Another critical area to keep an eye on in the non-renewable energy space would be the co-firing of biomass with coal in our coal plants. Given the number of coal fired plants we have this could have far reaching consequences. Let's take look at why biomass co-firing is a good idea. There are many good articles available on this topic. I have take 3 recent articles that I think summarizes it really well:
1. The need/benefits of co-firing Biomass in India:
Can biomass co-firing offer a viable solution to coal shortage and stubble burning ?
It is a win-win solution for the farmers and the environment
By Jasleen Bhatti
Published: Thursday 21 October 2021
The Government of India (GoI) has made it mandatory for thermal power plants in three categories to use a 5 per cent blend of biomass pellets and coal. The policy will come into effect in October 2022, with a requirement to increase the blend to 7 per cent within two years for two categories of plants. The co-firing policy will be in effect for 25 years or till the useful life of the thermal power plant, whichever is earlier.
India's economy is on the path to recovery since the second wave of the novel coronavirus disease (COVID-19) pandemic. The first half of October saw a 4.9 per cent increase in electricity consumption compared to September. However, coal supply fell short of demand by 1.4 per cent. The government reported a shortage in coal supply despite abundant reserves.
Several factors contributed to this, including an increase in electricity demand due to the recovery of the economy (and the festival season), rains in coal-mining areas and insufficient stocking of coal before the monsoon season. Moreover, global energy prices are on the rise. The factors combined resulted in outages in several states.
India has shown rapid growth in installed renewable energy capacity. The country still relies heavily on coal-based power generation to meet most of its electricity demand.
The power sector contributes nearly 50 per cent of the sector-wise carbon dioxide (CO2) emissions. Coal and coal-based power is the single-largest contributor of CO2 emissions in India, according to the International Energy Agency (IEA).
CO2 emissions based on sector and fuel usage in India
Source: International Energy Agency, 2020
Efforts to ensure 24x7 power supply to all grid-connected households will mean a significant increase in coal-powered electricity and CO2 emissions. Coal imports will also rise, which will increase energy security concerns.
Gross electricity generated from utilities and net availability of electricity (in GWh)
Source: Ministry of Statistics and Programme Implementation (MoSPI)
In India, the government is committed to ensuring that all grid-connected households have 24x7 access to reliable power. The result will be a significant increase in coal-fired power generation and CO2 emissions. Coal imports will also rise, which will increase energy security concerns.
Year-wise availability, production, and imports of coal in million tonnes (MT)
Source: Office of the Coal Controller, Ministry of Coal
India declared its Nationally Determined Contribution goals for 2030 in the 2015 United Nations Climate Change Conference to limit global warming to well below 2 degrees Celsius (preferably 1.5°C) from pre-industrial levels. The country ratified the same in October 2016.
It includes lowering the emissions intensity of its gross domestic product by 33-35 per cent compared to 2005 levels by 2030 and also increasing cumulative electricity generation from renewable energy sources to 40 per cent by 2030. India must reduce coal-based GHG emissions rapidly to meet the NDC goals. Coal plants with higher emissions will be shut down and replaced with cleaner ones soon.
How prudent is it for India to construct new coal power plants at this time, given that countries around the world have stopped investing in coal-fired power plants ?
Biomass co-firing has been shown to reduce coal power plant carbon footprint in Europe, the US and the United Kingdom, according to a report by the International Energy Agency (IEA). Biomass pellets made from agricultural waste have equivalent calorific value to that of Indian coal, based on estimates from the Central Electricity Authority (CEA).
In the past decade, crop residue burning has caused terrible pollution in northwestern India, especially in Punjab, Haryana and Uttar Pradesh. Around 85 to 100 million tons of crop residue have been burnt in recent years, despite various government policies aimed at reducing crop burning.
Co-firing biomass pellets with coal in India is a promising strategy for reducing GHG emissions from coal-based power plants. In places where agro-residue burning is prevalent, this can result in a reduction of coal dependence and a sharp decline in pollution levels.
Farm fires have already begun in Punjab and Haryana.
Stubble burning in Punjab and Haryana as of October 11, 2021
The red dots indicate the number of fires in the area. Each dot corresponds to one of the several areas where the fire is located.
Source: NASA Satellite Image
In contrast to last year, there are no apparent differences in the number of fires. In October, rice is harvested and rabi crops must be planted within a few days after removing crop stubble.
In earlier days, only a small portion of the stubble was burned. However, in recent times, labour shortages, increased use of harvester technology (which leaves a longer stubble) and lack of market linkages to maximise residue use have all contributed to a significant rise in crop residue burning.
In India rice, wheat and sugarcane alone contribute nearly 80 per cent of the agro-residue.
Crop-wise agro-residue generation in India
A third of the gross residue is considered theoretical surplus. For bagasse, the gross residue is itself considered as theoretical surplus. Source: CSE estimate using 2016–17 crop yields of five major crops
India is largely agrarian, with around half its population engaged in farming. Uttar Pradesh produces nearly a quarter (130 million tonnes) of India's total agro-residue. Punjab, West Bengal, Madhya Pradesh, Maharashtra and Bihar are the other top agro-residue producers.
Nearly 550-650 million tonnes of gross agro residue is generated in India. Of this, 160–190 million tonnes is available for bio-energy, according to the Union Ministry of New and Renewable Energy (MNRE) website.
Crop residue burning contributes significantly to air pollution in our cities, according to the CSE analysis. Burning 100 million tonnes of crop residue in the field emits approximately 140 million tonnes of CO2, 5.8 million tonnes of CO and 1.1 million tonnes of particulate matter (PM).
Crop residue burning releases sooty black carbon, which is a major contributor to climate change. CO2 and other emissions under various agro-residue use scenarios have been analysed.
The potential for utilising agro-residue varies from zero to almost 100 per cent. NOx and SO2 emissions decrease with an increase in blending percentage.
Impact on CO2 and other emissions under various agro-residue utilisation scenarios
For this Calculation, agro-residue burning is not considered carbon neutral. NOx emissions reduction
is dependent on the firing technology and properties of the biomass used.
Source: Centre for Science and Environment, 2020
A stand-alone solution to these two problems (stubble burning and coal generating power) will burn a hole in the exchequer’s pocket, and even afterward, returns on investment will not be guaranteed. What if we were to see the broader picture and make one problem the solution to another problem ?
This resource cannot be ignored, with around 50 per cent of the population engaged in agriculture. Agro-residue co-firing in older power stations can solve the government's plethora of problems. An effective method to address pollution and mitigate climate change is to identify older units that are operating efficiently and to promote their co-firing with biomass.
Pellet and briquette manufacturers’ factory-gate prices for agro residue range between Rs 2-2.5 per kilogram (Rs 2,000-2,500 per tonne). Prices vary significantly with the type of crop residue.
This cost is mainly made up of labour costs associated with collecting agro-residue from the fields, loading and unloading it as well as transporting it. After deducting the labour and transport costs, farmers can earn between Rs 500-Rs 1,500 per tonne of crop residue.
In addition, pellet manufacturing, storage, handling and transportation create jobs in rural areas.
Can biomass co-firing offer a viable solution to coal shortage and stubble burning?
2. The domestic supply chain perspective for Biomass in India:
Meeting green targets through biomass
Biomass can be an effective means to raise the green footprint but there are some issues that need to be resolved
By Richa Mishra | Updated on December 11, 2021
Green thrust Biomass co-firing in thermal plants is mandatory. Image: NTPC's new Patratu Super Thermal Power Project in Ramgarh district, Jharkhand. (Representational Image)
Green energy is not only about solar and wind, but about biomass too. Biomass today is an important fuel in many countries, especially for cooking and heating in developing countries and over the years its use as fuel for transportation and electricity generation has been increasing.
India’s focus on this segment of green energy also comes from the statements made by the Prime Minister Narendra Modi. In his statement at the recently held COP26 summit, the Prime Minister said:
“In the midst of this global brainstorming on climate change, on behalf of India, I would like to present five nectar elements, Panchamrit, to deal with this challenge.
“First — India will reach its non-fossil energy capacity to 500 GW by 2030.
“Second — India will meet 50 per cent of its energy requirements from renewable energy by 2030.
“Third — India will reduce the total projected carbon emissions by one billion tonne from now onwards till 2030.
“Fourth — By 2030, India will reduce the carbon intensity of its economy by less than 45 per cent.
“And fifth — by the year 2070, India will achieve the target of Net Zero. These panchamrits will be an unprecedented contribution of India to climate action.”
Though the government has been taking steps to make it an important part of India’s energy basket, the latest being a move to mandatorily push for biomass co-firing in the thermal power plants as a means to reduce carbon dioxide emissions from fossil fuel, concerns remain on how successful this effort will be.
It will be successful only if it finds full acceptance among the stakeholders, particularly power generation companies and distributors. Since it is a policy and not a regulation, making it mandatory may not mean much. Also there are questions over its cost and quantity and quality. Procurement as well as right price and quality may prove to be the most critical aspect.
Also while State power generation companies will be able to manage the increase in cost due to biomass pellet co-firing by claiming Under Change in Law provisions, clarity on regulatory mechanism of pass through for open capacity was also needed, industry observers feel.
Supply chain needed
Therefore, there is a need to establish proper supply chain and ensure adequacy of stock to achieve the 5 per cent requirement, which increases to seven per cent from the second year. There is the issue of additional cash flow burden on independent power producers (IPPs) due to this transition, especially as the IPPs are already in stress due to distribution utilities defaulting on payments.
Recently, the Union Power Ministry reviewed the status of biomass utilisation in thermal power plants. The revised Policy on Biomass utilisation for power generation through co-firing in coal based power plants was issued on October 8. This policy was revised as the earlier policy was an advisory issued by Ministry without any mandatory use of biomass.
The Power Ministry on November 17, 2017, had issued policy on biomass utilisation for power generation through co-firing in coal based power plants. In the earlier policy, it had advised coal based thermal power plants, except those having ball and tube mill, of power generation utilities, to endeavour to use 5-10 per cent blend of biomass pellets made, primarily, of agro residue along with coal after assessing the technical feasibility and safety aspect.
In order to further support the energy transition in the country and to achieve the target of cleaner energy sources, a modified policy was issued on October 8, 2021. This policy is expected to provide the necessary direction in achieving the goals.
The salient points of the “Revised Policy for Biomass Utilization for Power Generation through Co-firing in Coal based Power Plants” were:
(i) Mandating all thermal power plants to use 5 per cent blend of biomass pellets made, primarily, of agro residue along with coal with effect from one year of the date of issue of this guideline. This will increase to 7 per cent (except for those having Ball & Tube mill the use of biomass remain 5 per cent) with effect from two years after the date of issue of this order and thereafter.
(ii) Minimum contract period for procurement of biomass pellets by generating utilities shall be for seven years so as to avoid delay in awarding contracts by generating companies every year and also to build up long-term supply chain.
(iii) Provisions related to tariff determination and scheduling:
(a) For projects set up under Section 62 of the Electricity Act 2003, the increase in cost due to co-firing of biomass pellets shall be pass through in Energy Charge Rate (ECR).
(b) For projects set up under Section 63 of the Electricity Act 2003, the increase in ECR due to biomass co-firing can be claimed under Change in Law provisions.
(c) Such additional impact on ECR shall not be considered in deciding Merit Order Despatch (MOD) of the power plant.
(d) Obligated Entities such as Discoms can meet their Renewable Purchase Obligations (RPO) by buying such generation of co-firing.
Combatting stubble burning
In fact, the Power Ministry has already set-up the National Mission on use of Biomass in coal based thermal power plants, to address the issue of air pollution due to farm stubble burning and to reduce carbon footprints of thermal power generation. The Mission is taking steps to encourage and support the biomass co-firing in the thermal power plants.
According to the government, as a result of these efforts, around 1,400 tonne of biomass has been fired in October and 53,000 tonne of biomass was utilised as green fuel in power plants so far. The Ministry’s National Mission is expected to curtail air pollution in North West India as well as prevent loss of fertility of agriculture land and provide a sustainable income source for farmers, suppliers and biomass fuel manufacturers.
The current availability of biomass in India is estimated at 750 million tonne annually. The estimated surplus biomass availability is at about 230 million tonne annually covering agricultural residues.
Despite these efforts concerns remain as electricity is de-licensed and the Union Power Ministry without backing of any Act may not have the necessary wherewithal to enforce mandatory use of biomass. According to industry observers, only the Central Pollution Control Board or the Bureau of Energy Efficiency have power/supporting acts which could enable them to put a mandatory condition.
The buzz is that the Power Ministry is planning to a mandatory condition in Energy Conservation Act amendment. Also the Ministry will need to issue a model agreement for procurement of biomass and create a procurement portal. Till all the issues are resolved, the fear is that this effort also may end up being just another initiative of the government.
Meeting green targets through biomass
3. Indian market's potential for global exporters of Biomass:
Viewpoint: India's 2022 biomass use to rise
By Ajay Modi and Deborah Sun
26/12/2021 | 11:47 pm
Various types of biomass pellets prepared from various types of agricultural wastes. Representational Image.
Indian biomass demand is expected to increase in 2022 amid a policy for utilities to burn more wood pellets and reduce coal consumption, though the increase is unlikely to have any impact on the seaborne market.
India is aiming to reduce its reliance on fossil fuels in its journey to reach net-zero emissions by 2070. It has accordingly mandated utilities to co-fire biomass with coal. This will raise demand for biomass in the coming years but ample domestic supplies mean that consumers are unlikely to turn to the seaborne market, at least in the foreseeable future.
Indian utilities must co-fire at least 5% biomass pellets within the next one year, according to a recent policy by the country's federal power ministry, aimed at reducing coal consumption and curbing pollution. Co-firing should be raised to 7% from October 2023 for two categories of power plants, namely those with a bowl mill or with a ball and race mill.
The policy for co-firing will be valid for 25 years or until the useful life of a power plant, whichever is earlier, the ministry said. The biomass pellets must be primarily made up of agricultural residue and the policy encourages local sourcing.
State-controlled utility NTPC's Dadri was the first Indian power plant to co-fire biomass with coal after trials that used 10% biomass in the overall fuel mix. Dadri provides power for the national capital region (NCR), which includes Delhi and its surrounding districts, and has a coal-fired generation capacity of 1,820 MW and gas-fired capacity of 817 MW.
NTPC has further placed an order for 930,000 tonnes of biomass pellets that will lift its co-firing in 2022 and beyond. The largest Indian utility is also executing a tender to procure another 2 million tonnes of biomass, which will enable the firm to co-fire 5 million tonne per year of pellets at its 17 power plants.
Outside the power sector, there are other industries looking to consume biomass to meet their individual goals on emissions. Indian cement makers are aiming to turn their operations carbon neutral well before the country's target of 2070.
Key cement maker Dalmia Bharat has set a target to be carbon negative by 2040, and for a complete replacement of fossil fuels with biomass and alternative energy sources by 2035. India's largest cement maker UltraTech aims to cut emissions by 25pc by 2030 and produce carbon-neutral products by 2050. The company aims to meet 100% of its electricity requirement through renewable sources by 2050.
UltraTech in October signed an agreement with a domestic biomass aggregator to partly replace coal and petroleum coke in its cement kilns. The aggregator, Punjab Renewable Energy Systems (PRESPL) also subsequently signed an agreement with JK Cement to help the firm expand use of biomass and alternative fuels towards replacing fossil fuels.
FMCG and pharmaceutical companies are also eyeing biomass as a replacement fuel. Hindustan Unilever, the Indian subsidiary of FMGC major Unilever, has eliminated coal usage across its operations, replacing it with green alternatives such as biomass and biodiesel as a part of its broader plans to achieve zero emissions in operations by 2030, the company said recently. All its coal-fired boilers have been modified to use biomass and other renewable fuels.
Ample domestic supplies
India is estimated to be using less than 5 million tonne per year of biomass, although potential availability is much higher at 500 million tonne per year, Rohit Dev, chief operating officer at PRESPL told
Argus. "We have a mid-term window of opportunity to export biomass pellets until local consumption takes off in a big way," said Dev. At the same time, India could import wood chips from the US and Canada to serve coastal consumers and bridge the gap between domestic supply and demand to scale up biomass use even faster, he added.
PepsiCo India, the Indian subsidiary of the American beverage firm, is using 100pc biomass in its boilers, said Dev. Significant demand for biomass is coming from such industrial boilers. Besides this, state-controlled refiner IOC is setting up biomass-based compressed bio-gas plants to produce transportation fuels, and is expected to support demand in 2022.
Two issues need to be addressed to support small-scale units that want to get into biomass briquettes or pellets, said another market participant. "You need to develop storage infrastructure and facilitate the granting of hassle-free bank financing for biomass projects," he added.
Asian traders of wood pellets and palm kernel shells (PKS) outside of India remain highly skeptical of seaborne demand growth under the new mandate. Traders have previously received enquiries from Indian buyers before the announcement of the new mandate, but discussions ended without any deals being concluded as seaborne biomass prices did not make economic sense at that point.
But even with the new mandate pushing utilities toward biomass, the majority of wood pellet and PKS traders are not optimistic about the growth of seaborne biomass demand in India. The country usually relies on domestic material and only buys when seaborne prices are relatively low. Moreover, the focus on domestic sourcing is providing utilities with little incentive to seek seaborne cargoes.
Viewpoint: India's 2022 biomass use to rise
4. The current market condition of Biomass in India:
The Ministry of Power (MoP) has decided in May 2021 to set up a National Mission on Biomass Use in Coal-fired Thermal Power Plants. They plan to take the co-firing blend ratio of biomass in our thermal power plants from the current ~5% to 10% over the next 5 years. More details about the program here:
Ministry of Power to Set Up National Mission on Biomass Use in Coal-Fired Thermal Plants
With the launch of this program NTPC, India's largest electric company, has started ordering huge quantities of biomass pellets.
NTPC placed an order for 865,000 tonnes of biomass pellets, for which supply is already in progress. Further, NTPC has placed an additional order of 65,000 tonnes in October 2021. Another tranche of procurement by NTPC for 2,500,000 tonnes is in progress, for which the vendors are invited to submit the offer by November 1. In November NTPC ordered an additional 930,000 tonnes.
The states of Haryana, Punjab and Uttar Pradesh are procuring 1,301,000 tonnes of biomass pellets for co-firing in their state owned power plants.
Source:
NTPC places order for 9.3 lakh tonne biomass pellets - ET EnergyWorld
At this rate it won't take us 5 years to reach 10% blend ratio.
