The skepticism is based on the consideration that barely 300 mw to 400 mw of power is being currently produced. Achieving such a huge figure will require more than just mere interest, experts point out.

"All that is needed is management knowhow for such projects," said Mitcon vice-president (energy and projects group) SC Natu. He estimated the total potential for bio-mass based power generation at 25,000 mw, of which the captive bio-mass (industrial by products) potential is pegged at about 8,000 mw and distributed bio-mass (cane, trash etc) at about 17,000 mw.

But analysts said that there are several hurdles in realising the stated potential. The main stumbling block in bio-mass based co-generation is the high initial investment. Convincing small or medium-sized industries to invest in co-generation might be a difficult task, considering that these form a major chunk of Mitco's target market, said an analyst.

One also needs to take into account the cost per unit which is estimated at around Rs 2.6 per mw as against roughly Rs 1.3 to Rs 1.6 per mw for conventional power plants which, by virtue of age, enjoy the benefits of depreciation. Also the power grids may not be too keen on buying the exportable surplus from such small fragmented players.

Mitcon is a joint venture between leading financial institutions like ICICI, IDBI, IFCI, and SICOM, MIDC, MSSIDC and other banks. According to Mr Natu: "There are currently 45 projects under implementation and several more in the pipeline. These projects are estimated to generate around 1,000 mw of power." Mitcon has conducted over 250 energy efficiency audits in sectors like textile, pharma, steel and service industries.