Introduction

Access to energy is the cornerstone for development and essential for better quality of life. India is still severely affected by energy crisis owing to ever rising power demands and supply gaps. Approximately 350 million people living in remote locations and small areas in the country are still grappling with unmet demand or insufficient/unreliable power supplies. They spend a major portion of their income and rely on expensive, environmentally and health damaging charcoal, wood, and kerosene to meet their energy needs. There is however a growing realization that decentralized distributed generation (DDG) is the key to meet energy needs of rural households, especially for those at the tail-end of the grid.

Despite high potential, biomass based power generation systems potential remains to be fully realized. As per the estimates of Ministry of Non Renewable Energy (MNRE), Government of India, only 15% of biomass based power generation systems total potential has been exploited so far as against 38% of wind and 24% of small hydro power. Moreover, policy orientation for DDG implementation in India is either technology neutral or heavy on solar. Village Energy Security Programme (VESP) is the only one which has biomass based DDG as a dominant option for village electrification. Rajiv Gandhi Gramin Vidyutikaran Yojana’s (RGGVY) DDG is technology neutral while Jawaharlal Nehru National Solar Mission (JNNSM) and Remote Village Electrification focus on Solar Photovoltaic (SPV).

In addition to restrictions within policy framework in promoting biomass based DDG, issues related to availability and sustainability of biomass supply add to the woe. Disrupted biomass supply can cause plants to shut down. Although biomass based DDG system has turned the corner in terms of local operator running these plants, the loads associated with such projects remain unchanged with not much commercial loads. There is no appreciable increase in capacity utilization factor of the plant, making it financially unattractive and unfeasible for commercial entities. Local entrepreneurs may also not be interested given the limited earning currently and poor scope for enhancing it in short to medium term. Further, given higher complexity of tasks in managing a biomass based DDG as compared to other renewable energy technologies, entrepreneurs would perceive a higher degree of effort and risk and therefore would expect higher degree of returns. Finally, the risk of grid coming in and rendering the investments infructuous is real and a big deterrent for potential investors.

To address and overcome these barriers, key players from the sector have been working to make Biomass based DDG systems attractive and financially viable for investors. One way is to extend the grid by incurring a one-time capital cost and set up DDG at scale and location where it is able to cater to the existing load of un-electrified villages. Grid will provide large loads whereas DDG plants can operate at higher Capacity Utilisation Factors (CUFs). Pumping power at the tail-end of the distribution network improves quality of power delivered to consumers and now as more power is available, the grid can be extended to cover more areas.

Users in remote areas can also be brought under grid tariffs and on par with existing rural grid customers, thus addressing issues of equity. However, tariff for DDG generation would have to be determined separately from existing basis for biomass power projects since the operating conditions (especially plant load factor) would be vastly different and the scale of operations would also be very different.

Commercial entities would be attracted especially as grid extension is part of the solution and not the problem. Finally, unlike existing DDG projects, generation and distribution need not be vested with the DDG plant operator alone. However, if both operations are combined the operator gets an incentive to minimize distribution losses and increase profits

To ensure sustainable supply of Biomass, it is recommended to have Public-Private-Panchyat (P3) collaboration biomass can be grown on public and private lands with funding support from Panchayat for these plantations. Gram Panchayat has funds for growing plantations under various schemes and also has funds for providing wage employment to rural communities under Mahatma Gandhi National Rural Employment Guarantee Scheme - MGNREGA. Power plants can offer a buy-back guarantee as paper, which would not only ensure a sustainable source of biomass to the power plant but also ensure better quality power to the villages since the power plant is a DDG connected to the distribution line.

In addition, to ensure biomass supply for operating large capacity plants, biomass technologies especially biomass combustion becomes feasible at larger scales (especially 1-3MW). Further, these technologies can use a variety of biomass fuel unlike current models of gasifiers which need only woody fuel or biomass briquettes. Thus increasing the number of biomass sources which could be used for operation of these plants. q