Untapped Potential

Emerging avenues for bioenergy use

Bioenergy provides a clean alternative to meet the energy needs by using naturally sourced green feedstock. Although the country’s bioenergy target for 2022 has been met, there is still a large un­tapped potential present. There has been steady growth in biomass-based po­wer even though it has been largely overshadowed by the more dynamic solar and wind segments. There are a number of challen­ges facing the bioenergy segment. But there are also emerging avenues for use, in­cluding overarching fuel use for tra­ns­portation and co-firing in coal power plan­ts, making them relatively cleaner.

Renewable Watch takes a look at the current scenario, key developments over the past year and the future outlook for the bio­energy segment…

Current scenario

The total installed biopower capacity in India stood at 10,577.45 MW as of October 2021, up by over 200 MW in November 2020 and beyond the MNRE target of 10,000 MW. This comprises 9,403.56 MW of biomass bagasse cogeneration, 772.05 MW of non-bagasse biomass and 401.84 MW of waste-to-energy (WtE). Overall, bio­energy makes up about 10.26 per cent of the total re­newable energy capacity in Ind­ia, excluding large hydropower.

Maharashtra, Uttar Pradesh, Karnataka and Tamil Nadu have the highest capacities of biopower and together make up al­-most 75 per cent of the total biopower in the country. Most of this capa­city consists of projects based on bagasse cogeneration. Further, of the agriculture-heavy sta­tes, only Uttar Pradesh features among­st the top five. Thus, there is a lot of untapp­ed biomass potential in states such as Punjab and Haryana. Many farmers in the nor­thern states of Haryana, Punjab and parts of Uttar Pradesh resort to stubble bu­rning. However, there is another, more en­­vironmentally friendly way to dispose of this crop residue, that is, to use it as biomass fuel in power production. Punjab and Haryana are working to adopt strategies to avoid stubble burning. These stra­tegies include presenting paddy straw as a resource, which can create value for the industry and the farming community. The­re have been efforts to make biopower ta­riffs more viable in these states.

Programmes to support bio-based power

Various programmes have been introdu­ced to provide frameworks for setting up bioenergy projects. Central financial assi­s­tance (CFA) is offered for supporting pro­g­ramme implementation, information disse­mi­nation and training. The two main sche­mes introduced for promoting the installation of off-grid and decentralised biogas pl­ants are the New National Bio­gas and Or­ganic Manure Programme and the Biogas-based Power Generation (Off-grid) and Th­er­mal Energy Applications Programme.

The government has also been implementing a scheme to support the promoti­on of biomass-based cogeneration in su­gar mills and other industries. The sc­he­me was applicable for projects set up ac­ro­ss India. The scheme was notified in May 2018 and was valid till March 2021, with consideration for extension. Under the scheme, CFA of Rs 2.5 million per MW of surplus exportable capacity for bagas­se cogeneration projects and Rs 5 million per MW of installed capacity for non-ba­ga­sse cogeneration projects was provided to plants utilising biomass like baga­s­se, agro-based industrial residue, crop re­si­due, wood produced through energy pl­an­tations, weeds, and wood waste produ­ced in industrial operations.

The United Nations Industrial Develop­me­nt Organization (UNIDO) and the MNRE have collaborated for the UNIDO-MNRE project, “Organic Waste Streams for In­dus­trial Renewable Energy Applica­tions in India”. The project aims to scale up innovative in­dus­trial organic WtE biomethanation technologies and business models. In February 2021, UNIDO invited bids fr­om companies or consortiums of compa­ni­es to set up biomethanation projects showcasing specific developments in one or more areas of innovation.

Co-firing of biomass with coal

In addition to purely biomass-based po­w­er plants, biomass pellets and brique­ttes can be used in co-firing of coal plan­ts. Some share of biomass-based fuel can be accommodated in coal plants wi­th­out much modification to the technology. Co-firing of biomass with coal has pro­ven su­cc­essful. In line with this, the gre­a­ter up­take of briquettes and pellets can help re­duce the reliance on coal.

Earlier, in 2017, the Ministry of Power had issued a policy on biomass utilisation for power generation through co-firing in coal-based power plants. The policy was modified and issued on October 8, 2021 as the “Revised Policy for Biomass Utiliz­ation for Power Generation through Co-firing in Coal-based Power Plants”. As per the revised policy, it has been mandated that all thermal power plants will use a 5 per cent blend of biomass pellets along with coal with effect from one year of the date of issue of this guideline. The obligation will increase to 7 per cent two years after the date of issue of this order and thereafter. For plants that have a ball and tube mill, the use of biomass will remain 5 per cent. Under the policy, it is advised that the minimum contract period for the procurement of biomass pellets by generating utilities should be seven years to avoid delays in the award of contracts and to build a long-term supply chain.

At the state level, Haryana, Punjab and Uttar Pradesh plan to procure a total of about 1,301,000 tonnes of biomass pellets for co-firing in their power plants. In September 2021, the Punjab State Elec­tri­city Regulatory Commission ruled that po­wer generated from co-firing of biomass will be considered as renewable en­ergy and eligible for meeting the non-solar re­ne­wable purchase obligation of the obligated entities. In the same month, the Odi­sha Electricity Regulatory Commission ruled that the guidelines prescribed by the Central Electricity Regulatory Commission must be followed to estimate the electricity generated from biomass in coal-based thermal plants, including captive and cogeneration projects.

NTPC has also taken the initiative to procure and use biomass-based fuel in its power plants across various states. NTPC placed an order for 865,000 tonnes earlier in the year. It placed an additional order of 65,000 tonnes in October 2021. Another tranche for the procurement of 2,500,000 tonnes is in progress, for which the vendors were invited to submit an offer by November 1, 2021.

The Ministry of Power has set up the Na­tional Mission on the Use of Biomass in Coal-based Thermal Power Plants, to ad­d­ress the issue of air pollution due to fa­rm stubble burning and to reduce the carbon footprint of thermal power generation. As a result of the efforts, around 1,400 tonnes of biomass was fired in Oc­tober 2021 and a total 53,000 tonnes of biomass has been utilised as green fuel in power plants so far.

Liquid biofuels

The government has taken various steps towards achieving 20 per cent blending of ethanol in petrol, which includes allowing the use of sugarcane and foodgrains for conversion to ethanol. These initiatives include an administered price mechanism for the procurement of ethanol under the Ethanol Blending Programme (EBP) with an enhanced ex-mill price of ethanol year on year, starting from ethanol supply year 2017; reduction in the GST rate to 5 per cent on ethanol under EBP; amendment in the Industries (Development & Regula­tion) Act for free movement of ethanol; as well as the introduction of the interest subvention scheme for enhancement and augmentation of the ethanol production capacity in the country. The average etha­nol blending per­centage in petrol for the ongoing Etha­nol Supply Year 2020-21 is 8.04 per cent as of August 2021. Mean­while, the percentage of blending of bio­diesel in die­sel is less than 0.1 per cent. The Na­tional Policy on Biofuels prescribes a target of 5 per cent blending of biodiesel in diesel by 2030.

Over the past few years, the availability of biodiesel has been low due to the increa­se in price and non-availability of feedstock for biodiesel. Some biodiesel is also being marketed by agencies other than oil marketing companies (OMCs). Further, to inc­rease the supply of biodiesel in the country, OMCs are regularly inviting expre­ss­ions of interest to encourage the production of bio­diesel from used cooking oil.


In August 2018, the ministry approved the Programme on Energy from Urban, Indus­trial and Agricultural Wastes/Residues for the period 2017-18 to 2019-20. The programme aims to promote the development of projects for the generation of biogas, bio-CNG and power from urban, industrial and agricultural waste. In March 2020, the MNRE issued revised guidelines for the programme. The revised guidelines seek to promote biomass gasifiers for either fee­ding electricity into the grid or meeting the captive and thermal needs of villages and industries such as rice mills. Biometha­na­tion projects based on any kind of biode­gradable waste are now eligible for CFA. However, such projects can use only segregated or uniform biodegradable waste. The MNRE is promoting various technologies for setting up WtE projects. These te­ch­nology options are for the recovery of energy in the form of biogas and bio-CNG, and electricity from agricultural, industrial and urban waste.


As per the MNRE, India has the potential to generate around 18,000 MW of renewable energy using biomass and an additional 7,000-8,000 MW from bagasse cogeneration. The segment offers a huge opportunity for agricultural waste management, curtailment of air pollution, preventing loss of fertility of agricultural land and providing a sustainable income source for farmers, suppliers and biomass fuel manufacturers resulting in overall development.

However, owing to inefficient manageme­nt of biomass, high capital requirement for biomass projects and technological barriers in terms of energy conversion, the bio­energy segment remains far from reaching its potential.


By Meghaa Gangahar


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