Why Start Manufacturing Biomass Pellets in India?
Government Policy and Support
Indian government is taking initiative to help use biomass pellets in thermal power plants. The changed biomass policy makes it a must for these plants to do 5% co-firing with biomass from financial year 2024-25, and then this will increase to 7% starting from the next year, which is 2025-26. This policy change shows India’s commitment towards reducing air pollution and moving towards greener energy methods. The Indian government has shown clear interest in supporting the use of biomass pellets, particularly for thermal power plants. The revised biomass policy indicates that there will be an obligatory requirement for all these types of facilities to incorporate a minimum amount of co-firing with biomass: this starts at 5%. In the fiscal year beginning on April 1st, 2024 and increases by two percentage points every new fiscal year until it reaches seven percent from April first two thousand twenty five onwards (2025-26). Such highlighted changes point out not only India’s dedication towards lessening air contamination but also its goal for more sustainable sources of energy. The government has also introduced several initiatives to support the biomass pellet industry, including:
- Financial Aid Programs: For starting biomass pellet manufacturing units, there is financial help available from the Ministry of New & Renewable Energy (MNRE) and the Central Pollution Control Board (CPCB).
- Priority Sector Lending: The Reserve Bank of India (RBI) has added biomass pellet manufacturing to the list of activities included in Priority Sector Lending. This change will provide more convenience for businesses attempting to secure loans.
- Government e-Marketplace (GeM) Portal: A procurement facility solely for biomass pellets has been organized on the GeM portal. This allows simpler buying and control of supply chain.
Environmental Benefits
Biomass pellets, derived from agricultural and forestry waste like straw, saw dust or leaves, are a recurring source of energy. Since they come from plants that can be grown again, these materials are considered abundant and renewable resources. They also help to lessen the emission of greenhouse gases because when we burn biomass pellets for fuel purposes there is much less CO2 released into the atmosphere compared with coal emissions which are quite high in comparison. Also, biomass pellets do not emit harmful pollutants such as sulfur oxides, which makes them cleaner for producing energy.
Economic Viability
The market for biomass pellets is growing fast, pushed by a rising need for renewable energy. Predictions say that the size of global biomass pellets market will reach from $9.5 billion in 2023 to $16.0 billion by 2033 with compound annual growth rate (CAGR) of 5.4%. In India, there’s lots of agricultural waste and government support which makes making biomass pellets a good business chance.
Manufacturing Process
The making of biomass pellets has various stages. This includes screening, drying, separation, molding and granulation, cooling and finally packaging. The process starts by screening the raw materials to take out any dirt or impurities. Next is drying stage where we lessen moisture content in these items. The dried things are then separated to get rid of any left moisture before being pressed into pellets using a pellet press machine (Lappi et al., 2016). The pellets are then cooled and packaged for distribution.
Market Opportunities
The need for biomass pellets goes beyond just thermal power plants. They are used in homes for heating purposes, industrial boilers, and even cooking in rural places. Because of their versatility along with high energy concentration as well as easy handling and mobility qualities makes it an appealing choice across different uses.
What are the key benefits of using biomass pellets in thermal power plants
Environmental Benefits
- Reduction in Carbon Emissions:
Biomass pellets are thought to be carbon-neutral throughout their life. Combining them with coal brings down the environmental impact in a big way for power plants that make use of heat. If we swap 5-7% of coal consumption with biomass, it could lead to around 38 million tonnes less carbon dioxide released every year.
- Mitigation of Air Pollution:
Burning biomass pellets together is a solution for decreasing air pollution from open burning of farm leftovers. This method can be especially effective in areas like India’s National Capital Region (NCR), where burning stubble contributes to significant environmental problems.
Economic and Regulatory Benefits
- Compliance with Environmental Regulations:
Co-firing biomass pellets can assist thermal power plants to fulfill strict environmental rules and lower carbon goals. It does not need large modifications in the current setup, thus it is economically feasible for power plants that are attempting to switch over cleaner forms of energy.
- Government Incentives and Financial Support:
The Indian government offers many financial encouragements and support systems for biomass pellet production. This covers financial help from the Ministry of New & Renewable Energy (MNRE) and Central Pollution Control Board (CPCB), along with easier loans under Priority Sector Lending.
Energy Security and Resource Utilization
- Reduction in Coal Dependence:
The process of mixing coal with biomass pellets in a power plant aids in decreasing the need for coal as the main fuel. This brings about benefits like enhancing energy security and supplying energy more sustainably, because biomass is a renewable resource.
- Utilization of Agricultural and Forestry Waste:
Biomass pellets, which are derived from agricultural residues and forestry waste that would otherwise be regarded as waste materials, offer a productive use for these goods while also decreasing the burden on landfills and aiding in waste management.
Operational Benefits
- Compatibility with Existing Infrastructure:
Researches have indicated that 10% of biomass is the maximum limit which can be co-fired with coal in current thermal power plants without causing any negative effect to their functioning. This shows how it could be a real method for incorporating renewable energy sources into the present energy blend.
- Job Creation and Rural Development:
The industry of biomass pellet could be a large creator of jobs, especially in countryside locations where there is plenty of agricultural leftovers. This has potential to aid with development in rural areas and offer more income for those working as farmers.
Economic Benefits of Using Biomass Pellets in Thermal Power Plants
Cost Savings and Financial Incentives
- Reduction in Fuel Costs:
Biomass pellets could work as a cheaper substitute for coal. The prices decided by the Indian government as reference for biomass pellets are good, and they are competing with coal rates. This makes them cost-effective choice in terms of thermal power plants. The non-torrefied biomass pellet’s price is Rs. 2.24 per 1000 kcal in the Western Region and Rs. 2.27 per 1000 kcal in the North Region.
- Government Subsidies and Financial Assistance:
The government of India gives significant financial aid as backing to promote the utilization of biomass pellets. The MNRE’s “Biomass Programme” is an example that provides monetary help for establishment of biomass pellet plants, and Central Pollution Control Board (CPCB) offers one-time monetary assistance for building pellet plants in NCR. These subsidies lower the starting capital needed to create biomass pellet-making units.
Regulatory Compliance and Avoidance of Penalties
- Meeting Environmental Regulations:
Thermal power plants, especially those that are big in size, can use biomass pellets to follow strict environmental rules. Not meeting these regulations might result in heavy fines and other punishments. Including biomass pellets can help these plants reach their carbon reduction goals without needing to make major changes to the existing infrastructure of the plant, which would avoid regulatory penalties.
- Priority Sector Lending:
Biomass Pellet Manufacturing: The Reserve Bank of India (RBI) has added biomass pellet manufacturing to the category of Priority Sector Lending. This inclusion makes it simpler for businesses in this field to secure loans, lessening the financial stress on power plants and pellet manufacturers.
Operational and Market Benefits
- Enhanced Energy Security:
When biomass pellets are used, it lessens the need for coal which is not renewable. This helps in making energy more secure because you rely less on resources that could run out eventually. The variety of fuel options brings about a steadier and enduring supply of energy. This is very important for keeping economic stability over time.
- Utilization of Agricultural and Forestry Waste:
Biomass pellets come from leftovers in agriculture and waste from forests, which are generally considered as garbage. Turning these things into energy brings a useful purpose for them, lessens the cost of getting rid of it and also helps create more income opportunities within farming areas or country sides.
Job Creation and Rural Development
- Employment Opportunities:
The industry of biomass pellet can make a large number of jobs, especially in rural places where there is plenty agricultural leftover. This could help with the development of countryside and give farmers another way to earn money. Calculations show that biomass pellet projects have potential to provide work for over 200,000 workers full time in operations and making process.
- Economic Development in Rural Areas:
The biomass pellet sector can help boost the economy in less urban regions by giving a market to agricultural leftovers. Such activity aids rural life by improving the living conditions of farmers, offering employment opportunities and encouraging development of local businesses dealing with biomass gathering, processing and transport.