Factors Influencing Grid Interactive Biomass Power Industry

Presently, in India only 13% of the total installed generating capacity of electricity is from renewable energy sources while 70 % of electrical power is generated using fossil fuels. Contribution of biomass to the total installed generating capacity of the electricity is mere 2%. As on today, only 23% of the total biomass power potential in India is utilized for power generation. The scope for the biomass power industry enhances with the recent ambitious target of biomass power of 10000 MW by 2022. The present research work aims at identifying the factors and to analyze its influence on biomass power entrepreneurship in India. The factors are identified based on the interviews with the biomass power experts and industry representatives. Presently in India, the primary drivers for installing biomass power are returns to the investments, to provide clean and reliable power to the industries and to save on the electricity bill due to high power tariff for industries. The major barriers influencing biomass power industry is the supply and frequent price fluctuations of the fuel stock (biomass input) which leads to reduced gap between the tariff and the cost of fuel over the period of time. A macro level analysis based on the secondary data collated for 28 states in India reveals that the installed capacities of biomass power presently responds strongly to the level of industrialization and power tariff for industries rather than the state level feed in tariff identified for biomass power. Even the states with high biomass potential and high feed in tariff are not able to utilize the existing biomass potential. Region wise installed generating capacity of electricity (utilities) also has strong influence on promotion of grid interactive biomass power. The paper suggests that such states should encourage biomass power entrepreneurship to supply power to the existing industries in addition to the high feed in tariff rates for the biomass power. Frequent revisions in tariff are recommended for sustenance of biomass power plants along with attempts to develop plan for organized supply of biomass fuel stock for power generation at state level.