(Bio) Mass appeal

Biomass energy can be quite cost-effective in some situations, where feedstock is cheaply and easily available, and may result in abnormally high returns on investment, says PK Chaubey. Of the various renewable energy sources, biomass has always been an important, in view of its benefits. It is widely available, carbonneutral and has the potential to provide significant employment in rural areas. About 32 per cent of the total primary energy use in the country is still derived from biomass and over 70 per cent of the country's population depends upon it for its energy needs. Biomass primarily consists of: a) Wood fuels b) Crop residue c) Animal waste Biomass energy is used mainly for cooking and heating in rural areas. But now it is increasingly being used to generate power as the technology for has advanced. Key Drivers Key drivers for biomass in India are: The demand-supply gap, especially as population increases A large untapped potential Concern for the environment The need to strengthen India's energy security Pressure on high-emission industry sectors from their shareholders A viable solution for rural electrification Biomass projects are significant not only to avail the benefits of clean development mechanism but also from the socio-economic perspective due to its close linkage with rural and agriculture sector as it has the potential of employment generation and asset creation. In spite of all that interest in biomass, only 8 per cent (including cogeneration) of the potential has been tapped so far. As of now, it is being seen as a massive investment by many green firms backed by private equity players. Potential of biomass India's total biomass potential is around 25 GW of which around 8 per cent has been realised till date. Its current availability is estimated at about 500 million metric tonne per year. Studies sponsored by the Ministry of Renewable Energy (MNRE) has estimated surplus biomass availability of about 120 150 million metric tonne per annum covering agricultural and forestry residues corresponding to a potential of about 18,000 MW. Apart from this, additional power of about 5,000 MW can be generated through bagasse-based cogeneration in the country's 550 sugar mills, if they adopt better means to extract power from the bagasse produced by them. India has an ambitious plan to expand biomass capacity in the next 10 years and MNRE has set a very high target of multiplying capacity by 10 times in the next 10 years. Development A total of 279 biomass and cogeneration (cogen) projects of 2,560 MW have been installed in the country to feed power to the grid. In addition, around 95 biomass and cogen projects of about 950 MW of electricity are under various stages of implementation. Cogeneration projects in sugar mills include 149 projects with an installed capacity of 1,562 MW. Around 70 cogen projects of 700 MW are under implementation. Financial Assistance There is a scheme to provide central financial assistance in terms of capital subsidies, fiscal incentives such as 80 per cent accelerated depreciation, concessional import duty, excise duty, tax holiday for 10 years etc., for biomass projects. The benefit of concessional customs

and excise duty exemption are available on equipment required to initially set up such projects based on certification by the ministry. In addition, state electricity regulatory commissions have determined preferential tariffs and renewable purchase standards. Indian Renewable Energy Development Agency (IREDA) provides loans for biomass and bagasse cogen projects. Cost of a Biomass Plant Large-scale penetration of biomass power technologies depends on delivered cost and reliability in direct competition with conventional electricity sources in centralised power supply. In India, the principal competing source for power supply is coal-based power. Biomass energy cost varies, depending on the source, location etc. The delivered cost of coal too varies, depending on extraction and logistic costs that varies with the distance from the mine. Coal power plants are built with large-scale technology and a standard size of 500 MW whereas the scale of grid-based biomass plants varies from 1 to 50 MW. Also, the delivered cost of power from a 50 MW biomass-based plant is higher compared to a coal one by 15 per cent. In future, this gap may reduce due to three reasons: The scale difference between coal and biomass plants will reduce The cost of biomass will reduce due to improved plantation practices and Coal prices will increase since it is an exhaustible resource Biomass energy in general costs around Rs 4.5-5 per unit depending on feedstock used and the type of technology used in energy conversion. It is possible to have costs of Rs 2.25-2.5 per unit for co-firing plants that use existing equipment. Cogeneration is a cheaper option for agri-industry owners. Sawmills and paper plant owners can generate at very low cost of under Rs 2.25-2.5 per unit as their feedstock is virtually free and will be entirely wasted if not used to generate electricity. Sugar plants these days have ethanol production and power generation is a very important revenue stream. Returns from the plant Biomass power generation results in quick returns on capital investment. However, third-party sale is the biggest contentious issue in biomass. Forced to sell to state utilities, biomass power producers leave highly lucrative offers. Still it is able to provide a return on investment in the range of 20 to 36 per cent per annum, depending on the plant location, feedstock used, distance of the feedstock from the plant and management effectiveness. Profit of a biomass power plant can vary, depending on whether the monsoon season is good or not. In a drought year, the lack of biomass makes it expensive to run the biomass power generators, leading to lower profitability. The country promises to provide about 19 per cent pre-tax return on investments for biomass energy plants for an initial period of 10 years. Summary Biomass energy costs fall in a very wide range unlike solar and wind power equipment which is quite standardised and easily available. While wind and solar power costs don't depend on fuel costs, biomass energy is heavily dependent on biomass as feedstock. The cost of fuel is a major determinant of biomass energy. Biomass energy can be quite cost -effective in some situations where feedstock is cheaply and easily available and it may result in abnormally high returns on investment.

Biomass gasification: Status and trends

A company operating a biomass gasification power plant should have a firm grip on the price of feedstock, which is one of the most critical determinants of its feasibility, says Narasimhan Santhanamas he takes a look at other aspects such as the market, trends, potential, and central and state government incentives. While gasification as a technology has been prevalent elsewhere in the world as early as the 1940's, India pioneered the use of biomass gasification for power production in the recent decades. Following significant research and technology development or demonstration, the process has gained significant market acceptance after 2004. Even though it can produce power at small scales using locally available

resources, the total amount of power production from it in India is relatively low as compared to combustion and co-generation which is still the predominant route for biomass to power. As per Energy Alternatives India (EAI) estimates, the total installed capacity of biomass gasification-based power production in India will be only 10 per cent of the total biomass-based power (cumulative of grid-connected and off-grid). Of the total, bagasse-based power generation has the lion's share, followed by combustion-based biomass power production. Currently, most power production systems in India using biomass gasification are off-grid and have been for captive consumption for an industry or for a community. Market segments and applications

Industrial Village and community Biomass gasification for thermal applications Biomass gasification as a replacement for diesel Grid connected versus off-grid or captive applications

Biomass availability and potential Of the total biomass potential in India which totals to over 34 GW, it is agro residues which constitute a lion's share of over 55 per cent followed by livestock waste, which constitutes about 25 per cent. The urban waste and industrial waste constitute 10 and 4 per cent respectively. In the current scenario, dedicated energy crop plantations constitute a negligible proportion of the biomass potential. However, it is expected that in future, dedicated energy crops will play a crucial role in the biomass to power sector. It has been estimated that the total potential per annum from the biomass surplus in India is about 17,400 MW. Of this, paddy straw and husk together are said to contribute to over 30 per cent of potential and cotton and wheat about 20 per cent each. Thus, these three (rice, wheat, cotton) together constitute about 70 per cent of the total available potential. Of the three, currently, paddy waste and cotton waste are the ones used predominantly. Punjab, Uttar Pradesh, Maharashtra, Haryana and Karnataka are states with high biomass potential. Together, they comprise close to 50 per cent of the total estimated potential for biomass in India. Economics of power While biomass gasification-based power production provides a number of benefits, especially to remote electricity needs, it is imperative that it is economically sustainable to operate. The primary cost components of a biomass gasification system comprise feedstock cost, capital costs (gasifier + gas engine + supporting equipment + land + installation) and operating expenses (including maintenance and repairs). Capital costs The total capex for a 1 MW grid-connected biomass gasification power plant would be approximately Rs 5.5 crore to as high as Rs 8 crore. The cost will, however, vary with the type of gasifier that is used. Given the fact that there are many different gasifiers under operation like the updraft, downdraft, fixed bed, fluidised bed etc., the cost will proportionately vary. Operating Costs Manpower cost: The typical requirement for a 1 MW biomass gasification power plant will be about 15 people comprising labourers, engineers, supervisors and manager. The approximate labour cost for a gasification plant will be about Rs 15 lakh and this will obviously escalate year-on-year. Repairs & maintenance cost: Repairs and maintenance costs primarily comprise costs for cleaning the filters in the gasifier and periodical cleaning of the gas engines. The cost includes the cost of consumables, such as materials for repair (lube oil, gaskets, filter cloth, maintenance materials, chemicals for water treatment plant etc). The repair and maintenance cost will be around 5 per cent of the total capital cost for the gasifier and engine with an annual escalation of 5 per cent. If the total cost of the gasifier, engine and accessories are taken as Rs 5 crore per MW, then expenses towards repairs and maintenance will account to approximately Rs 25 lakh and this is bound to increase every year. Cost of biomass: The cost of feedstock is one of the most critical determinants of the feasibility of biomass gasification power plants. It is critical that a company running such a power plant has a firm grip on the price of feedstock. The price of feedstock depends on factors such as the biomass used, availability of such biomass in the neighbourhood, scale of operation etc. The cost of feedstock could vary from a low

of Rs 1,000 per tonne (for captive availability of local biomass waste) to Rs 200 per kg (for dedicated energy plantations undertaken by the power producer or for agro residues) to Rs 3,000 per kg (where the company is dependent on procuring biomass from the open market). In cases where fuel wood such as casuarina is used, the cost could be as high as Rs 4 per kg. Feedstock price fluctuations have been one of the main reasons why biomass gasification based power production has been unviable in many regions in the country. The feedstock price is the single-most influential factor that determines the viability of the power plant. The following examples will show why feedstock is such a crucial factor which influences the business.

At the end of 2010, the price of rice husk price was around Rs 1,800 per tonne while in the beginning of 2009, it was selling at about Rs 600 per tonne, implying a 300 per cent increase within 2 years. In some regions of Bihar for instance, farm and crop waste was sold at Rs 1 per kg in 2007, it increased to Rs 2 per kg by the beginning of 2010 and by the end of 2010, it had increased to Rs 3 per kg. A similar trend is seen in the prices of many other agro wastes when procured from the open market. A general thumb rule that is being mentioned by many biomass-based power producers is that, on an average, the price of biomass feedstock had doubled between the end of 2009 and end of 2010.

Levelised cost of electricity (LCOE) The levelised cost of electricity (LCoE) represents the total cost of power production (Rs/kWh), after factoring in all the cost components. The LCoE for biomass gasification-based power depends on how the critical parameter - cost of biomass is managed. Since most of the other expenses will be controlled by the developer it is the feedstock cost that influences the LCoE over the long run. The levelised cost can vary from Rs 3.36 to Rs 4.36, depending on the cost of feedstock. Revenue Revenue for a biomass gasification plant will be from the following three main sources: 1. Feed-in tariff from the utility (in the case of grid-connected power plants) 2. Sale of charcoal which is a co-product 3. Returns from CDM (carbon credits) From feed-in-tariffs

Considering an average power production of about 6 million to 6.5 million units per year, a feed-in tariff of Rs 4.5 per unit will guarantee revenue of Rs 2.7 crore to Rs 2.9 crore. If one chooses the REC + APPC route instead of the FiT route for revenue, returns from the sale of power and renewable energy certificates (RECs) will total to more or less the same value of Rs 2.7 to Rs 2.9 crore.

From sale of charcoal

Given the amount of charcoal generated per kg of biomass used is 0.05 kg, the annual charcoal production will be 450 tonne per year which will guarantee a revenue of Rs 45 to Rs 65 lakh depending on the selling price of charcoal.

From carbon trading (CDM)

For a 1 MW gasification plant, 4,500 certified emission reductions (CERs) could be accrued per year, which would translate to approximately Rs 27 lakh per year.

Pay-back period In the best case scenario, where biomass costs are low (especially if the company has excellent control over biomass prices from dedicated plantations) and with accelerated depreciation and capital subsidy benefits, the power producer could achieve pay-back within 4 years. Under more likely circumstances where the biomass cost is on the higher side but the government benefits are completely realised, the

payback period is about 5 years. A note of caution however is that, the payback period is critically dependent on the feedstock cost. If the biomass cost is much higher than Rs 4 per kg, the payback periods could be quite long and hurt the project's viability. Gasification technology and components Biomass gasification transforms biologically derived organic, carbonaceous materials into gas mixtures namely carbon monoxide, hydrogen, carbon dioxide and methane, charcoal and other volatile organics etc. This is achieved by allowing the biomass feed-stocks decomposition at elevated temperatures (700 to 900C) with a controlled amount of oxygen and/or steam. The predominant product is carbon-monoxide and hydrogen gas mixture called 'producer gas' and it serves as a gaseous fuel. The producer gas obtained by the process of gasification can have an end-use for thermal applications or for mechanical or electrical power generation. Thermal energy to the order of 5 MJ is released, by flaring 1 m3 of producer gas in the burner. Flame temperatures of up to 1,550 K can be obtained by an optimal pre-mixing of air with producer gas. For applications that require thermal energy, gasifiers can be a good option as a gas generator and retrofitted with existing devices. Some devices to which a gasifier can be retrofitted are dryers, kilns, furnaces, boilers etc. For power generation, the producer gas can either be used in mono or dual-fuel mode in reciprocating engines. In case of mono-fuel mode of operation, the gas is fuelled to a spark-ignition (SI) engine whereas in the dual-fuel mode it is operated along with a small quantity of liquid fuel (high-speed diesel, furnace oil or bio-diesel) in a compression ignition (CI) engine. The choice of mode of operation is entirely dictated by the economics of operation. The gasification system could be primarily classified as fixed bed or fluidised bed gasification system. Fixed bed gasification system The fixed bed gasification system consists of a reactor or gasifier with a gas cooling and cleaning system. The fixed bed gasifier has a bed of solid fuel particles through which the gasifying media and gas move. On the basis of these factors, it is classified into principal types namely,

Updraft fixed bed gasifiers Downdraft fixed bed gasifiers

Fluidised-bed gasification system A fluidised-bed gasifier is a vessel with dimensions made in such a way that the superficial velocity of the gas maintains the bed in a fluidised condition at the bottom of the vessel, with a change in cross-sectional area above the bed that lowers the superficial gas velocity below fluidisation velocity to maintain bed inventory and act as a disengaging zone. The fluidised bed looks like a boiling liquid and has the physical properties of a fluid. In fluidised-bed gasification of biomass the gas is air, oxygen or steam, and the bed is usually sand, limestone, dolomite or alumina. The gas acts as a fluidising medium. It is principally classified into: Bubbling fluidised bed gasifiers Circulating fluidised bed gasifiers. Components of gasification technology Fuel storage area: The fuel storage area is where the biomass feedstock is treated and stored. The stored amount of fuel is dependent on the respective configuration of the plant (performance range, fuel logistics and plant operating state). Besides the amounts of biomass feedstock, it is also necessary to pay attention to the storage of auxiliary fuels (propane gas, diesel fuels, etc.) for various co-combustion purposes. The storage area is also essential for combustible operational supplements (lubricating oils, washing emulsions for the operation of the gas cleaning plant, etc) and residue from plant operation. Biomass sizing system: Gasification plants usually incorporate a size reduction unit to cut the biomass into smaller pieces prior to feeding into the gasifiers. Fuel conveyance system: The fuel conveyance system is essential for transportation of feedstock from the storage area to the fuel feeding system. Depending on the size of the fuel and storage conditions, various discharge systems such as walking floor, travelling grate etc.,

could be used for the transport of the fuel from the storage area Fuel feeding system: Feeding of the fuel (feedstock) into the gasifier is normally carried out by means of a clocked conveyance system that is activated by the output regulation of the entire system. Fuel feeding is usually carried out via a gas-tight transfer canal that prevents gas leakage. The gasifier: It is an enclosed reaction vessel where biomass material transformation occurs under partially oxygenated, extreme temperature conditions to generate producer gas which will be subsequently used for production of heat and electricity after processing. Gas cooling systems: Gas cooling is done to lower producer gas temperature. The gas cooling systems usually comprise heat exchangers and the type and efficiency of the heat exchanger will vary according to the application requirements of producer gas. Gas cleaning systems: Gas cleaning is essential to provide uniform producer gas quality. The gas cleaning systems comprise of cyclones and filters. Water treatment plant: Water is required for cooling and scrubbing of gas prior to the supply of gas to the engine. Cooling water of about 80 M3/hour is required on a continuous basis. To optimise on the utilisation of limited resources, the system will usually recycle the wash water. The power plant will have a water treatment plant for continuous filtration and purification of water. Cooling tower: A cooling tower is provided to cool recycled cooling water after water treatment to maintain its temperature within the prescribed limits. Char extraction unit: The char extraction unit consists of a screw blender for intermittent extraction of char or ash. The charcoal, which has commercial value, is milled to the required size, bagged and sold. Central and state govt incentives Feed in tariffs: For most renewable energy power projects, support from the government in the form of incentives and high feed-in tariffs is critical for their success. It must however be noted that biomass gasification power projects, while they too will become more economically feasible with government incentives, do not require as much as assistance from the government as do some others such as solar power plants (both PV and CSP). In fact, where the power producer is able to control biomass prices below a reasonable level, biomass gasification-based power plants have levelised costs of electricity production competitive with grid power. Most Indian states have specified feed-in tariffs for biomass power. In addition, biomass gasification power plants can also avail of other financial incentives from the government. Biomass gasification Biomass gasification is a thermo-chemical process wherein solid carbonaceous materials, containing inorganic and organic constituents, react with air or oxygen to provide sufficient exothermic energy to produce a primary gaseous product containing mostly CO, H2, CO2 and light hydrocarbons (with volatile and condensable organic and inorganic compounds). Most of the inorganic constituents in the feedstock are discharged as bottom ash. The raw gas is then cooled, filtered, and cleaned or scrubbed to provide producer gas that can be used in energy conversion devices such as internal combustion engines or gas turbines. The author is founder and Director, Energy Alternatives India (EAI). Views are personal