Biomass Price Benchmarking to Boost Sustainable Energy

The Ministry of Power (MoP) has modified the policy for biomass utilization in power generation. The modification dated June 16, 2023, focuses on co-firing biomass in coal-based power plants. The MoP has issued the present notice on biomass price benchmarking for the northern and western regions. These notices were issued on 8th November, 2023.

It may be recalled that Ministry had established a Price Benchmarking Committee on June 22, 2023. The committee sought to help power utilities to expedite the procurement of biomass pellets and address the challenges related to the volatility of raw biomass prices. The committee’s mandate was to conduct region-wise price benchmarking of biomass pellets, fostering the growth of pellet manufacturing capacity.

Northern Region Benchmarking Results:

The Price Benchmarking Committee recently concluded its study for the Northern Region (excluding NCR) and submitted its recommendations. According to the committee’s report, the benchmark price for non-torrefied biomass pellets in the Northern Region (excluding NCR) is set at Rs 2.27 per 1000 kcal. This price, effective from November 8, 2023, is exclusive of GST and transportation costs at the pellet manufacturing plant site. The specified pellets must have a moisture content below 14% and a Gross Calorific Value (GCV) between 2800-4000 kcal/kg.

Western Region Benchmarking Results:

Simultaneously, the committee conducted a study for the Western Region and proposed benchmark prices. The biomass fuel price for the Western Region, applicable for one year starting from November 8, 2023, has been set at Rs 2.24 per 1000 kcal. As with the Northern Region, this price excludes GST and transportation costs at the pellet manufacturing plant site. The specified pellets for the Western Region must meet the same criteria: moisture content below 14% and GCV between 2800-4000 kcal/kg.

Thermal Power Plants (TPPs) operating in the respective regions are strongly advised to adhere to the benchmark prices for biomass pellets. The Ministry of Power emphasizes the importance of compliance to accelerate capacity addition in pellet manufacturing and ensure a stable and sustainable biomass supply chain.