India uses about 720 million tons of coal in its power plants every year. A 5% blending with biomass would imply about 35 million tons of biomass needs to be utilized. The government of India shared the progress of its biomass cofiring initiative in Jaunuary 2022. Until then, only about 60,000 tons of biomass has been co-fired in thermal power plants, almost all of it by NTPC.
While the government informed that tenders for over 12 million tonnes are at different stages of process for short-term and long-term duration, these are fairly vague statements.
Between its original order in Oct 2021 and Jan 2022 (an approx three month period), about 60,000 tons of biomass has been cofired. Extending it over a year, about 240,000 tons, a quarter million approximately, as against a total target of about 35 million tons if the cofiring target had to be met nationwide. This is less than 1% of the total target.
These are however very early days, and thus the estimates at this stage can be quite deceiving.
While it might take a while for the country to achieve the 5% target, the business opportunity it provides for the biomass pellet industry is tremendous. Even with conservative estimates for the prices of biomass pellets, this could be a business worth over Rs 20,000 crores annually should the country start inching towards the 5% cofiring target.
