The renewable energy industry has emerged as a crucial player in the transition toward sustainable and clean energy solutions. As nations worldwide push for decarbonization and the reduction of fossil fuel dependency, renewable energy technologies, including solar power, biomass utilization, waste management, and pollution control, are gaining momentum as eco-friendly alternatives. These resources are being harnessed through various technologies such as solar panels, wind turbines, biomass systems, and waste-to-energy solutions, offering a cleaner, more sustainable approach to energy production.
India has set ambitious renewable energy goals, aiming to source 50% of its energy needs from clean and renewable sources by 2030. This is a vital part of the country’s commitment to reducing its carbon emissions and increasing its reliance on domestic, eco-friendly energy solutions.
India currently has an installed power generation capacity of 465 GW, of which approximately 216 GW is sourced from coal-based thermal power plants. These plants have traditionally been the backbone of India's energy infrastructure, but the country is now seeking cleaner alternatives to reduce the environmental impact.
Biomass pellets are increasingly seen as a crucial solution to lower the carbon footprint of India's coal-based power generation. To meet the government’s biomass co-firing targets, significant quantities of biomass pellets are required:
For a 7% blending of biomass in a 1000 MW thermal power plant, around 2.5 to 3.0 lakh tonnes of biomass pellets are needed.
India’s coal-based electricity production uses approximately 980 million tonnes of coal annually (2022-23).
To meet a 5% co-firing target, India will need about 50 million tonnes of biomass pellets annually for its thermal power plants (TPPs) across the country.
India generates around 750 MMT (million metric tonnes) of biomass annually, with a surplus of 230 MMT available for energy production.
The adoption of biomass pellets in thermal power plants has been rising steadily.
As of December 2023, 161,873 MT of pellets have been co-fired in TPPs, compared to 50,091 MT used in FY 2022-23.
By March 2024, the cumulative biomass co-fired capacity is expected to reach 477,000 MT.
Out of 269 thermal power stations in India, 50 have successfully implemented the co-firing policy, blending pellets with coal.
The market potential for agro-residue-based biomass pellets in India is substantial, with the biomass pellet sector estimated to be a ₹40,000 crore industry. This represents a significant opportunity for growth, especially as India works to reduce coal imports and enhance its energy security.
To further accelerate the use of biomass pellets, the government has introduced several policies and incentives:
Co-firing Mandate: This policy requires thermal power plants to co-fire 5-7% biomass pellets with coal.
CPCB EPC Fund: Offers up to ₹1.4 crore for torrefied pellet plants.
MNRE Bioenergy Schemes: Provides ₹9 lakh per MTPH production capacity or up to ₹45 lakh per plant.
Priority Sector Lending (PSL): Biomass pellet manufacturing qualifies for easier financing under the RBI’s PSL category, making it more accessible to entrepreneurs and investors.
India has committed to achieving net-zero emissions by 2070 and sourcing 50% of its energy capacity from renewable sources by 2030. Biomass energy is expected to play a key role in meeting these targets, providing a sustainable alternative to coal while also reducing carbon emissions.
India currently imports about 20-25% of its coal, making biomass an attractive domestic alternative. By increasing the use of biomass, India can reduce its reliance on imported coal, thereby decreasing foreign exchange outflows and bolstering energy security.
In addition to power generation, industries such as cement and steel are increasingly adopting biomass pellets to reduce their carbon emissions. The demand for torrefied biomass pellets is rising in these sectors, as they align with carbon reduction strategies and sustainability goals.
India's biomass energy sector is attracting growing interest from global green energy companies and investors. Collaborative partnerships in technology, logistics, and financing are expected to accelerate the development and growth of the industry, positioning India as a major player in the global renewable energy market.
Biomass pellet production provides an effective solution for agricultural waste management. By converting crop residues into energy, biomass pellet production reduces the practice of stubble burning, which is a significant source of air pollution in India. This contributes to improved air quality and helps the government address pollution concerns.
Increasingly, businesses are aligning their operations with ESG (Environmental, Social, and Governance) goals. This is driving a push toward sustainable practices such as recycling and waste-to-energy solutions, promoting a circular economy and reducing environmental impact.
Innovations in biomass pellet manufacturing technology, such as improved waste collection mechanisms and better paper recycling processes, are enhancing production efficiency. These advancements help to increase recovery rates, improve pellet quality, and further support the growth of the biomass energy market.
The use of biomass pellets offers substantial cost savings over conventional fuels:
Coal Pellets: Significant savings, with some users seeing up to 77.13% savings compared to other fuels like wood.
