/kWh) Bagasse /Agricultural co- (MERC) extends period of carry forward of 2013-14) to next issued directions to State Electricity Regulatory Commissions and Joint Biomass Power 2.70 5.06 7.76 0.18 7.58 generation projects: It will be applicability of generic financial year (FY 2015-16). Electricity Regulatory Commission to Projects (other mandatory for the project developers to sell power primarily to tariff order for renewable Earlier the commission had enforce RPO. Thus the Commissions than rice straw) allowed PCPCL to carry forward the with water any distribution licensee in the state energy are bound to enforce their respective for fulfilling the RPO at a unmet RPO of FY 13-14 to FY 14-15 RPO Regulations. Furthermore PEDA cooled condenser Issue – July 21, 2015 preferential tariff determined by which were be met along with the had also stated that PSPCL could Non-Fossil 2.23 4.57 6.80 0.14 6.66 MERC. After fulfilment of RPO of the Maharashtra Electricity RPO for FY 2014-15. PSPCL in its have made full RPO compliance by Fuel based distribution licensee the project Regulatory Commission determines petition provided the status of its arranging to purchase RE power Co-Generation developer will have the option of RPO compliance for FY 14-15 from outside the State and also by Projects the Generic Tariff for renewable captive use or third party sale within energy sources at the beginning of including for FY 2013-14, which is purchasing RECs. Biomass 2.66 4.86 7.52 0.13 7.39 or outside the state. each financial year. Accordingly the given in the table below 2014-15: Gasifier Power The commission in its judgement Projects Incentives for project developer: Commission has issued a suo moto has allowed carrying forward the • Exemption from supervision Order on 7 July, 2014 determining Net shortfall in RPO targets shortfall in RPO compliance for FY charges for setting up grid the Generic Tariff for RE technologies 2014-15 to FY 2015-16. This shall be Also, the Commission also observed that, the proceeds of carbon credit RPO FY 2014-15 FY 2013-14 evacuation arrangement. for the fifth year of the Control Non-Solar 811.51 MUs 178.14 MUs in addition to the RPO compliance from approved Clean Development Mechanism (CDM) project are to be • Exemption from electricity duty Period, i.e., FY 2014-15 which was for FY 2015-16 specified in the RPO shared between the generating company and concerned beneficiaries in the Solar 3.62 MUs 41.51 MUs for captive power plants for 10 applicable for new RE Projects Energy Regulations. Additionally the second year onwards after the Commercial Operation Date (COD) of the years from the date of commissioned during that Financial commission has directed PSPCL to generating station (According to CERC RE Regulations 2012 adopted by the Year. Since extended applicability of comply with the RPO obligations commissioning PSPCL in its petition for carry Commission).Thus 100% of the gross proceeds on account of CDM benefit are the Generic Tariff Order dated latest by 30th Dec 2015 and to be retained by the project developer in the first year after the COD and the • Exemption from sales tax on forward of RPO cited various communicated that failing which purchase of sugarcane (as 7 July, 2014 in Case No. 100 of share of beneficiaries shall be 10% in the second year and progressively reasons for non-compliance of further action as per regulations mentioned in Government 2014 is upto 31 July, 2015 and increase by 10% every year till it reaches 50%, where after the proceeds are to RPO. The reasons cited by PSERC may be initiated. resolution no. Bagasse- regulatory process for revising RE be shared in equal proportion. were: 2013/C.R.165/Energy-7 dated Source: http://www.pserc.nic.in/ It is, however, clarified that sharing of the CDM benefit, if any, shall be 31.01.2014 for all projects applicable after the sale proceeds from Carbon Emission Reductions (CERs) are having capacity more than 3MW (35 lacs units).

28 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 29 • Projects that have obtained tariff regulations for the next control 1. Delay in commissioning of the Policy Updates infrastructure clearance under period has not been completed yet, new NRSE Projects by developers earlier policy will get the benefits the Commission is of the view that during FY 14-15. mentioned under the prevailing the MERC Order in Case No. 100 of 2. Failed to purchase Non-Solar policy. 2014 needs to be extended further RECs due to alleged financial upto 31 October, 2015. Biomass power projects: constraints faced by PSPCL. MSETCL/MSEDCL will help Source:http://www.mercindia.org.in/pdf/Order 3. Non-operationalization of four received by the project developer developers with grid evacuation of %2058%2042/Order-92%20of%202015- Punjab State Electricity Regulatory Commission 21072015.pdf Micro Hydel Power Projects of and not from the date of LV/HV/EHV projects and Grid. (PSERC) released determined renewable energy tariffs commissioning. PSPCL. for projects to be commissioned in FY 15-16 Source:http://www.pserc.nic.in/pages/Generic Incentives for project developer: Punjab Electricity 4. Non-revival of 10 MW rice straw %20Tariff%20Order%202015-16.pdf based project at Jalkheri. Issue Date – July 24, 2015 • Exemption from electricity duty Regulatory Commission 5. Low generation from the existing In May 2015, the commission had released a draft staff paper for for captive power plants for 10 Maharashtra Electricity (PSERC) takes stern steps / newly commissioned NRSE determination of the generic levellised generation tariff for RE Projects for FY years from the date of on RPO compliance note Projects. 2015-16 and solicited comments/suggestions from the stakeholders on the Regulatory Commission commissioning. same. after Punjab State Power (MERC) released the • Promotional elements will be Additionally PSPCL also stated After careful consideration of the comments/suggestions, the Commission Maharashtra Renewable applicable on projects which Corporation Limited that it was due to factors beyond control of PSPCL and RPO targets after revised Station Heat Rate (SHR) and Calorific Value (CV) as 4126 have got infrastructure clearance Energy Policy 2015 (PSPCL) filed petition being set by the commission are kCal/kWh and 3174 kCal/kg as against existing 4000 kCal/kWh and 3300 from MEDA from 1st April 2015 Issue Date – July 20, 2015 Issue – July 28, 2015 unachievable. However the reasons kCal/kg respectively for biomass based projects (considering the Second onwards and which get cited by PSPCL for shortfall in RPO Amendment, 2014 and Third Amendment, 2015 by CERC as brought out Under the new Renewable Energy The Punjab Electricity Regulatory commissioned. compliance for FY 2014-15 were not above post the Order of the Commission dated 05.09.2014). Policy, Maharashtra state has set a Commission (PSERC) in response to a accepted by the commission. The total target of 14,400 MW capacity • All projects shall get capital petition filed by Punjab State Power After considering all the submitted comments and suggestions the commission also stated that it does power projects based on new and subsidy up to 1 Cr from green Corporation Limited (PSPCL) commission released the final tariff. not accept the argument of alleged renewable energy sources to be energy fund. pertaining to RPO compliance of FY financial constraints of PSPCL as the Generic Tariff for RE technologies for FY 2015-16 installed in the next 5 years. Out of Source:http://www.mahaurja.com/PDF/MEDA_ 2014-15, in which the PSPCL had Commission had approved the this, 300MW would be of Biomass ConsolidatedPolicy2015.pdf requested the commission to carry FY 15-16 Levellised Variable Applicable Benefit of Net Applicable based power projects and 1,000MW amount of 98.00 crore exclusively forward the net shortfall in RPO ₹ Fixed Cost Cost (FY Tariff Rate Accelerated Tariff Rate of bagasse based cogeneration for this purpose. targets for FY 2014-15 of 811.51 (`/kWh) 2015- 16) (`/kWh) Depreciation, upon adjusting projects. Project specific guidelines Maharashtra Electricity MUs Non-Solar and 3.62 MUs solar The commission also cited the (`/kWh) if availed for Accelerated for biomass power are as follows: Regulatory Commission (`/kWh) Depreciation energy (excluding compliance of Hon’ble APTEL Judgment which has benefit (`/kWh) Bagasse /Agricultural co- (MERC) extends period of carry forward of 2013-14) to next issued directions to State Electricity Regulatory Commissions and Joint Biomass Power 2.70 5.06 7.76 0.18 7.58 generation projects: It will be applicability of generic financial year (FY 2015-16). Electricity Regulatory Commission to Projects (other mandatory for the project developers to sell power primarily to tariff order for renewable Earlier the commission had enforce RPO. Thus the Commissions than rice straw) allowed PCPCL to carry forward the with water any distribution licensee in the state energy are bound to enforce their respective for fulfilling the RPO at a unmet RPO of FY 13-14 to FY 14-15 RPO Regulations. Furthermore PEDA cooled condenser Issue – July 21, 2015 preferential tariff determined by which were be met along with the had also stated that PSPCL could Non-Fossil 2.23 4.57 6.80 0.14 6.66 MERC. After fulfilment of RPO of the Maharashtra Electricity RPO for FY 2014-15. PSPCL in its have made full RPO compliance by Fuel based distribution licensee the project Regulatory Commission determines petition provided the status of its arranging to purchase RE power Co-Generation developer will have the option of RPO compliance for FY 14-15 from outside the State and also by Projects the Generic Tariff for renewable captive use or third party sale within energy sources at the beginning of including for FY 2013-14, which is purchasing RECs. Biomass 2.66 4.86 7.52 0.13 7.39 or outside the state. each financial year. Accordingly the given in the table below 2014-15: Gasifier Power The commission in its judgement Projects Incentives for project developer: Commission has issued a suo moto has allowed carrying forward the • Exemption from supervision Order on 7 July, 2014 determining Net shortfall in RPO targets shortfall in RPO compliance for FY charges for setting up grid the Generic Tariff for RE technologies 2014-15 to FY 2015-16. This shall be Also, the Commission also observed that, the proceeds of carbon credit RPO FY 2014-15 FY 2013-14 evacuation arrangement. for the fifth year of the Control Non-Solar 811.51 MUs 178.14 MUs in addition to the RPO compliance from approved Clean Development Mechanism (CDM) project are to be • Exemption from electricity duty Period, i.e., FY 2014-15 which was for FY 2015-16 specified in the RPO shared between the generating company and concerned beneficiaries in the Solar 3.62 MUs 41.51 MUs for captive power plants for 10 applicable for new RE Projects Energy Regulations. Additionally the second year onwards after the Commercial Operation Date (COD) of the years from the date of commissioned during that Financial commission has directed PSPCL to generating station (According to CERC RE Regulations 2012 adopted by the Year. Since extended applicability of comply with the RPO obligations commissioning PSPCL in its petition for carry Commission).Thus 100% of the gross proceeds on account of CDM benefit are the Generic Tariff Order dated latest by 30th Dec 2015 and to be retained by the project developer in the first year after the COD and the • Exemption from sales tax on forward of RPO cited various communicated that failing which purchase of sugarcane (as 7 July, 2014 in Case No. 100 of share of beneficiaries shall be 10% in the second year and progressively reasons for non-compliance of further action as per regulations mentioned in Government 2014 is upto 31 July, 2015 and increase by 10% every year till it reaches 50%, where after the proceeds are to RPO. The reasons cited by PSERC may be initiated. resolution no. Bagasse- regulatory process for revising RE be shared in equal proportion. were: 2013/C.R.165/Energy-7 dated Source: http://www.pserc.nic.in/ It is, however, clarified that sharing of the CDM benefit, if any, shall be 31.01.2014 for all projects applicable after the sale proceeds from Carbon Emission Reductions (CERs) are having capacity more than 3MW (35 lacs units).

28 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 29 policy updates

MISSION ACTIVITIES The Karnataka Electricity Regulatory Biogas and Biomass Gasifier Tariff Commission (KERC) has proposed an Regulations, 2015 amendment to its RPO (Renewable Issue Date – Sep 9, 2015 Purchase Obligation) regulation for On May 15, 2015 RERC had released a draft order Regional Workshop on Policy captive co-generation plants using fuel soliciting comments/suggestions from the stakeholders on the draft tariff order or the Biomass, Biogas and other than renewable energy sources. Biomass Gasifier based power plants getting and Regulatory Framework Issue Date – August 4, 2015 commissioned during FY 2015-16. The commission has The commission had issued regulations for now released the final order for FY 2015-16 procurement of energy from renewable sources The Commission has decided that total biomass fuel for Biomass Power Generation Regulations, 2011 which came into effect from April price for FY 2015-16 would be Rs 2743/MT (=Rs2643 as 2011. The regulation specified the obligation for every base price+ Rs 100/MT as average storage and feeding grid connected captive plant or captive co-generation charges) and it would be Rs 2875/MT (=Rs2775 with 5% plants having capacity exceeding 5 MW consuming from escalation on the base price of Rs2643/MT + Rs100/MT) sources other than renewable, to purchase a minimum of for FY 2016-17. 5% of its consumption from renewable source. A regional workshop on policy UNDP/GEF Biomass Power Project. of 108 sunshine countries is being Tariff for biomass based power plants getting and regulatory framework for He shared his visit experience to organized by MNRE in November The Hon’ble Appellate Tribunal for Electricity (ATE) commissioned during FY 2015-16 biomass power generation was Gussing District, Austria wherein 20 2015. On a separate note, he had passed an order on 10th April 2015, upholding the organized by Odisha Renewable grid connected gasifiers of size 2-3 suggested OREDA to be self-reliant exemption of co-generation plants from RPO obligation Water Cooled Condenser Air Cooled Condenser Energy Development Agency MW have been installed and are by implementing RE power plants after being challenged by a petition filed by GERC. The FY 2015-16 Without With AD Without With AD (OREDA) at Bhubaneshwar on 21st successfully operating. He described for income generation. commission thus after deliberating on this order decided Availing Benefit Availing Benefit August 2015 with funding support that proper biomass management not to impose RPO on any consumer utilizing electricity Shri GC Pati in his inaugural AD Availed AD Availed from the MNRE-UNDP/GEF Biomass practices and higher FiT for smaller generated from co-generation plants using fuel other Benefit Benefit address lauded the efforts of MNRE Power Project. power plants are the major reasons than renewable energy sources. and Government of India for Fixed charges 2.75 2.57 3.00 2.81 for the successful operation and Source: http://www.karnataka.gov.in/kerc/Downloads/COURT-ORDERS- A number of stakeholders bringing back renewable energy (Rs/kWh) both the approaches should be tried 2015/Order-04.08.2015 Impostition_of_Renewble_Purchase_Obligation.pdf (Levellised for participated in the workshop which in India. Dr. Srinivas, informed that from the fringes. He acknowledged 20 years) included state government officials, GBI for selected MW sized the importance of electricity for UP to announce Biomass Energy Policy project developers, technology Variable Charges 3.82 3.82 4.12 4.12 gasification power plants are industrial development and at the suppliers, bankers, researchers and 2015 (Rs/kWh) supported under the project, which same time expressed that damage to students from universities. Issue - August 28, 2015 Applicable Tariff 6.57 6.39 7.12 6.93 would generate the required data environment should be least in generation of electricity. Shri Pati, Uttar Pradesh is targeting 1,000 MegaWatt (MW) in (Rs/kWh) input to CERC for the consideration Inaugural Session informed that GoO is strongly the new draft of the UP Biomass Energy Policy 2015, of higher FiT. The inaugural session was committed to the RE cause and to which is being finalised. Uttar Pradesh has 592.5 MW of Tariff for biomass gasifier based power plants getting Guest of Honour, Shri Upendra attended by Shri GC Pati, Chief solve the issues faced by the RE, biomass power plants installed as on 31.03.2011 commissioned during FY 2015-16 Tripathy in his address recalled his Secretary, Govt. of Odisha, Shri especially biomass sector. He urged according to MNRE. UPNEDA is soliciting suggestions experience during his sub-collector Biomass Gasifier based power plants Upendra Tripathy, Secretary, MNRE, upon the nodal department for RE, from experts and general public before the government days where solar systems of 1 to 2 FY 2015-16 Without Availing With AD Govt. of India, Shri CJ Venugopal, Dept. of S&T, GoO to convene implements it. The policy would be effective for the next Watt were seen as an achievement AD Benefit Benefit Availed Principal Secretary, Sc & T Dept, regular meetings to sort the issues 10 years and be subject to amendments. and lauded the country for the Fixed charges Govt. of Odisha, Shri Sudarshan Das, faced by the developers. He also As per the policy a maximum of 2 acres of land current achievements in the (Rs/kWh) (Levellised Chief Executive, OREDA, Dr. SN thanked the Secretary, MNRE for per MW can be acquired for the biomass plant. The renewable sector. Secretary informed for 20 years) 2.50 2.37 Srinivas, Programme Officer, UNDP, announcing the one-time grant for government is also considering providing 100% stamp the participants that he was sure Shri VK Jain, Director & NPC, MNRE OREDA. duty exemption on acquiring private land for setting up Variable Charges that the Ministry would achieve the and PMC staffs among all others. biomass power plant. (Rs/kWh) 3.81 3.81 target of 175 GW by 2022. He Shri Sudarshan Das, delivered the Applicable Tariff Shri Venugopal in his welcome briefed upon the recent The biomass fuel is to be sourced from within a 25 km vote of thanks addressing the guests (Rs/kWh) 6.31 6.18 address highlighted the importance developments in the sector including range of the plant and new schemes are to be framed for and the participants. the same. of renewable energy in India’s the Priority Sector Lending (PSL) for Source: http://rerc.rajasthan.gov.in/TariffOrders/Order218.pdf , energy mix and emphasized the renewable energy projects up to Rs. http://rerc.rajasthan.gov.in/TariffOrders/Order224.pdf Plenary Sessions Source: http://upneda.org.in/policies importance of renewable energy 15 crores and soon-to-be issued tax The workshop had 5 plenary Disclaimer: The regulations presented here are summaries of the plants achieving grid parity. He free Green Bonds worth Rs. 5,000 sessions on a) Scope, approval & Rajasthan Electricity Regulatory original and should not be referenced for legal or commercial suggested that technology providers crores. Shri Tripathy also touched purposes. For the original regulations, refer to the websites of regulatory framework for biomass Commission (RERC) released Biomass, the issuing agency. and bankers should bring down the upon on other initiatives by the cost of production and cost of Ministry such as establishment of RE power plants in Odisha, b) Biomass capital to achieve this. Museum at NISE and setting up of resource assessment & fuel linkage, International Agency International c) Sharing of project experiences, d) Dr. S.N. Srinivas, briefed on the Agency for Solar Policy & Application Financing biomass power plants and uniqueness of the biomass energy (InSPA). He informed the gathering e) Experience sharing from pipeline amongst renewables and the that a meeting of Energy Ministers projects. achievements of the MNRE-

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30 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 31 mission activities

AROUND THE WORLD Mr. Sunil Choudhury from Star licenses and approvals before two power plants etc., are essential. Light Energy Pvt. Ltd, shared his tendering the same to developers. He informed that refinancing experience in a developing a 15 MW scheme would not help revive the Shri. Balaji, Director, Cummins project, the hurdles faced and projects in few states such as Cogeneration presented the reasons for dropping the project. He Karnataka, Gujarat, etc., without any experience in developing and opined that the capacity of the favourable tariff by respective SERCs. Latest News operating a 1 MW Gasification biomass power plants should be Power Plant at Sattur, Tamil Nadu. A presentation on Scope of smaller in order to manage the The overall plant has been built with Biomass power projects in Odisha biomass supply issue effectively. He a footprint of 1.2 acre including the and Proposal for Study on biomass expressed that similar to a coal fuel storage space at a cost of Rs. zoning in Odisha was delivered by power plant, biomass power plants 10.5 crore. He explained the Ms. Tanushree Bhowmik, NPM, should ensure proper backward technological innovations in the MNRE PMC on behalf of OREDA. Rajasthan. The transmission system power hasn’t seen any additions yet, integration of fuel supply chain. He Andaman to get biomass project, including usage of Cummins is estimated to cost 8,548.68 crore a total of 400 MW has been targeted suggested the establishment of A presentation on the 20 MW ₹ lean gas 500 kW gas engines. power plant biomass collection centres to ensure Shalivahana Green Energy Limited wherein the government will this year. Currently the plant is exporting successful operation of the plant was given by Shri Narayana Reddy. July 8, 2015: contribute ₹ 3419.47 crore from Source: http://mnre.gov.in/ power to a Taj Group hotel through with higher PLF. He briefed on the SGEL activities and National Clean Energy Fund while open access electricity sales, since INR 5 crore has been allotted for its foray in renewable energy. He German bank KfW will lend similar Mr. Komariah, MD, Shalivahana the grid electricity sale is not viable a 1 MW biomass power plant in IREDA's INR 2,000-Cr Tax- explained the history of the plant amount and the remaining Green Energy Limited shared his for the plant. He summarized the Andaman and Nicobar Islands by the Free Bonds gets 'AA+' operation from year 2011 and the contribution would be made by experience in developing and following as the major impediments Environment, Forests and Climate difficulties faced by the plant states. rating by India Ratings operating a 20 MW biomass plant at to the sector: a) ineffective REC b) Change Ministry. including fuel availability, cost of Dhenkanal District, Odisha. The plant cross subsidy charges for third party Under the envisaged project and Research fuel, vandalism faced near the plant, In an interaction with the media was commissioned in 2011 and ran sales c) lengthy approval process d) activities, 48 new grid sub-stations non-implementation of RPO & REC, following the 6th meeting of the Aug 6 2015: for almost a year until 2012. The lack of EPC players in gasification e) of different voltage levels with total timely release of payments from National CAMPA (Compensatory India Ratings and Research has plant was shut down for a period of availability of trained man power in transformation capacity around DISCOMS, etc. Afforestation Fund Management and assigned a 'IND AA+' rating with 3 years and restarted its operations gasification and f) cost of fuel. He 17100 MVA (Mega Volt Ampere) and Planning Authority) Advisory Council stable outlook to state-run Indian only in the month of June, 2015. He also explained that with REC, the Shri Md. Alam from AK Power over 7800 ckt-kms (Circuit (NCAC) Mr. Prakash Javadekar Renewable Energy Development explained that the restarting of the cross subsidy, wheeling and Solution shared his experience in Kilometers) of transmission lines are (Environment, Forests and Climate Agency's Rs 2,000-crore tax-free plant almost required the same set transmission charges for third party developing a 6 MW biomass power to be established. The project is Change Minister) said support will bonds. The fact that the government of procedures for starting a new sale are doubled which makes such plant. He suggested that the proposed to be completed within a be provided for the pilot project is providing guarantees for IREDA's plant, which further aggravated the sales pretty much unviable. biomass power plant developers period of three to five years. which will primarily use agricultural multilateral debt, which formed 57 problem. He suggested that tariff Answering a question, Mr. Balaji should have energy plantations to residue for power generation. The cost on creating intra-state per cent of its borrowings at FY15 revision by respective SERCs should explained that scheduling is not a ensure sustained plant operation. He According to the minister, the NCAC transmission system is proposed to be made annually in line with CERC problem for the plant but tariff is. also suggested that SNAs should reflects systemic importance that has INR 250 crore at its disposal and be met through KfW loan (40 recommendations. develop the required land, process IREDA holds, the agency said. IREDA percent of the total cost), NCEF Shri. Kiran from Thermax Ltd., and then hand over to the following the meeting, it has contributed 14.4% annually to grant (40 percent of the total cost) Dr. Rajan, IISc presented on the presented on the 1 MW Gasification developers for biomass plant decided to allot INR 162 crore for renewable energy capacity additions Biomass Atlas and its features. He Power Plant at Washim implementation. several environment projects and the remaining 20 percent as over the past 6 years. With India’s explained about the various inputs (Maharashtra) which is currently including the Andaman power plant. State contribution. increased renewable energy target The concluding session of the going into the Biomass Atlas and under commissioning. This plant is Source:http://pib.nic.in/newsite/PrintRelease.as Source: http://pib.nic.in/ 175 GW by 2022 IREDA’s quoted that the factual accuracy of based on indirect fluidized bed workshop was moderated by Shri VK px?relid=123079 significance will increase too. the Biomass Atlas would be in the gasification technology with Jain, Director & NPC, MNRE receiving India crosses 20% of its range of ±20% from the actual data. technologies from ECN and comments from the various Creation of intra state IREDA’s market share dipped He agreed that an indicative fuel price Dahlman, The Netherlands. The participants of the workshop. Some renewable energy target from FY2013, however India Ratings of the major recommendations transmission system in believes its role in meeting the structure can be included in the overall cost of the plant is Rs. 13.5 July 31, 2015: Biomass Atlas for more meaning crores. Mr. Kiran claimed that usage were: a) Annual electricity tariff the States of Andhra funding gap by way of innovative Latest figures published by the interpretation and decision making. of soya stalks and tar removal has revision by Odisha Electricity Pradesh, Gujarat, financing will strengthen in the near been the major problem faced Regulatory Commission in line with ministry of new and renewable future. Shri VK Jain, Director and NPC of during the commissioning. The plant CERC guidelines b) Exit policy from Himachal Pradesh, energy (MNRE), indicate that India the MNRE-UNDP/GEF Biomass Power IREDA was instituted by MNRE is expected to be commissioned in PPAs with DISCOMS allowing the has accomplished about 20% of its Project presented the achievements Karnataka, Madhya and is a government-owned public another 2 months. project developers to sell through 175-gigawatt renewable energy of the project so far. He expressed open access c) Simpler approval Pradesh, Maharashtra target for 2022 by the end of July, financial institution and has been that constructive action plan should Shri, SK Dey, AGM, IREDA gave a process d) Exemption from water and Rajasthan 2015. The figures show India registered with the Reserve Bank of be laid out to sustain the sector in presentation on the proposed IREDA development charges and VAT on currently has installed capacity of India since February, 1998. The main the long run. He mentioned that – NCEF refinancing scheme and biomass purchase e) Net metering of Jul 16, 2015: 36.6 GW of on-grid and 1.17 GW of objective of the entity was to under the project, Model Investment banker’s perspective on funding import & export electricity f)Biomass The Cabinet Committee on off-grid renewables. The country has provide financial assistance to Projects (MIPs) are being supported biomass projects. He suggested that zoning to ensure sustainable Economic Affairs approved the seen a capacity addition of 421.3 techno-commercially viable for establishing fuel linkage systems for successful operation of biomass operation of biomass power plants creation of an intra-State MW in wind energy, 357.7 MW in renewable energy projects and and implementing innovative power plants, two part tariff, g) Removal of cross subsidy charges transmission system in seven states solar energy, 75.2 MW in small energy efficiency projects. features in the technology. He biomass collection and storage, long for open access electricity sales and namely Andhra Pradesh, Gujarat, hydro power and 12 MW in waste to Source:http://profit.ndtv.com/news/corporates/ suggested that OREDA should term fuel purchase agreement, h) Policy for restricting inter-state Himachal Pradesh, Karnataka, energy systems in the grid- article-india-ratings-assigns-aa-to-iredas-rs-2- 000-cr-tax-free-bonds-1221025 develop project proposals with all minimum 50 km distance between biomass trade. Madhya Pradesh, Maharashtra and connected segment. While bio-

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loans at the rate of interest which is assets currently. The company had Total renewable energy installed sugar cane trash, coffee husk and India – Mongolia sign 0.75% less than the conventional also demerged their biomass Odisha to set up National capacity in the country is about 35 other agri residue that can be MoU to establish basis for energy generation projects. business on 13th June. Institute of New Energy GW, out of which Odisha's converted into energy. The scientists cooperative institutional Furthermore, no restrictions have “The investment will enable the September 8, 2015: contribution is meagre 116 MW (0.3 at IISc estimate India can generate been put on the loan amount for per cent), rued J B Mohapatra, joint 15,000 MW of electricity using agro company to augment its wind Odisha Government will soon sign relationship to encourage and all viable renewable energy secretary, MNRE. and crop waste of 120-140 million and promote technical energy capacity and to reduce its a memorandum of understanding projects will be eligible for funding. interest outgo and outstanding (MoU) with the Ministry of New and The Odisha government has set tonnes using a distributed model of bilateral cooperation on More over for rural electrification the debt. The improved cash flows Renewable Energy (MNRE) to set up a an ambitious target to add 3 GW having 1-6 Mw power plants across Government is providing a grant will strengthen the financial National Institute of New Energy in renewable energy capacity by 2022. the country. new and renewable through REC for Decentralized energy position thereby enabling OGPL to Bhubaneswar. The state government The target included 2.3 GW in the “There is little parity with Distributed Generation under better capture the significant would provide 15 acres of land and solar sector, 350 MW from wind biomass and solar and other Aug 12 2015: Deendayal Upadhyaya Gram Jyoti growth opportunities in the the project cost is pegged at Rs 250 sources, 150 MW from the small renewable energies. If it happens – Yojana (DDUGJY). The Union Cabinet chaired by the renewable energy space,” said S. crore. hydro-electricity projects, 180 MW this can provide grid quality 24/7 Source: http://pib.nic.in/ Prime Minister, Shri Narendra Modi Venkatachalam, managing director "The institute will carry out from biomass and 20 MW from power giving direct and indirect gave its ex-post-facto approval for OGPL. Immediate plans include municipal solid waste. employment,” said Dasappa. Orient Green Power Co. research and development of best the Memorandum of Understanding adding 57 MW of wind power possible technology for wind and Source:http://www.orienvis.nic.in/index1.aspx? Karnataka offers as much as INR 12 (MoU) between India and Mongolia Ltd (OGPL) raised INR 250 generation capacity in Andhra other renewable energy sources in lid=900&mid=4&langid=1&linkid=565 a unit of power generated by solar, for a duration of 5 years. The MoU crore via preferential Pradesh and Madhya Pradesh. These coastal states. Small pilot project but pays less to biomass-based was signed at Ulaanbaatar during will be in place by the middle of next GE takes IISc biomass gasifier projects. allotment demonstrations will also be done Prime Minister’s visit to Mongolia on year. This will add to its existing here. The site selection process is tech for power plants in Source: http://www.business-standard.com/ 17th May, 2015. Aug 19 2015: wind generation capacity of 435 underway near Indian Institute of article/companies/ge-takes-iisc-biomass-tech- MW across multiple locations. the US for-power-plants-in-the-us 115090800817 The MoU will aid in the Renewable energy developer Technology (IIT)-Bhubaneswar at _1.html Orient Green Power Co. Ltd (OGPL) Source: http://www.thehindubusinessline.com/ Arugul," Hemant Sharma, managing September 9, 2015: establishment of a cooperative companies/ogpl-to-raise-250-cr-to-expand- institutional relationship, will raised Rs.250 crore through retire-debt/article7558083.ece , director, Green Energy Development An indigenously developed NTPC pre-closes encourage and promote technical preferential allotment of shares to its www.livemint.com Corporation of Odisha limited biomass power generation oversubscribed Rs 700 bilateral cooperation on the new existing promoter Shriram Venture (GEDCOL) said on the sidelines of technology developed by Indian and renewable energy, on the basis Ltd (SVL) and its subsidiaries, and Memorandum of the second edition of Odisha Energy Institute of Science (IISc) is being crore tax-free bond issue of mutual benefit, equality and financial investors, including EW Understanding between Conclave - 2015 organised by Indian taken to the US by General Electric. September 24, 2015: Chamber of Commerce (ICC). reciprocity. Special Opportunities Fund II Pte. India and United States of The biomass gasifier technology State run NTPC has pre-closed its Ltd, Ecap Equities. that is fuelled with agro-waste and The MoU will also help in America on cooperation He also said “The Rs 250 crore Rs 700 crore public issue of tax free strengthening bilateral cooperation These funds were to be utilized project will come up on a 15 acre wood had been licensed by GE from bonds which was oversubscribed by between the two countries. to pay off existing debts and as to establish the Pace plot near Arugul and besides IIT IISc is to be used to power plants in 11.04 times of the base issue size of Source: http://pib.nic.in/ capital expenditure. As on 31 March, Setter Fund Bhubaneswar. While the union California which will be set up by Rs 400 crores and 6.31 times of the total consolidated debt of the government will fund the institute, Phoenix Energy. Dr.S.Dasappa from overall issue size of Rs 700 crores. Aug 21 2015: Low cost financing for company was at INR 1,923 crore. the state government will provide the Centre for Sustainable The retail portion was This transaction comes amidst the The Union cabinet gave approval the land and other facilities.” Technologies, IISc said, “Technology oversubscribed by 6.60 times (of the renewable energy for the Memorandum of Under- increased efforts of the government Currently India has three R&D transfers typically happen from the total issue size allocated to retail). projects in pushing the energy security standing (MoU) on cooperation to North to the South. In gasifier The issue has three tenures - 10 establish the Pace Setter Fund. The institutes in the country, namely Aug 13 2015: agenda. National Institute of Solar Energy, an technology, it flows from the South years, 15 years and 20 years with fund has been set up to support he coupon rate of 7.36%, 7.53% and The Government has taken some In the past five years the Shriram autonomous R&D institution in the to the North.” Promoting Energy Access through 7.62% respectively for retail major steps in mobilizing low cost Group has invested up to INR 550 field of solar energy in Haryana, Clean Energy track of the U.S. – India “GE officials had scouted across investors. financing for renewable energy crore (via open offers, preferential Partnership to Advance Clean Energy National Institute of Wind Energy the globe and found this platform – projects by coordinating with allotments and secondary purchases) (PACE) between India and United (NIWE) at Chennai and Sardar power generation from biomass at In July of this year, the different Ministries/Departments. including this transaction. States of America. Swaran Singh National Institute of IISc. The technology available with government had approved the plan This includes low cost borrowing Renewable Energy (SSS-NIRE) at to raise Rs 1000 crore through tax Merchant banker Equirus Capital This MoU was signed at New us is the best in the world.” While through multi-lateral and bi-lateral Kapurthala in Punjab. free bonds including Rs 700 crore acted as the adviser to OGPL and Delhi on 30th June, 2015. the indigenous gasifier technology is agencies i.e. World Bank, Asian Shriram Group for the fund raising. Earlier this year the Union getting attention in US, and has through public issue. NTPC was Development Bank, KfW Germany, Equirus Capital stated that a The PACESetter Fund, a joint government had set a target to installations in countries such as amongst the seven state run entities etc. Renewable energy projects have preferential allotment was made at a INR 500 million ($8 million U.S. increase renewable energy capacity Zambia, the uptake in India is still including NHAI and IRFC which were also been included in the Priority price of INR 14.56 per share, which Dollars) has been drawn on a 50:50 to 175 GW by 2022. very slow. given permission to raise Rs 40,000 Sector Lending Norms of has been determined as per capital sharing basis. The fund was crore in the current fiscal through Commercial Banks. Additionally the established in June by the govern- At present the non-conventional India has a vast amount of tax free bonds. market regulations. The investment sources of energy accounts for 14 biomass waste such as rice husk, government has also given approval is a strong vote of confidence by the ments of India and the United States Source: http://www.business-standard.com/ for issuance of tax free infrastructure to push the pedal on commer- per cent of the total energy mix in wood chips from trees such as promoters and investors in the country. eucalyptus, coconut shell, sawdust, bonds for funding renewable energy business and management of OGPL cialising innovative off-grid clean projects during the FY 2015-16. said Mr.Ajay Garg, managing energy solutions by providing early- stage grant funding, which would Sh. Piyush Goyal, Minister of director of Equirus Capital. OGPL is allow businesses to develop and test State (IC) for Power, Coal & New and one of the leading players in wind innovative products, systems and Renewable Energy also stated that and biomass energy. They have 428 business models. the Rural Electrification Corporation MW of operational wind assets and (REC) is providing Renewable Energy 106 MW of operational biomass Source: http://pib.nic.in/

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34 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 35 AROUND THE WORLD Scheme to Support Promotion of Grid Interactive Biomass Power and Bagasse DATEBOOK Cogeneration in Sugar Mills in the Country during the 12th Plan Period

Bioenergy Australia Conference 2015 Date : 30 November - 2 December 2015 The Ministry of New and Renewable Energy announced the extension of Central Financial Assistance (CFA) for “Promotion of Grid Interactive Biomass Power and Bagasse Cogeneration in Sugar Mills” during the 12th Plan period Location : Launceston, Tasmania at a total cost of INR 310 Crores only. Type of event : Conference Under this scheme, the capital subsidy is provided for setting up of biomass combustion based power plants and Organizer : Bioenergy Australia bagasse cogeneration projects in private/cooperative/public sector sugar mills:

Key themes : The conference will consider the many facets of bioenergy including: biomass resources 1. To promote setting up of biomass power projects with minimum steam pressure configuration of 60 bar and and supply chain aspects, conventional and advanced liquid biofuels, algae and other above for power generation (grid interfaced on commercial basis). future feedstocks, pyrolysis, hydrothermal processing and bio-char, gasification, Biogas production and utilization, energy-from-waste heat and power, biorefining and 2. To promote cogeneration projects for surplus power generation from bagasse in private/cooperative/public biochemicals etc sector sugar mills with minimum steam pressure configuration of 40 bar and above (Grid interfaced on Link : http://www.bioenergyaustralia.org/pages/bioenergy-australia-conference-2015.html commercial basis). 3. To promote bagasse cogeneration projects for surplus power generation 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. World Bio Markets Brasil 2015 Undertakings or State Government Joint Venture Company (Grid interfaced on commercial basis). Date : 30 November - 1 December 2015 The amount of CFA for biomass combustion power projects would be calculated based on installed capacity and for Location : Sao Paulo, Brazil bagasse cogeneration project in sugar mills on surplus power exported to grid. Type of event : Conference Organizer : Green Power Conferences CFA for Biomass Power Project and Bagasse Cogeneration Projects by Private/ Joint/Coop./ Key themes : The conference will cover roundtable/panel discussions on securing Feedstock, new markets, Public Sector Sugar Mills biopower updates and future opportunities, market updates, cogeneration, assessing new technology innovation that will support and help drive business growth, investment panel Types of Project Capital Subsidy for Special Category States Capital Subsidy Link : http://www.worldbiomarketsbrasil.com/ (NE Region, Sikkim, J&K, HP & Uttarakhand) (Other states) Biomass Power projects INR 25 lakh X © MW) INR 20 lakh X (C MW) (Max. support of INR 1.5 Cr per project.) (Max. support of INR 1.5 Cr per roject.) tcbiomass 2015: The International Conference on Thermochemical Biomass Conversion Science Bagasse Cogeneration INR 18 lakh X (C MW) (Max. support of INR 15 lakh X (C MW) (Max. support of Date : 2-5 November , 2015 by Private sugar mills* INR 1.5 Cr per project.) INR 1.5 Cr per project.) Location : Chicago, Illinois, United States Bagasse Co-generation Rs.40 lakh (40 bar & above) Rs.40 lakh (40 bar & above) Type of event : Conference projects by cooperative/ Rs.50 lakh (60 bar & above) Rs.50 lakh (60 bar & above) Organizer : Gas Technology Institute (GTI) public sector sugar Rs.60 lakh (80 bar & above) Rs.60 lakh (80 bar & above) mills* per MW of surplus power@ per MW of surplus power@ Key themes : The conference will bring together experts in biomass gasification, pretreatment, pyrolysis, (max. support INR 6.0 crore per project) (max. support INR 6.0 crore per project) and upgrading to explore progress in the bioeconomy and will focus on developments in the conversion of renewable resources into a variety of fuels, chemicals and energy products Link : http://www.gastechnology.org/tcbiomass/Pages/default.aspx *For new sugar mills, which are yet to start production and existing Pvt. & Co-op. sugar mills employing backpressure route/seasonal/ incidental cogeneration, which exports surplus power to the grid, subsidies shall be one-half of the level mentioned above.

@Power generated in a sugar mill (-) power used for captive purpose i.e. net power fed to the grid during season by a sugar mill. Here C is the capacity in MW.

For further details please refer http://mnre.gov.in/file-manager/grid-biomass/scheme-Biomass.pdf

36 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 AROUND THE WORLD Scheme to Support Promotion of Grid Interactive Biomass Power and Bagasse DATEBOOK Cogeneration in Sugar Mills in the Country during the 12th Plan Period

@Power generated in a sugar mill (-) power used for captive purpose i.e. net power fed to the grid during season by a sugar mill. Here C is the capacity in MW.

For further details please refer http://mnre.gov.in/file-manager/grid-biomass/scheme-Biomass.pdf

36 JULY-SEPTEMBER 2015 / VOLUME 1 / ISSUE 5 IREDA IS/ISO 9001: 2008 Certified JULY-SEPTEMBER 2015 VOLUME 1 ISSUE 5 (A Mini Ratna Category-I, PSU) INDIAN RENEWABLE ENERGY DEVELOPMENT AGENCY LIMITED FINANCING AND PROMOTING SELF-SUSTAINING INVESTMENT IN ENERGY GENERATION FROM RENEWABLE SOURCES, ENERGY EFFICIENCY AND ENVIRONMENTAL

2006-7 2007-8 2008-9 2009-10 2010-11 2011-12 2012-13 2013-14 2013-14 the 2022 RE target • Bridge Loan against SDF Advisory Services 0

Role of IREDA