MoEF&CC's Revised Guidelines Stall Progress in Biomass Co-firing within Coal-Based Thermal Power Plants

The Union Ministry of Environment, Forest and Climate Change (MoEF&CC) has introduced a notable development in the progress of biomass co-firing in coal-based thermal power plants (TPPs). This shift is elucidated by a February 2023 notification, which relaxes the timelines and requirements for power plants to incorporate agricultural residues into their energy generation processes.

To provide context, the use of agricultural residues, particularly in the form of biomass pellets, was mandated by the Commission for Air Quality Management in National Capital Region and Adjoining Areas and the Union Ministry of Power (MoP) in September and October 2021, respectively. These directives aimed to address the issue of air pollution caused by the burning of farm stubble in the Delhi-NCR region while also creating a market for surplus agricultural residue.

The concept behind biomass co-firing is to blend these biomass pellets with coal in thermal power plant boilers to produce electricity. However, the recent MoEF&CC draft notification, issued on February 16, 2023, revises the original mandate. It specifies that power plants under the jurisdiction of the Commission for Air Quality Management (CAQM) should replace only 5% of their coal consumption with agricultural residue for electricity generation. Moreover, the notification introduces penalties for non-compliance.
Importantly, this notification extends the deadlines for compliance by two years and restricts the co-firing requirement to power plants located within a 300-kilometer radius of Delhi-NCR. This adjustment raises questions about the efficacy and impact of the original directives, given the substantial delay and reduced targets.

A study conducted by the Centre for Science and Environment (CSE) sheds light on the current status of biomass co-firing in 11 coal-based thermal power plants in Delhi-NCR. The study revealed that these power plants have made minimal progress in adhering to the CAQM orders. Cumulatively, less than 1% of the coal consumption has been replaced with agricultural residue in these plants through December 2022. Power plants in the region tend to attribute their challenges in continuous co-firing to weak supply chain management for agricultural residue.

The study also highlighted issues with tenders for the procurement of biomass pellets. Government records indicate that a significant portion of the tenders placed for 12 million tonnes of biomass pellets through December 2022 remains unawarded. Furthermore, some power plants did not issue tenders, and those that did often fell short of the quantity required for the mandated 5% coal replacement.
One of the root causes of the supply-demand gap is the limited capacity of pellet manufacturers in Delhi-NCR, which stands at approximately 2,500 tonnes per day. This falls significantly short of the demand, causing delays and inefficiencies in the procurement process. Additionally, vendors of biomass pellets find selling to other industries more financially attractive and less complicated, further exacerbating the situation.

Ambiguity in regulations also plays a role in hindering progress. State Electricity Regulatory Commissions (SERC) have only recently clarified their position on passing through the increased cost of compliance with biomass co-firing mandates. Some power plants attempted to seek exemptions from these regulations, but these appeals were largely rejected.

The CSE study questions the rationale behind limiting co-firing to 5%, as there seems to be no scientific justification for this percentage in the MoEF&CC notification. This shift raises concerns that the momentum for biomass co-firing may be further diluted, similar to what has happened with emission norms for power plants, which have seen multiple deadline extensions.

In summary, the MoEF&CC's recent notification has introduced significant changes to the biomass co-firing requirements in coal-based thermal power plants, extending deadlines and reducing targets. This development raises questions about the effectiveness of the original directives and highlights ongoing challenges related to supply chain management, tenders, and regulatory ambiguities in implementing biomass co-firing in the Delhi-NCR region.