Biomass, Finance

TNEB promises help for biomass producers

According to reports, the Tamil Nadu Biomass Power Producers’ Association has been promised help by the Tamil Nadu Electricity Board(TNEB). In a meeting called by the TNEB last week members of the Association made a strong plea, among others, for the abolition of the ‘electricity duty’ on biomass power.

The Chairman and Managing Director of the Board, K Gnanadesikan, is said to have promised to take up the matter with the Revenue Department.

The state has about 150 MW of biomass power plants. To put this in perspective, when adjusted for capacity utilisation, this is equivalent to about 550 MW of wind power or about 750 MW of solar power capacity.

However, about a third of the biomass capacity is lying shut. The rest are barely surviving.

Industry sources attribute this to a plethora of problems, but mainly to the increase in the prices of fuels.

Tamil Nadu’s electricity generation and distribution utility, TANGEDCO, offers Rs 4.75 a unit. However, most of the plants have ‘exited the power purchase agreement’ and are selling their power to third parties in the state. This fetches them between Rs 5.20 and Rs 5.50 a unit. Of course, they get ‘renewable energy certificates’ which can be sold in the market at a minimum price of Rs 1.50 a unit—but this is more in theory than practice, for the REC market is down in the dumps, as those who are mandated to buy the instruments have not been doing so.

Even factoring in the Rs 1.50 from REC sales, the biomass producers are “barely keeping ourselves afloat.”

If the Tamil Nadu government exempts them from paying the electricity duty it would not only help them, but also get the shut plants restarted, an industry official said.



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