Power Purchase

Introduction

The Ministry of Power, through its official notification, has revised the price benchmarks for the biomass pellets in the northern and western regions that are used in the thermal power plants. Through the launch of this initiative, the Ministry has aimed to integrate a cleaner, greener and increasingly eco–friendly energy source for empowering India’s power generation landscape. The Ministry has also identified a total of twenty abandoned mines for the potential pump storage facilities.

According to the revised scheme, the benchmark prices for the non–torrefied biomass pellets have been set at the rate of Rs. 2.27/- per 7,000 Kcal excluding the tax/GST amount and transportation costs in the pellet manufacturing site in the Northern Region of India excluding the National Capital Region. Moreover, it has also been specified that the pellets are required to maintain a stipulated moisture content below 14% and a Gross Calorific Value (GCV) between a range of 2,800 to 4,000 Kcal per kilogram. The benchmark prices for the same have also been updated and set for Rs. 2.24/- per 7.000 Kcal.

While recognizing the vital role and importance of stabilization of the prices for biomass pellets, the government had also set up a committee for the price benchmarking for the pellets and assigned it the responsibility of conducting a region–wise research for stabilization of biomass pellets along with expediting the process for manufacturing and stabilizing the prices for the same.

The main objective behind this scheme was to provide encouragement and develop the sustainable production of the supply chain for biomass pellets. Moreover, the power utilities for the same were also required to stick to the stipulated rates for the biomass pellets for the process of implementing effectively the set benchmark prices. While keeping in mind the same objectives, the ministry had also observed that the biomass co–firing in the total 35 thermal power plants across the country had seen a significant reduction in Carbon Dioxide by a total of 10,000 tonnes out of which about 80,525 tonnes were the share from the power plants.

Conclusion

The policies and schemes of the Government of India and especially the Ministry of Power have been increasingly focused on the promotion of cleaner and greener sources of energy which produce less pollution and contribute towards lowering the country’s carbon footprint. The stabilization of benchmark prices for biomass pellets and notification for power purchase agreements by the government is one of the positive steps for the regulation of the power industry in the country.

This move by the government is not only expected to stabilise the prices for biomass pellets but would also act towards adoption of biomass co–firing schemes and practices which would further assist in promotion of green energy practices across the country.