Council on Energy, Environment and Water Integrated | International | Independent
Bioenergy generated from organic waste can generate power through the direct combustion of biomass, gasification of biomass into syngas, cogeneration (heat plus electricity) of bagasse or non-bagasse feedstock and co-firing biomass pellets in coal power plants. Bioenergy is a renewable source of energy which provides value and generates income for surplus crop residue and other waste. Here, the market opportunity and jobs potential is estimated for two applications- 1. co-firing of biomass pellets in coal power plants, which has been mandated by the Ministry of Power, and 2. biomass-to-power plants.
Jobs overview
● In Odisha, it is projected that surplus biomass of rice, maize and green gram, after accounting for other uses such as fodder and fuel, would stand at 4.48 million metric tonnes (MMT) ( ASCI 2021). After accounting for biomass needed to meet the potential for establishing a packaging industry (1.16 MMT) and to meet feedstock for existing biomass to power plants (0.07 MT), there would be an additional surplus of 3.25 MMT biomass. Of this, the surplus crop residue may be used for co-firing and in biomass-to-power plants.
● Currently, MoP has mandated 7 per cent co-firing in coal power plants by 2030. If Odisha coal power capacity increases from 5.16 GW (currently) to 6.48 GW (assuming completion of under construction Talcher Unit 3 coal plant) (CEA 2023), Odisha would need 2.18 MMT of biomass for co-firing (MoP). If Odisha were to meet this mandate, a total of 2044 jobs 1 would be generated in pellet manufacturing plants. An additional 6131 jobs would be generated in jobs such as biomass collection, aggregation, raker and bailing workers and trolley drivers (Skill Council for Green Jobs).
● After accounting for biomass used in co-firing, the balance biomass accounts to 1.07 MMT, which can be further used in biomass to power plants of approximately 150 MW. After accounting for existing plants and assuming the balance biomass is used to add capacity to biomass plants in a linear trajectory, a total of 4420 jobs would be created (Kuldeep et al., 2019).
● The total jobs in biomass to power and co-firing would be approximately 12,500 FTE jobs.
Market Opportunity
● Market opportunity for pellets would be USD 210 million, assuming price of pellets stays constant at INR 8/kg (IndiaMART).
● The market opportunity for biomass-to-power plants would be USD 70 million annually after meeting deployment of 143 MW.
● Total market opportunity would be INR 2,400 crore ( USD 300 million).
Investment Opportunity
● Investment opportunity for setting up pellet plants would be USD 86 million assuming 2 cr per tonne per hour (Aggarwal, 2023) if Odisha meets MoP mandate of 7 per cent co-firing, the investment opportunity to set up biomass-to-power plants would be USD 80 million (CEA 2020). Total investment to leverage the state’s biomass would be INR 1500 crore (USD 300 million).
1. Grid stability: With the increasing share of variable RE sources, such as solar and wind power, which are highly intermittent, biomass can help support grid stability since it can be dispatched on demand.
2. Emission control: Surplus biomass generated from agriculture is often burnt, resulting in air pollution and black carbon emissions.
3. Distributed RE: Biopower can complement solar power in distributed RE applications. Biopower can be used in rural MSME industries while increasing energy access for rural communities and promoting a circular economy.
4. Surplus income to farmers: Selling of surplus biomass provides value and generates income for surplus crop residue and other waste for farmers.
Between April and December 2023, Chhattisgarh generated the most power from non-bagasse biomass power projects (1038.21 MU). The corresponding figure for Odisha was only 73.21 MU (Central Electricity Authority 2023). However, like Odisha, most of Chhattisgarh's (86 per cent) potential comes from surplus biomass from rice production.
The Siltara Industrial Areas in Siltara, Raipur district, is a hub for biomass power plants, such as a 20 MW power plant developed by Godawari Power and Ispat Limited (GPIL). GPIL’s power plant uses rice husk as feedstock and produces power through direct combustion using Rankine-cycle technology. Rice husk is procured from within a 50 Km radius and contributes to GHG reductions worth more than 107,000 tonnes of carbon dioxide each year (Ecologi).
One of the major reasons behind Chhattisgarh’s relative success with biomass power generation has to do with the steel and iron industry, as much of the state’s biomass power plants, including the 59 MW currently in the pipeline (Central Electricity Authority 2023), are developed by steel and sponge iron manufacturing companies and a large portion of the power generated is consumed by the manufacturing unit. This model can be very useful for Odisha as the state aims to achieve 300 million tonnes of steel manufacturing capacity by 2030 (Department of Steel and Mines). The state can nudge its steel manufacturing industry towards reducing carbon emissions by providing incentives, such as accelerated depreciation, for installing captive biomass power plants.
1. Role of departments:
a. Department of Agriculture and Farmers’ Empowerment (DAFE): The department of agriculture can take a leading role in identifying hotspots of biomass surplus and publish data on the calorific values of crops.
b. Department of Cooperation: The Department of Cooperation, along with its agencies, Odisha State Co-operative Bank, Odisha State Agricultural Marketing Board, and Odisha State Warehousing Corporation, can work with farmer cooperatives and FPOs to develop viable biomass aggregation business models. Providing affordable credit and storage facilities will be crucial. The department may also implement and spread awareness about subsidies to purchase machines as provided by MNRE.
c. GRIDCO: As the state nodal agency for renewable energy, GRIDCO may work towards communicating targets to the private sector regarding biomass to power plants, which would eventually ensure sustained confidence of growth in the sector.
d. Department of Steel and Mines: Since growth in steel manufacturing is a major goal for the state, which brings with it environmental and GHG emission concerns, the Department of Steel and Mines and the Industries Department can nudge steel manufacturers to develop captive biomass power plants, learning from Chhattisgarh as discussed in the case study.
e. Odisha Power Generation Corporation (OPGC): OPGC owns 1740 MW of coal power generation capacity (CEA 2024). As OPGC installs more coal power capacity, it must design power plants which can support over 10 per cent biomass cofiring, such as NLC India’s upcoming Talabira thermal power plant (3*800 MW capacity) in Sambalpur, Odisha, which is being designed to support up to 10 per cent biomass co-firing (Standing Committee on Energy, 2024) and is expected to be commissioned by June 2026 (PIB, 2024). So far, only CPSUs, NLC India, Damodar Valley Corporation and NTPC have actively implemented the Ministry of Power’s 5-7 biomass cofiring mandate (Standing Committee on Energy, 2023, 32-36). OPGC has a unique opportunity to pioneer at the state level.
2. Role of the private sector:
a. Biomass supply chain operators and aggregators are integral to the value chain. Since biomass supply is a bottleneck, biomass aggregators must work with civil society organisations (CSOs) to ensure biomass is not burned but channelled into other uses.
b. Private coal power generation capacity in Odisha is 1,686 MW (CEA 2024). Given the 64 tonnes of biomass cofiring that has occurred in the state as of May 2023, steps 3 can be undertaken to promote and support pellet manufacturing units to ensure a steady supply of biomass pellets.
3. Role of local administration and civil society organisations (CSOs): CSOs play an integral role in 1) identifying biomass surplus after accounting for local needs of biomass - fodder, fuel, etc., and communicating seasonal variability to the biomass industry, and 2) ensuring that biomass is not geared only towards energy or fuel, but also for local purposes that may not be as lucrative.
1. Lack of data on biomass availability: Lack of reliable and updated data on biomass feedstock availability at the district and block level hampers the development of non-bagasse biomass cogeneration plants. Under these circumstances, developers conduct their own analysis of feedstock availability on a case-by-case basis. This results in added project costs and delays while failing to ensure reliable data availability for other projects in similar geographies. In addition to feedstock availability by weight, there is little data on the feedstock's gross calorific value (GCV). This is problematic since GCVs of biomass feedstock vary widely across the country. The Department of Agriculture along with CSOs may work towards collating and publishing this data.
2. Price volatility: Biomass feedstock prices are highly erratic for several reasons. Such volatility increases risks for project developers and constrains biomass power's ability to achieve competitive tariff rates (IRADe 2021).
The government may actively encourage the development of biomass feedstock markets, create mechanisms to ensure continuous supply. Biomass aggregators and power plants may get into long-term contracts with predetermined quantity requirements as per season to enable planning and ensuring biomass is supplied on agreed conditions.
3. Logistical issues: limited storage capacity and transportation: Lack of adequate storage pushes farmers and other biomass producers to dispose of surplus biomass through stubble burning and other highly polluting processes, thus reducing feedstock availability and increasing air emissions. To preserve feedstock quality over long distances, transportation of biomass requires specialised carriage facilities, which are often expensive and not widely available. Storage goes hand-in-hand to ensure feedstock availability all through the year.
Storage can be undertaken by most players in the sector, from agriculture co-operatives to ensure value is generated from additional biomass to biomass supply aggregators – who may leverage the surplus biomass in Odisha and build a business of supplying biomass, etc. The government may deliberate on providing land-related incentives to these players to set up storage facilities.
4. Absence of biomass market: The absence of a biomass market manifests itself in several ways.
These are:
a. Lack of incentives for collection and aggregation: Even though the volume of biomass produced in India is immense, it has many competing uses as industrial input, such as in paper and particleboard wall panel production. These other sectors have more developed markets and procure biomass at a higher rate, disincentivising biomass collection and aggregation for power generation. Inefficient collection and aggregation also damage the GCV of biomass, thus decreasing its power production potential.
b. Financing constraints: Due to the higher tariffs and slow growth of biomass power projects, developers can only secure credit at much higher interest rates than other RE technologies. This creates a vicious cycle of continued slow growth.
c. Lack of adequate feedstock vendors: Given the price volatility and more well-developed markets for biomass for competing uses, the feedstock supply for biomass power plants is unreliable, making project planning difficult. Developers desire to enter long-term feedstock supply contracts with vendors to minimise supply risk. However, there are few such vendors in the market.
d. Absence of a biomass trading platform: The absence of trading platforms at a regional platform increases the cost of coordination and transaction between biomass aggregators, processors and power project developers.
5. The unwillingness of DISCOMs to sign PPAs: Due to the highly seasonal nature of most biopower production in India and the unpredictability of biomass feedstock supply, DISCOMs have been unwilling to sign PPAs with grid-connected biopower projects. The lack of security provided by long-term PPAs further discourages project developers (Standing Committee on Energy 2019-20).
DAFE may create an ecosystem of information on biomass availability across seasons and develop a platform for coordination between stakeholders, which would lead to better reliability and prediction of power generation from plants.
1. Scaling biomass would lead to an increase in demand for crop residue. This could influence stakeholders to shift to crops that provide high volume residue or even use forested land for cultivation. Secondly, while use of biomass in coal power plants or through direct combustion is less polluting than coal, it still emits pollutants such as nitrous oxide, sulphur oxides and heavy metals (when input is contaminated) (IEA 2024).
Mitigation: To mitigate the risk of pollution, the State Pollution Control Board can provide financial assistance for air pollution control devices.
For this report, only biomass to power and co-firing are considered. Under biomass to power, operations, construction and collection jobs have been included. For cofiring, collection and pellet manufacturing jobs are included.
Market sizing (in units):
● Biomass from only rice, maize and green gram are included in this calculation since these three crops account for 96 per cent of the state's total biomass surplus and 97 per cent of the total estimated biomass potential according to the ASCI's 2021 report titled "Evaluation Study for Assessment of Biomass Power and Bagasse Cogeneration Potential in the Country".
● Biomass produced in Odisha in 2030 is projected after multiplying the average area under cultivation and the projected yield of crops in 2030. The yield is projected using the CAGR for the past 5 years (2017-22).
● To estimate the “surplus” biomass, ratio of surplus biomass to biomass produced was adopted from the ASCI, 2021. ASCI has accounted for fodder and fuel requirements at the farm level.
● Surplus biomass has competing uses post farm. Principles of prioritisation have been adapted from Muscat et al., 2021, where priority starts with human need where sustainable alternatives are not available (food, pharma), followed by livestock and fish consuming human in-edible biomass, followed by creating material such as clothes, packaging, etc. and lastly used to created bioenergy. Allocation of surplus biomass has been made as per the following:
Table 1 Allocation of Biomass Surplus to various value chains
● Ratios used to calculate biomass surplus.
Table 2 Key ratios used
Jobs estimation:
Biomass to power
● The employment coefficient for Biomass to power has been adapted from IASS, TERI, CEEW & SCGJ 2019. Additionally, jobs in fuel supply, biomass aggregators, biomass collection and storage labor, raker and bailing worker, trolley driver have (SCGJ) have also been included.
Table 3 Employment Coefficients for Biomass to Power
● Based on the above coefficients, the below job numbers have been calculated.
Table 4 Total jobs across phases
Pellet manufacturing
● The employment coefficient for pellet manufacturing and jobs in collection transportation, etc. has been adapted from Skill Council for Green Jobs.
● Based on the coefficients, the employment numbers are calculated as below.
Table 5 Jobs in pellet manufacturing
For biomass to power, benchmarks were taken from CEA’s Technology Catalogue.
Table 6 Investment Opportunity
● For pellet manufacturing, it was assumed that 2 crore per 1 tonne per hour (THP) would be required (Aggarwal 2023). Accordingly, investment opportunity was calculated using simplistic assumptions with limitations such as not factoring densification rate. With a 70 CUF, an estimated 0.006 million tonnes of pellets would be used by a 1 THP plant. To reach the potential, 356 one THP plants would be required. Thus, total investment required is USD 86 million.
● To calculate the market opportunity in 2030, the market price for pellets is assumed to be INR 8 per kilogram. For biomass to power, the tariff was assumed to be INR 5.82/ kWh (Joshi, 2023).
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https://edepot.wur.nl/553280
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“Revised Biomass Policy mandates 5% biomass co-firing in Thermal Power Plants from FY 2024-25: Union Minister for Power and New & Renewable Energy”. PIB, August 2, 2023.
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