Cement, Energy & Environment

CPI and one of the authors of the report. CPI is an advisory organization. By March 2012, when the first compliance period ended, only 12.5 per cent (2, 513 MW) of the estimated installed RE capacity was accredited, he added. In 2008, India's National Action Policy on Climate Change had set a target, called the Renewable Purchase Obligation (RPO), to produce 15 per cent of the country's electricity with RE sources by 2020. To help reach these, the government had launched the market-based REC mechanism in 2010. Under the scheme, state uti lities are required to purchase a part of their electricity needs from renewable sources such as wind, solar, biomass, biofuel and small hydro sectors, and supply to the grid. If they cannot purchase it from states, they can meet their obligations by buying certificates from the lEX or the Power Exchange India. The study highlighted that the financial condition of State Electricity Boards (SEB), the major buyer of RECs, is often poor and affects trading. Aggregate SEB losses in 2009-10 were $12.7 billion and projected to reach $ 23.2 bn by 2014-15 from the current levels. "The financial conditions of the SEBs raise questions about their ability to meet RPO targets, participate in REC markets, and promote renewable energy development," said Nelson. Besides, the absence of long-term RPO targets at the state level undermines credible price signals to investors. The targets set by states are not representative of the national RE development goals. Of the 26 states with RPO targets in place, only 10 have specified quota obligations for more than three years. Courtesy: The Business Standard New Delhi, 06.12. 2012. Biomass segment witnesses slow growth The estimated biomass resource potential of the country stands at about 18,000 MW. However, so far, only 3,300 MW or less than one-fifth of the total potential has been commercially developed. The capacity addition has been slow largely due to the risks related to fuel availability. Only 498 MW of biomass- and bagasse-based capacity was added in 201 1-12 with the segment's share in the total installed renewable energy capacity declining from 13.34 per cent as of March 201 1 to 12.8 per cent in August 2012. However, off-grid applications such as biogas- and biomass-based power generation systems are being actively deployed at the central and state levels to meet the electricity requirements of villages and microenterprises. The biggest challenge faced by the segment currently is the increase in the raw material prices of biomass. In the absence of an organized market for biomass, companies cannot accurately forecast price movements. Also, though fuel costs have nearly doubled in the last couple of years, the feed-in tariffs have not been revised . Another challenge pertains to fuel storage since the harvesting season does not always match with the demand season. Going forward, the government plans to add over 2,100 MW of biomass capacity in the Twelfth Plan period and another 2,000 MW in the Thirteenth Plan. The launch of the National Bio-energy Mission, which aims to harness bioenergy sources, is expected to be a major policy enabler and help the segment achieve its growth targets. In India, bioenergy has been commercially utilized in four major areas power generation, biogas, cogeneration and biofuels. Power generation As of August 2012, the installed capacity of biomass-based plants stood at 1,209.6 MW (excluding cogeneration using bagasse), representing a 5 per cent share of the total grid– connected renewable energy capacity in the country. During 2011-12, this segment witnessed a capacity addition of 153 MW. Materials that are mostly used for power generation include rice husk, cotton stalk, mustard stalk, wood chips and poultry litter. The segment has not witnessed any major technological innovations in the recent past with low-end pressure boilers and small generators being used, which have poor efficiency and no means to deal with residues. While states like Uttar Pradesh, Tamil Nadu and Maharashtra account for more than half the installed capacity in the segment, other states with a large agricultural base are also actively promoting biomass capacities. For instance, the Madhya Pradesh government plans to expedite the commissioning of 200 MW of biomass power projects in the state by March 2013. These projects are being set up under the state's Biomass-based Power Project 20 I