Despite inherent benefits, biomass-based power projects in the country are facing problems due to high operation cost, Secretary of Ministry of New and Renewable Energy (MNRE) Upendra Tripathy today said.
"Despite so many inherent benefits, a number of biomass power projects have of late been facing problems due to high cost of operation," he said.
Tripathy said this was mainly due to continuous rise in biomass prices while the revision of tariff for biomass-based power by SERC's too has not kept pace with the increasing costs of biomass.
He said existing inconsistencies in values of certain parameters have to be harmonised and taken into account by SERC's for determination of tariff.
"In the current scenario, financial institutions have displayed a reluctance in financing biomass power projects, thereby posing problems for new investments in the sector.
"The distribution companies, who are key to the off-take of biomass power, have also not been pro-active. They could play a more pro-active and encouraging role in order to promote the sector," he said after inaugurating a workshop on "Regulatory and Financial Barriers and Challenges in Power Generation from Biomass".
He appealed to SERCs to help in effecting reforms by taking cognizance of revised regulations recently notified by Central Electricity Regulatory Commission (CERC) and pass on the benefits to biomass power producers so that their plants can run economically.
CERC has also approved values for critical parameters and recommended annual revision of fuel price based on independent survey, a ministry statement said.
Underlining the importance of biomass-based power generation, the Secretary said it plays a very important role among various renewable sources due to its high Plant Load Factor (PLF), affordable unit cost of generation, potential to provide large scale productive employment and other economic benefits to farmers who are main producers of biomass.
