Biomass plants: Low tariff,no permission to sell power to other states worry entrepreneurs

Sources in the Punjab Energy Development Agency (PEDA) said sanctions to three plants have been cancelled,and 22 — which were lagging behind — have been served notices to complete work.

Entrepreneurs are livid. “It is hard to survive in this business as the tariff is low and we do not have permission or open access to sell power to others states. Besides,the input costs have increased manifold,” one of them said.

Biomass plant owners have filed petitions with the Punjab State Regulatory Commission (PSERC) for tariff revision and permission for ‘open access’.

They have been since long demanding a reasonable playing field,as the government has allowed open access to co-generation plants and new biomass plants that will seek sanctions in future.

Pawanpreet Singh of Universal Biomass Energy Private Limited,Muktsar,said,“How can the government have different policies for different people? There should be one standard policy. Green power is expensive to generate. If the government gives no incentive and our petitions with the regulatory body also do not get desired results,we will have to shut down the plant.”

Viswajeet Khanna,Secretary,Science,Technology and Environment,said the government could not do much as the unit owners have signed a contract and had agreed to the conditions.

Senior Manager of Dee Development Energy Private Limited B S Jangra said they have filed a petition for ‘open access’ for their 8-MW unit in Abohar that was commissioned in February last year.

Pawanpreet,who has filed a plea for tariff revision and ‘open access’,said the tariff fixed for biomass is Rs 4.03 per unit,but after paying 8 per cent revenue to the government,they end up getting only Rs 3.70 per unit.

A senior official in the PSERC said they had received the petitions,and a decision would be taken in a couple of months. Relief provided to one petitioner would apply to all. About the yearly hike in renewable power tariff,he said there has been an increase of 5 per cent each for solar and biomass,and 3 per cent for hydropower.

Jangra said if ‘open access’ is allowed,they can work overtime and do brisk business from April to September,when power demand is high in north India,and make up for the losses suffered in winter.

PEDA chief T P S Sidhu said relief could be provided only by the power regulator. On the incomplete ventures,he said they have increased the performance security of biomass plants from Rs 25,000 to Rs 2.5 lakh per mega watt so that entrepreneurs do not sit over projects.

Tussle for raw material
Besides the cogeneration plants,brick kilns have emerged as major competitors to biomass units. Jangra said biomass is cheaper than coal,and kilns owners are ready to give higher rates. A booming real estate market has increased the price of bricks two-fold in the past few years,giving kilns good business. “They (kilns owners) can afford to buy biomass at higher rates,” he said. Pawanpreet Singh said fuel constitutes 60 per cent of the operation cost,and with brick kilns also taking a shine to biomass,they have to struggle for raw material.