MoP revises biomass co-firing policy, enables purchase of biomass pellets at benchmark price

The Ministry of Power (MoP) announced that it has decided to benchmark the prices of biomass pellets used for co-firing in thermal power plants (TPPs). The decision comes in view of evolving market conditions for biomass pellets and requests received from stakeholders including thermal power plants, pellet manufacturers, farmers, bankers amongst many others.

The benchmarked price shall take into account the business viability, impact on electricity tariff and efficient and faster pellet procurement by power utilities. Price benchmarking of pellets will enable the TPPs as well as pellet vendors to establish a sustainable supply mechanism for co-firing of pellets. The benchmarked price as finalised by the committee under CEA, will be effective from January 1, 2024.

Till the time the recommendations of the committee are implemented, the power utilities shall go for short term tenders for meeting the immediate requirement of biomass pellets for their TPPs.

Mr R.K. Singh, Union Power Minister said that “co-firing biomass in coal based power plants is a key policy of the Government towards energy security, reduced use of fossil fuels and at the same time to increase income of farmers. Revised policy shall help in achieving these goals faster.”

Explaining the decision, Shri Alok Kumar, Secretary, Power said that “the decision would encourage farmers, entrepreneurs as well as thermal power utilities to strive to establish a sustainable biomass ecosystem, achieve the targets for co-firing, reduce stubble burning and help to ensure a cleaner and greener future for the citizens of India.”

In another modification of the policy, it has been directed that since availability of torrefied biomass pellets is presently limited in the country, the torrefied pellets shall only be procured by utilities for which it is technically unavoidable and utilities which can use non-torrefied pellets should utilise the same only.