For the layman, biomass is just a heap of trash. But for the discerning entrepreneur, it holds the key to solving the twin problems of power shortage and unemployment, especially in rural areas.
Biomass is the name given to any recent organic matter that has been derived from plants as a result of the photosynthetic conversion process. Biomass energy is derived from plant and animal material such as wood from forests, residues from agricultural and forestry processes, and industrial, human or animal wastes. Biomass is not fossilised material (like oil, coal) but fresh material that can grow again after having been harvested.
The Tamil Nadu Biomass Power Producers Association estimates that a 10 mw biomass power plant can ensure livelihood of over 2,000 marginalised families. They can be employed in collection, transportation, cutting, chipping of biomass and cultivation of wasteland with energy plants like juliflora.
But this potential is largely unrealised in the state. Says N Srinivasan, founder and CEO of Auro Mira Energy Company, ?The accent on large power projects, nuclear reactors etc seems to have sidelined the potential of biomass in providing energy security and rural employment round the year all over the country.? He has commissioned two biomass power plants and has another two plants in the pipeline.
He adds, ?Though the union ministry of new & renewable energy (MNRE) has set ambitious targets of creating energy and employment from biomass, the experience of entrepreneurs in Tamil Nadu and other states shows that the biomass programme is only on paper,?? he adds.
According to the biomass power producers association, the situation in Tamil Nadu is paradoxical. The state is facing acute power shortage and industries are subjected to power cuts. The Tamil Nadu Electricity Board (TNEB) is buying power from all sources, paying up to Rs 10/unit. Industries run their captive gensets and produce power costing over Rs 12/unit. At the same time the 10 biomass power plants with an installed capacity of 120 mw, with over 80% plant load factor, have been closed down owing to unviable tariff rates.
Even the recent permission for Intra-State Open Access to the industry, paving the way for third party sale for IPPs, has brought only partial relief as TNEB has allowed the biomass power producers only 65% open access, and that too for six months. The balance 35% has to be sold to TNEB at Rs 3.15/unit at 80% PLF of installed capacity, says Srinivasan.
The biomass power producers association has told the government that they are under severe strain to operate power plants at the present tariff because the fuel price has gone up to Rs 2,400 a tonne from Rs 1,000 in 2006. Besides, there has been substantial increase in the cost of finance and also in wages.
According to the biomass power producers association, the viable rate for them to run the plants is a minimum of Rs 6.87/unit. The association has approached the Tamil Nadu Electricity Regulatory Commission (TNERC) with this request.
The regulator is not mediating at the present because the biomass power producers have signed power purchase agreements with TNEB for Rs 3.15/unit. This rate was fixed by TNERC in 2006. TNERC wants them to cancel the PPA with TNEB for it to take up their case. The future prospects also appear to be bleak as TNEB is not willing to consider a tariff of more than Rs 4.34 a unit.
Srinivasan says the unviable tariff has not only stopped the existing projects, but has also put in jeop-ardy over 170 mw projects that are in pipeline. Srinivasan says this would put in reverse gear the planned biomass-led rural revolution.