Biomass Sector in India – Problems and Challenges

Biomass power plants in India are based mostly on agricultural wastes. Gasifier-based power plants are providing a great solution for off-grid decentralized power and are lighting homes in several Indian states. While for providing grid-based power 8-15 MW thermal biomass power plants are suitable for Indian conditions, they stand nowhere when compared to power plants being set up in Europe which are at least 20 times larger.

Energy from biomass is reliable as it is free of fluctuation unlike wind power and does not need storage to be used in times of non-availability as is the case with solar. Still it is not the preferred renewable energy source till now, the primary reason that may be cited is the biomass supply chain. Biomass availability is not certain for whole year. Biomass from agriculture is available only after harvesting period which can stretch only for 2-3 months in a year. So there is a need to procure and then store required quantity of biomass within this stipulated time.

Some of the Indian states leading the pack in establishing biomass-based power supply are Karnataka, Andhra Pradesh, and Maharashtra. Ironically, states having agricultural-based economy have not properly been able to utilize the opportunity and figure low on biomass energy utilization. Only Uttar Pradesh has utilized large part of the biomass potential in north Indian States and that is mainly due to the sugarcane industry and the co-generation power plants. Interestingly Punjab and Haryana don’t have much installed capacity in comparison to potential even though tariff rates are more than Rs. 5 per unit, which are better than most of the states. This can be attributed to the fact that these tariffs were implemented very recently and it will take time to reflect the capacity utilization.

Table: Biomass Potential and Installed Capacity in Key Indian States


Power Potential (MWe) Installed Capacity (by 2011)


Punjab 2413.2 74.5

@ Rs 5.25 per unit, (2010-11)

Uttar Pradesh 1594.3 592.5 @ Rs 4.70
Haryana 1120.8 35.8 @Rs 5.24 per unit
Rajasthan 1093.5 73.3

@ Rs 4.72/unit water cooled (2010-11)

Maharashtra 1014.2 403 @ Rs 4.98 (2010-11)
Madhya Pradesh 841.7 1.0

@ Rs 3.33 to 5.14/unit paise for 20 years with escalation of 3-8 paise

Karnataka 631.9 365.18

@ Rs 3.66 per unit (PPA signing date)

Rs 4.13 (10th year)

Andhra Pradesh 625 363.25 @ Rs 4.28 per unit  (2010-11)
Gujarat 457.7 0.5

@ Rs 4.40 per unit (with accelerated depreciation)

Chhattisgarh 248.5 231.9 @Rs 3.93 per unit (2010-11)
Kerala 195.9 @ Rs 2.80 per unit escalated at 5% for
five years (2000-01
Source: Biomass Atlas by IISc, Bangalore and MNRE website

The electricity generation could be cheaper than coal if biomass could be sourced economically but ssome established biomass power plants tend to misuse the limit of coal use provided to them (generally 10-15% of biomass use) to keep it operational in lean period of biomass supply. They are not able to run power plants solely on biomass economically which can be attributed to :

  • Biomass price increases very fast after commissioning of power project and therefore government tariff policy needs an annual revision
  • Lack of mechanization in Indian Agriculture Sector
  • Defragmented land holdings
  • Most of the farmers are small or marginal

Government policy is the biggest factor behind lack of investment in biopower sector in states with high biomass potential. Defragmented nature of agricultural lands do not allow high mechanization which results in reduction of efficiency and increase in procurement cost.

Transportation cost constitutes a significant portion of  the costs associated with the establishment and running of biomass power plants. There is need of processing in form of shredding the biomass onsite before transportation to increase its density when procurement is done from more than a particular distance. While transportation in any kind or form from more than 50 Km becomes unviable for a power plant of size 10-15MW. European power plants are importing their biomass in form of pellets from other countries to meet the requirement of the huge biopower plants.

Not all the biomass which is regarded as agri-waste is usually a waste; part of it is used as fuel for cooking while some part is necessary to go back to soil to retain the soil nutrients. According to conservative estimates, only two-third of agricultural residues could be procured for power production.

And as human mentality goes waste is nothing but a heap of ash for the farmer till someone finds a way to make profit out of it, and from there on the demand of waste increases and so its price. Though there is nothing wrong in transferring benefits to the farmers and providing them a competitive cost of the agri-waste but operations becomes increasingly unviable with time. A robust business model is necessary to motivate local entrepreneurs to take up the responsibility of supplying biomass to processing facilities. Collection centres covering 2-3 villages can be set up to facilitate decentralization of biomass supply mechanism. Biomass power plant operators may explore the possibility of using energy crops as a substitute for crop wastes, in case of crop failure. Bamboo and napier grass can be grown on marginal and degraded lands.