MERC_[Case No. 104 of 2010] Page 1 of 23
Before the
MAHARASHTRA ELECTRICITY REGULATORY COMMISSION
World Trade Centre, Centre No.1, 13th
Floor, Cuffe Parade, Mumbai 400005.
Tel. 022 - 22163964/65/69 Fax 022 - 22163976
Email: [email protected]
Website: www.mercindia.org.in / www.merc.gov.in
Case No. 104 of 2010
In the matter of
Petition filed by M/s. Ankur Scientific Energy Technologies Pvt. Ltd. for
determination of Tariff for procurement of power by distribution licensees from
Biomass based power generating company in the State of Maharashtra using
Gasification route (Otto-Cycle) and exemption from the zoning / overlapping
policy for power plants of up to 2-MWe size.
Shri. V.P. Raja, Chairman
Shri. Vijay L. Sonavane, Member
M/s.Ankur Scientific Energy Technologies Pvt. Ltd. .….Petitioner
Address: Ankur, Near Navrachana School, Sama,
Vadodara – 390 024 (Gujarat).
Maharashtra Energy Development Agency …..Respondent
Address: 2nd
Floor, MHADA Commercial Complex,
Opp. Tridal Nagar,
Yerwada, Pune 411006.
MERC_[Case No. 104 of 2010] Page 2 of 23
Present during the hearing:
For the Petitioner: Shri. Ankur Jain, Executive Director
Shri. Ashok Chaudhuri, General Manager
For the Respondent
(MEDA):
Shri. S. A. Patil, General Manager
Shri. Paresh Bodhe, Project Officer.
ORDER
Date: 27 December, 2012
M/s. Ankur Scientific Energy Technologies Pvt. Ltd. (hereinafter referred to as
‘the Petitioner’) filed a Petition on affidavit under Regulation 7 (7.1) of MERC (Terms
and Conditions for Determination of RE Tariff) Regulations, 2010, before the
Commission on 16 December 2010 (removed deficiency on 28 December, 2010) for
determination of Tariff for procurement of power by distribution licensees from biomass
based power generating company in the State of Maharashtra using gasification route
(Otto-Cycle) and exemption from the zoning / overlapping policy for power plants of up
to 2-MWe size.
2. The prayers of the Petitioner are as follows:
“
a. Determination of the Tariff for Biomass Gasifier Power Plants rated up to
2MW (net feed into the grid) at INR 6.50 per kWh.
b. Approval to the petitioner for setting up the Power Plants at their two sites.
c. Exemption from the zoning policy of Biomass Gasifier based Power
Plants rated up to 2- MWe (net feed into the grid).”
MERC_[Case No. 104 of 2010] Page 3 of 23
3. The Petitioner in its Petition submitted as follows;
3.1 The Commission vide Order dated 14 December, 2009 in Case No. 83 of 2008 has
fixed the Tariff of Rs. 4.98/kWh for biomass power projects based on Rankine cycle
technology. However, there is no Tariff fixed by the Commission for biomass power
projects based on gasification (Otto cycle) route. Further, Regulation 7 (7.1) of MERC
(Terms and Conditions for Determination of RE Tariff) Regulations, 2010 provide the
norms for determination of project specific Tariff on case to case basis. The Petitioner,
inter alia, is praying for a suitable Tariff for their projects based on gasification (Otto-
cycle) technology and wishes to justify the request for a higher Tariff as compared to the
Commission’s determined Tariff for biomass power project based on Rankine Cycle
technology.
3.2 The Petitioner submitted that, while determining the Tariff for the biomass based
power project, it is essential to consider the financial and operational parameters, as
follows;
3.2.1 Capital cost including Evacuation Cost:
It is essential to consider the capital cost while determining the Tariff for biomass
power projects based on gasification route (Otto cycle). The capital cost of the
biomass gasifier based power plants compromises the cost of;
i)The gasifier and its accessories ii) 100% producer gas based engine generator set,
iii) transformer and associated equipments, iv) land and its development including
the civil constructions, v) processing fees of the nodal agency, vi) erection and
commissioning charges, vii) pre-operative expenses and other assets. The above
components are grouped and the entire gross capital project cost would be around
Rs. 6.50 crores/MW including the cost of project switch yard and
interconnection facilities at the site up to the point of energy metering. It does not
include the cost of the transmission lines and associated facilities beyond the point
of energy metering at the project switch yard for the evacuation. Even after
considering the Central Financial Assistance (CFA) from MNRE of Rs. 1.50
crore/MW, net project cost will be Rs. 5 crore/MW.
MERC_[Case No. 104 of 2010] Page 4 of 23
3.2.2 Tenure of Loan:
The Petitioner has considered the tenure of loan as 10 years which is in line with
MERC (Terms and Conditions for Determination of RE Tariff) Regulations, 2010.
3.2.3 Interest on Loan:
The Petitioner has considered interest rate at 13.79% per annum.
3.2.4 Return on Equity:
The Petitioner has considered the rate of return on equity at 19% per annum for the
initial 10 years and thereafter at 24% for the subsequent 10 years.
3.2.5 Life of the Plant and Machinery and Agreement Period:
Life of the plant, machinery and the agreement period is considered as 20 years.
3.2.6 Depreciation:
Depreciation is apportioned for 20 years with 10% residual value.
3.2.7 Debt-Equity Ratio:
The Petitioner has considered the debt-equity ratio of 70:30 for the capital
investment.
3.2.8 Operation and Maintenance Expenses:
The Petitioner has considered the O&M cost including insurance cost at the rate of
9.5% of the gross project cost for the first year. Gasifier maintenance cost at 1.5%
of the project cost, 6% for the engine and 2% for the manpower. Escalation at the
rate of 5.72% on operation and maintenance year on year has been considered.
3.2.9 Interest on Working Capital:
The fuel storage requirement depends on the factors such as types of fuel and their
availability on a continuous basis round the year, the availability of storage
facilities, procurement arrangements and the price during the season / off-season
etc. Apart from the fact that the agriculture and the forest residues are seasonal and
would require storage for longer period. Therefore, the Petitioner has considered
MERC_[Case No. 104 of 2010] Page 5 of 23
the following items as components of working capital for the purpose of interest on
working capital at the rate of 12%.
a) Fuel stock of 120 days.
b) O&M expenses for one month plus stores and spares @ 15% of annual
O&M cost.
c) Receivables equivalent to one month charges for sale of electricity.
3.2.10 Plant Load Factor:
The Petitioner has considered the plant load factor as 75% so as to stabilize and
operate the plant at optimum level from first year.
3.2.11 Auxiliary Energy Consumption:
The auxiliary consumption for the plant is 12% of the gross energy generation.
3.2.12 Station Heat Rate (SHR):
The Petitioner has considered SHR as 3722 kcal/kWh and thus the biomass
consumption per unit of generation will be 1.05 kg.
3.2.13 Fuel Related Assumptions:
i) Fuel mix and types:
The Petitioner intends to use the different kinds of biomass as per seasonal
availability, mainly agricultural residues and wastes such as cotton stalks, soya
stalks, pulses stalks, chilly stalks, corn cobs and if required other woody biomass
wastes like Prosopis Juliflora’s fallen branches, twigs and firewood wastes from
private land / forest owners or saw mill suppliers. The Petitioner further submitted
that the coal cannot be used as a fuel for gasification technology.
ii) Gross Calorific Value (GCV):
The Petitioner states that, the various types of biomass have the different types of
calorific values and their availability also varies from season to season. Hence the
Petitioner has considered the weighted average calorific value of the available
MERC_[Case No. 104 of 2010] Page 6 of 23
biomass fuel sources to be around 3461 kcal/kg and the expected consumption of
1.05kg/kWh.
iii) Price of the Fuel:
The price of the fuel with 35% moisture content is assumed at Rs. 2000 per tonne.
Therefore, the cost with the 20% moisture content would be around Rs. 2353 per
tonne. Further the sizing and the storage cost including losses would be Rs. 400 per
tonne. Thus, the total cost would be Rs. 2753 per tonne. The price of the fuel has
been taken to be Rs. 2,800 per MT (rounded off) with an escalation of 5% per
annum.
3.2.14 Tariff:
Based on the above parameters, the Petitioner arrived at a levellised Tariff of
Rs.6.50/kWh.
3.2.15 Exemption from Zoning:
The Petitioner submitted that, a zoning policy exists in Maharashtra state i.e.
biomass collection area for a biomass project should not be overlapped with
biomass collection area of other biomass projects. Furthermore, the small
gasification based projects of 1-2 MWe capacity should be exempted from such
zoning policy in light of the relatively smaller and manageable biomass
requirements. The Petitioner thus requests the Commission to exempt Biomass
gasification based projects of around 2 MWe levels from the zoning policy with
freedom to locate such projects as per the assessments of the individual investors.
3.2.16 Advantages of the 2 MWe Biomass Gasification Power Plants:
i) The technology is reliable and user friendly with very high PLF’s of 75%.
ii) Gasification converts low quality fuel into use of the high quality fuel which is
convenient and combustible gaseous fuel.
iii) There are no any harmful effluents from gasifier, so it also reduces the threat
of global warming.
iv) Energy security through optimal utilization of locally available biomass
resources.
MERC_[Case No. 104 of 2010] Page 7 of 23
v) Tail end generation will provide grid stability, stable voltage and reduce the
need for enhancing the capacity of T&D networks to meet growing electricity
consumption needs.
vi) More equitable distribution of economic development and creation of large
scale employment for unemployed / partially employed rural people.
4. Based on the above Petitioner’s submission, the Commission vide notice dated 28
January, 2011 fixed the First Technical Validation Session (TVS) on 15 February 2011 in
the office of the Commission.
5. First Technical Validation Session (TVS):
5.1 The first TVS in this matter was held on 15 February 2011. Shri.Ankur Jain,
Executive Director & Shri. Ashok Chaudhuri, General Manager were present on
behalf of the Petitioner. They made a power point presentation before the
Commission during TVS, which covered the various aspects such as proposed
technology concepts, details of two proposed sites, capital cost of the project and
proposed Tariff etc.
5.2 Further, during TVS the Petitioner submitted amended Petition to the
Commission with the following prayers;
“In facts and circumstances stated here in above, it is, therefore, evident
that Biomass Gasifier based on Otto-cycle deserves a higher electricity
Tariff than Rankine cycle based technology, therefore it is most
respectfully prayed that this Hon’ble Commission may be pleased to pass
an order for;
1. Determination of the Tariff for Biomass Gasifier Power Plants rated
upto2-MWe (net feed-into the grid).
2. Approval to the Petitioner for setting up the power plant for their two
sites.
3. Exemption from the zoning policy of the Biomass Gasifier based
Power Plants rated upto 2-MWe (net feed-into the grid).”
5.3 Shri. P.V.Tayde, Manager & Shri. Paresh Bodhe, Project Officer, were present
on behalf of MEDA submitted their views as follows;
MERC_[Case No. 104 of 2010] Page 8 of 23
i. The Petitioner has quoted the project cost as Rs 6.5 crore / MW inclusive
of evacuation cost, which after the internalization with the central
subsidy, arrives at Rs.5 crore / MW, close to the per MW cost of the
Rankine cycle (Combustion Route) biomass based power projects.
ii. The generic Tariff declared for the combustion route Biomass power
project is Rs.4.98 / kWh. It is felt that same Tariff may be adopted in this
case also.
iii. MEDA has complied with the Commission’s Order dated 8 August,
2005 and not allotted any site to biomass power project that is falling in
the collection area of the other big size biomass power project.
iv. In this case the Petitioner has asked for two proposed sites located in Tal.
Bhivapur, Dist. Nagpur & Tal. Kalam, Dist. Yavatmal. Both the sites are
falling under the collection areas of already commissioned biomass
power projects (combustion route).
v. In order to avoid over-lapping in collection areas, MEDA can encourage
small size (upto 2MWe) biomass power projects using either Otto-cycle
or Rankine technology for vacant Talukas (121 Nos.) by way of calling
Expression of Interest (EOI) from interested parties.
5.4 The Commission observed that there is a need for in-depth study on zoning
procedure. Further, the Commission directed the Petitioner to explore the possibility
of taking up Research & Development (R&D) help from nearby Agricultural
University i.e. Punjabrao Krushi Vidhyapeeth, Akola.
6. Second Technical Validation Session (TVS):
6.1 The second TVS in this matter was held on 11 March, 2011. Shri.Ankur Jain,
Executive Director & Shri. Ashok Chaudhuri, General Manager was present on behalf
of the Petitioner. They made a power point presentation before the Commission during
TVS which covered the various aspects such as field survey; details of biomass
assessment report for proposed sites, crop production statistics and district wise
biomass based power plants etc.
MERC_[Case No. 104 of 2010] Page 9 of 23
6.2 Shri. S. A. Patil, GM and Shri.Paresh Bodhe, Project Officer were present on
behalf of MEDA and submitted their view’s as follows;
i) MEDA would like to assess the comprehensive quantity of biomass available at
the Petitioner’s proposed sites. Further, MEDA requested the Commission for
two months time to submit their findings.
ii) The generic Tariff declared for the combustion route biomass power project is
Rs.4.98 / kWh. It is felt that same Tariff may be adopted in this case also.
iii) MEDA has complied with the Commission’s Order dated 8 August, 2005 and
not allotted any site to biomass power project that is falling in the collection area
of the other big size biomass power project. Both the Petitioner’s two proposed
sites located in Tal. Bhivapur, Dist. Nagpur and Tal. Kalamb, Dist. Yavatmal,
fall under the collection areas of other biomass power projects.
iv) In this case, the surplus biomass is not available in their proposed sites; the
Petitioner may consider opting for alternate sites.
6.3 After hearing the parties, the Commission is of the view that, MEDA has to give
the data in support of the claim of the Petitioner to take a decision. MEDA being the
State Nodal Agency for Renewable Energy Sources in the State of Maharashtra and
keeping in view of zoning policy, the Commission directed MEDA to submit the
quantum of biomass available at the two proposed sites of the Petitioner and host the
vacant Talukas and Zones available with necessary biomass data at their website to
facilitate the developers for further setting up of biomass plant in the state of
Maharashtra.
7. In line with the above directives of the Commission, MEDA vide its letter
dated 28 March 2011 submitted its comments as follows;
7.1 As per MERC Order dated 8 August 2005, MEDA has allotted the biomass
collection area to various independent biomass power projects in the State. This
approach has been helpful in preventing unhealthy competition among the developers
and reducing the risk of the rise in biomass prices.
MERC_[Case No. 104 of 2010] Page 10 of 23
7.2 MEDA has conducted biomass assessment studies in nearly 40 Talukas. It is to
be noted that, there is a power potential of 2 MW to 2.5 MW in each Talukas. This has
assisted in allotting 4 to 5 Talukas to each project of about 8 to 10 MW capacity.
7.3 MEDA has entered in to MoU with the biomass developers on the condition of
non-overlapping in collection areas. In the light of this, the developer is not supposed
to intrude into the biomass collection area of other / adjacent biomass power project
holder.
7.4 Availability of the biomass being seasonal, it is felt that the sustainability of the
projects may be evaluated preferably assuming that 50 % of the total available biomass
will be available for the project and accordingly the project capacity can be decided, it
will avoid unhealthy competition and risk of rise of prices of biomass.
7.5 The biomass availability data produced by the Petitioner is based on the total
biomass generated while the consumption part has not been considered. Therefore the
data submitted is incomplete and cannot be accepted. It is necessary to assess the
surplus availability of biomass in the region by undertaking the field study.
7.6 The biomass linkage shown by the Petitioner by furnishing the supply
agreements executed with the farmers may not prove to be sufficient to cater the needs
of fuel up to the life of the project.
7.7 In addition to the above, the biomass developer may be asked to seek No
Objection Certificate (NoC) from the biomass developers who are already allotted with
the collection areas for the establishment of the new project. If the same is not possible
then the developers can be asked to setup a new project in the Talukas that are vacant
in the State.
7.8 If the gasifier based (Otto cycle) grid connected biomass power projects are to
be promoted, more demonstration projects of this technology have to be commissioned
in the state. The Commission in its earlier Order dated 30 December 2010 in Case No.
39 of 2010 directed M/s. Forbes and Company to set up 1 MW size biomass power
project based on gasification route in the state and asked to submit the technical and
commercial data to them for determination of Tariff.
MERC_[Case No. 104 of 2010] Page 11 of 23
7.9 In spite of the above, if the developer intends to set up projects in the Talukas
which are already allotted to the other biomass developers, then the developers to
whom the talukas are allotted as collection areas may also be invited for the next
hearing.
8. The Commission vide notice dated 15 March 2011 scheduled the first hearing
in the matter on 6 April 2011 in the office of the Commission.
9. First Hearing:
9.1 The first hearing in this matter was held on 6 April 2011. Shri. Ashok
Chaudhuri appeared on behalf of the Petitioner submitted that the biomass is available
in amply quantities for their proposed biomass power projects. Further, he mentioned
that the biomass assessment report for establishment of 1.5 MW biomass power plant
on gasification technology, duly certified by Divisional Statistician, C/o, Divisional
Joint Director of Agriculture, Nagpur Division and sample data of biomass supply
agreement with the local farmers has also been submitted to the Commission.
9.2 Shri. S. A. Patil, GM, appeared on behalf of MEDA, submitted that the
biomass collection areas as mentioned by the Petitioners have already been allotted to
other biomass developers. Also the biomass availability data produced by the
Petitioners is based on the total biomass generated but the consumption part of it is not
considered. Further, the biomass linkage being shown by the Petitioners by furnishing
fuel supply agreements executed with the farmers may not prove to be sufficient to
cater the needs of fuel up to life of the project. Therefore, it is necessary to assess the
surplus availability of biomass in the region by undertaking field survey, for which he
requested the Commission to allow MEDA for two months time duration to complete
the above task.
9.3 Shri. Prashant Joshi, CEO, M/s. GMT Mining & Power Pvt. Ltd. submitted that
MEDA has allotted Kuhi, Mauda, Umred and Bhiwapur Talukas to its proposed
biomass based power project. In view of this, the biomass collection areas which were
already allotted to them, if the same collection areas are allotted to other biomass
power project developers, then the price of the biomass shall be escalated certainly and
predominantly.
MERC_[Case No. 104 of 2010] Page 12 of 23
9.4 Having heard the parties and considering the paucity of time, the Commission
directed MEDA to submit the necessary information regarding quantum of biomass
available at Petitioner’s two proposed sites, to the Commission by the end of April,
2011 to ascertain the feasibility of the project at proposed sites. The Commission also
directed M/s. GMT Mining & Power Pvt. Ltd. to submit their views through proper
intervening application. Further, the Commission directed that the next hearing shall
be scheduled only after the receipt of necessary data from the MEDA.
10. M/s. GMT Mining and Power Ltd. and M/s. Yash Agro Energy Ltd. submitted
their intervening applications vide their letters dated 2 July, 2011. M/s. GMT Mining
and Power Ltd. submitted its views which are as under;
10.1 In the view of the relief claimed in the present Petition especially with
reference to the plant site at Tal. Bhivapur, Dist. Nagpur is concerned; the
applicant is the company which would be adversely affected by the decision in
the present Petition.
10.2 The intervener company has proposed 10 MW biomass based power (Rankine
cycle) plant in Tal. Kuhi, Dist. Nagpur. MEDA has granted approval in favor
of the intervener company as per the letter dated 3 June 2009. Subsequently,
the following action is already taken by the intervener company towards the
establishment of its 10 MW biomass based power plant in Tal. Kuhi, Dist.
Nagpur.
i) Possession of the 15 acre of land has been taken and compensation has
been paid for the same.
ii) The project has been approved by the MEDA and all statutory
clearances / permissions have been obtained by the intervener.
iii) Total project cost is Rs. 56 crore and orders along with the advance
payments have been placed for the procurement of the turbine, boiler
and cooling tower.
iv) As the power plant of the intervener is biomass based plant, MEDA has
stipulated the catchment area for procurement of Biomass for the
Intervener as under;
MERC_[Case No. 104 of 2010] Page 13 of 23
a) Tal. Kuhi Dist. Nagpur
b) Tal. Bhivapur Dist. Nagpur
c) Taluka Umrer Dist. Nagpur
d) Tal. Mauda Dist. Nagpur
10.3 It is submitted that the Commission was pleased to take into account the fact
that the every biomass based power generation units should have assured a reliable
supply of the biomass for their respective plants. Hence, MEDA was entrusted with the
responsibility of vetting the adequacy of the catchment area and fuel procurement plan
proposed by each project and also to ensure that there should be no overlap. Hence, the
intervener relied upon the Order passed by the Commission in Case No. 37 of 2003
dated 8 August, 2005.
10.4 Similarly, 8 MW biomass based co-generation unit established by M/s. Yash
Agro Energy Ltd, Nagpur is in operation from September 2008 and MEDA has
allotted the following Talukas for procurement of the biomass fuel for the said project;
a) Tal. Bhivapur Dist. Nagpur.
b) Tal. Pauni, Dist. Bhandara.
c) Tal. Chimur, Dist. Chandrapur.
d) Tal. Nagbhid, Dist. Chandrapur.
10.5 Already two units are designated for Tal. Bhivapur namely the unit of M/s.
Yash Agro Energy Ltd. and the unit of M/s. GMT Mining & Power Ltd. The biomass
required for the operation of the units is identical namely rice husk, soyabean stalks,
tur stems and wheat stalks. Therefore, granting the permission to another biomass
project in the same area would be directly in conflict with the directions issued by the
Commission.
10.6 The applicant requested the Commission to grant leave to the applicant to
intervene in the present case as intervener or being impleaded as Respondent No. 2 and
permit the applicant to participate in the present case for opposing the reliefs claimed
by the Petitioners in the view of the facts and circumstances in the interest of justice.
11. M/s. Yash Agro Energy Ltd. vide letter dated 2 July, 2011 submitted the
application for intervention in the present case and submitted its views as follows;
MERC_[Case No. 104 of 2010] Page 14 of 23
11.1 The applicant/intervener company has established 8 MW biomass based
Cogeneration power plant at Kolari, Tal. Chimur, Dist. Chandrapur. MEDA had
granted approval in the favor of Intervener Company and all other statutory
permissions were also obtained. The plant has been established on land admeasuring
10.5 acres at village Kolari, Tal. Chimur, Dist. Chandrapur. The intervener has till date
invested huge amount of Rs. 45 crore for the establishment of the plant.
11.2 MEDA has stipulated the catchment area for the procurement of biomass for
the intervener as under;
a) Taluka Bhivapur, Dist. Nagpur.
b) Taluka Pauni, Dist. Bhandara.
c) Taluka Chimur, Dist. Chandrapur.
d) Taluka Nagbhid, Dist. Chandrapur.
11.3 It is submitted that the Commission was pleased to take into account the fact
that the every biomass based power generation units should be assured a reliable
supply of the biomass for their respective plants. Hence, MEDA was entrusted with the
responsibility to vet the assessment of the adequacy of the catchment area and fuel
procurement plan proposed by each project and also to ensure that there should be no
overlap. Hence the intervener relied upon the Order passed by the Commission in Case
No. 37 of 2003 dated 8 August, 2005.
11.4 The Petitioner is praying that the Tariff of Rs. 6.50 /kWh be determined for its
power. This would have a serious adverse effect on the generation activities of the
applicant as well as other similar units. The applicant would be procuring biomass at
the prevailing market price, yet can afford to supply electricity at the Tariff fixed by
the Commission. The prayer for approval of the higher Tariff of the Petitioner is not
genuine but it is calculated mischief that will affect the viability of the unit of the
intervener as well as the other unit.
11.5 The intervener requested the Commission to grant leave and to intervene in the
present case as intervener or being impleaded as the Respondent No. 2 and permit the
applicant to participate in the present case for opposing the reliefs claimed by the
Petitioners in the view of the facts and circumstances in the interest of justice.
MERC_[Case No. 104 of 2010] Page 15 of 23
12. MEDA vide its letter dated 21 June 2011 sought the extension for the
submission of the field study report and said that the field study for assessing the
surplus biomass availability in Taluka. Bhivapur, Dist. Nagpur and Taluka. Kalamb,
Dist. Yavatmal has been outsourced and the same is likely to be completed by end of
the July 2011. In view of above, the Commission vide notice dated 12 July, 2011
scheduled the next date of hearing in this matter on 26 August, 2011 at 15.00 hrs. in
the Office of the Commission.
13. In line with the Commission’s directives, MEDA vide its letter dated 12
August, 2011 submitted the report on “Biomass Assessment Study” to the Commission
on 18 August, 2011. The following is the abstract of the study report prepared by the
MEDA on the availability of surplus biomass in Taluka. Bhivapur, Dist. Nagpur and
Taluka. Kalamb, Dist. Yavatmal.
BhivapurTaluka:
Particulars (MT/Year) Production Consumption Surplus
Agricultural Crop Residue 120953 75552 45401
Biomass from Forest & Other
lands
32021 7665 24356
Agro-industrial Residue 432 432 0
Grand Total 153406 83649 69757
M/s. GMT Mining and Power Pvt. Ltd. proposed consumption for 10 MW from Tal.
Bhivapur is 36417 MT/Year.
KalambTaluka:
Particulars (MT/Year) Production Consumption Surplus
Agricultural Crop Residue 54361 37136 17225
Biomass from Forest & Other
lands
27879 12638 15241
Agro-industrial Residue 54 54 0
Grand Total 82294 49828 32466
MERC_[Case No. 104 of 2010] Page 16 of 23
M/s. Maharashtra Vidyut Nigam Ltd.(MVNL) proposed consumption from Tal. Kalamb
is 14538 MT/Year.
13.1 After considering the proposed consumption of GMT & MVNL biomass power
plants, remaining available surplus biomass is very less and can be used for only
cushioning purpose as a buffer stock in case of droughts.
13.2 In accordance with the Commission’s Order dated 8 August, 2005 to prevent
unhealthy competition among the biomass power developers and to reduce the risk of
rise in prices of biomass and also to avoid overlapping in collection area, the Petitioner
should take consent from GMT & MVNL biomass power projects developers for their
proposed upcoming plants.
13.3 Also it is suggested that, the Petitioner can set up their power plants, after
obtaining permissions from the forest department for necessary required biomass
collection.
14. Second Hearing:
14.1 The second hearing in this matter was held on 26 August, 2011. Shri. Ashok
Chaudhuri, GM appeared on behalf of the Petitioner. Shri. P. V. Tayde, Manager
appeared on behalf of the Respondent (MEDA). Shri. Prashant Joshi, CEO appeared on
behalf of M/s. GMT Mining and Power Pvt. Ltd. As per the directives of the
Commission, MEDA handed over the biomass assessment report and list of 121 vacant
Talukas to the Petitioner, in the open court.
14.2 During the hearing, the Commission directed the Petitioner to study and submit its
say on biomass assessment report submitted by MEDA, on affidavit. After getting the
Petitioner’s views on report submitted by MEDA, the Commission will take a view in
this matter.
15. In line with the above directives of the Commission, the Petitioner vide its letter
dated 25 January 2012 submitted its views on the biomass assessment study report
which are as under;
a. Biomass consumption on account of the domestic fuel, fodder, thatching,
agro based industry etc. has shown at 83,649 MT/Year but source of this data
MERC_[Case No. 104 of 2010] Page 17 of 23
has not been mentioned. Some estimation has been made so such data of
consumption cannot be relied upon. Any minor assumption in the report can
make significant change in consumption number.
b. Report does not disclose anything about the collection efficiency. The data
regarding 24356 MT/year of surplus availability of biomass has been
indicated from forest and other land while the same figure available after
M/s. GMT’s requirement has been indicated as 16466 MT/Year. This shows
that, M/s. GMT has been allocated about 7890 MT/Year from forest land.
Have MEDA/forest department issued suitable sanction, as this could also
help us to initiate similar sanction procedure.
c. It has been indicated that the per capita consumption of wood and crop
residue per annum is estimated as 90 kg and 40 kg respectively in Tal.
Bhivapur, Dist. Nagpur. The domestic fuel consumption is 3327 MT crop
residue. In this area, the cattle is also sent for grazing and on average the
consumption of fodder is around 7 kg/day per cattle for 280 days, so the
consumption will be around 71848 MT for 36657 livestock. Crop residues
used for fodder are paddy straw, wheat straw, jowar stalks, pulse stalks etc. It
may please be noted that soyabean has not been mentioned. If it is
considered, the cropping area of soyabean as mentioned in the report for
Bhivapur alone is 34,137 hectres with an output of 91,043 MT/ annum. This
itself will be sufficient biomass requirement of the Petitioners project which
is less than 12000 MT/annum.
d. It is mentioned in the report that in Tal. Bhivapur approximately 50% of soya
husk is consumed and 50 % is surplus. Can there be clarification as to where
other 50% i.e. 45879 of soyabean residue is being consumed. It has already
mentioned that, largely paddy straw, wheat straw, jowar stalks, pulses stalks
etc. are being consumed as fodder and if largely consumed as thatching,
industries and miscellaneous purposes, how reliable and authentic is that
data.
e. As per the report, in Tal. Bhivapur, the crop residue generation and crop
residue ratio (CRR) has been mentioned on the basis of field survey, which
MERC_[Case No. 104 of 2010] Page 18 of 23
contradicts with the data as mentioned in the Biomass Atlas of India
submitted by Indian Institute of Science (IISC), Bangalore to Ministry of
New and Renewable Energy (MNRE). Further, the data is mentioned for
paddy straw and there is no data on paddy husk (rice husk). While the power
plants use rice husk and paddy straw is consumed as fodder of the livestock.
When this is applied for the four Talukas under reference, then there is a
huge variation on the biomass consumption.
16. On receipt of the Petitioner’s above comments on MEDA’s biomass assessment
study report, the Commission vide letter dated 13 February, 2012 directed MEDA to
submit its views / comments on the above issues raised by the Petitioner.
17. In response to above, MEDA vide its letter dated 23 April, 2012 submitted its views
/ comments on the issues raised by the Petitioner on the aforesaid report which are as
under;
a. The methodology for carrying out biomass generation, its consumption and
surplus availability given in the study report is based on the 100 %
collection efficiency, analysis of the secondary data and primary survey
carried in the sample households and other sectorial activities performed in
the Taluka. Therefore, source of data pertaining to biomass consumption is
based on the estimates drawn from the primary survey.
b. The surplus biomass availability figure in MT/year shown in the report
against forest and other land includes waste land other than forest.
Therefore, the surplus biomass of 7890 MT/ year available to M/s. GMT
from this source is not from forest. Hence, in case of procuring biomass
from forest land, it is suggested that permission from the forest department
should be sought.
c. It may be noted that, the crop residue like cottonstalks and soyabean are
used for domestic purposes. Further, soyabean is also consumed as a fodder
to larger extent. Soyabean husk and rice husk contribute to power
generation. With the given consumption, the net surplus of soya husk is
only 9104 MT. This surplus cannot be utilized on account of eventualities.
MERC_[Case No. 104 of 2010] Page 19 of 23
Hence, the possibility of getting the soyabean for a new biomass power
project in the Talukas is difficult.
d. Soya bean is consumed in domestic activities, thatching, brick kilns,
industrial purposes etc. Since the Taluka is assigned to M/s. Yash Agro
Energy Ltd. as biomass collection area, they consume soya husk as
secondary fuel. Therefore, from the total consumption of soya husk in the
Taluka, a major portion is consumed by the power plant already
commissioned.
e. It is submitted that, in case of present biomass assessment study the crop
residue ratio (CRR) is estimated on the basis of primary survey. The
biomass atlas prepared by IISC Bangalore is based on the survey carried out
in the year 2000. Therefore, the CRR figures considered by IISC Bangalore
likely to differ with present CRR.
f. Further, it is submitted that the paddy cultivated area in Bhivapur Taluka is
very small. Therefore, the crop residue generation for paddy husk (rice
husk) is not mentioned in the report. With the given data on paddy
cultivated area, rice husk generation and its consumption in allotted four
Talukas, the data on paddy to rice husk generation having not shown in the
report, bring no impact. Hence, the possibility of variation on biomass
consumption due to short of this data has no meaning.
g. Furthermore, MEDA clarified that there is no incomplete, inconsistent or
assumed data in the report. All the figures produced in the report are derived
after carrying out primary survey in the Talukas.
18. The Commission vide its notice dated 16 May 2012 scheduled the next date of
hearing on 22 June 2012 in the office of the Commission.
19. Third hearing:
19.1 The third hearing in this matter was held on 22 June 2012. Shri.S. A. Patil, GM
and Shri. Paresh Bodhe, Project Officer appeared on behalf of the Respondent (MEDA).
No one appeared on behalf of the Petitioner and intervener during the hearing. During
MERC_[Case No. 104 of 2010] Page 20 of 23
the hearing, the Commission read out a letter received from the Petitioner, wherein it is
mentioned that the Petitioner has already submitted all details and submissions to the
Commission for setting up of proposed 2 MW biomass based power plant using
gasification (Otto cycle) technology at two different sites in Maharashtra State.
However, due to a prescheduled meeting, the Petitioner is unable to attend the hearing
and requested for a suitable Order in the matter.
19.2 The Respondent submitted that, as far as the biomass collection from the two
proposed Talukas are concerned; the same collection area has been already allotted to
the other biomass developers. Therefore, it is not possible at this stage to give the
permission to the Petitioner for collecting the biomass within the same area for their two
proposed biomass plants.
19.3 Having heard the Respondent, the Commission directed the Respondent (MEDA)
to give its clear views/comments whether it is recommending or not recommending the
setting up of the Petitioner’s biomass based power plant using gasification (Otto cycle)
technology at their two proposed sites, with suitable reasons/justifications, on affidavit.
20. In line with the above directives, MEDA vide letter dated 18 July, 2012 submitted
its comments on the Petitioner’s biomass plant based on the gasification (Otto-cycle)
technology at their two proposed sites which are as under;
20.1 The methodology dated 14 July, 2010 declared by the Government of
Maharashtra (GoM) for extending benefits of Non-conventional Energy Generation
Policy dated 14 October, 2008 lays down allotment of four to five Talukas as biomass
collection area to the sanctioned independent biomass power projects for ensuring
sustained supply of raw material. This approach has been adopted by GoM in the wake
of Clause No. 2.21 of the Commission’s Tariff Order dated 8 August, 2005 in Case No.
37 of 2003. In view of this, new biomass power projects, irrespective of capacity,
cannot be permitted in the collection area already allotted to other biomass power
projects.
20.2 It would be appropriate not to remove this zoning policy for promotion of small
gasifier route biomass power projects (Otto-Cycle) and Boiler Turbine Generator
(BTG) route biomass power projects. It is likely to generate several such projects in
MERC_[Case No. 104 of 2010] Page 21 of 23
allotted collection areas creating unhealthy competition for procurement of raw material
and thus affecting the sustainability of the sanctioned/commissioned biomass power
projects. This would result in the rise of raw material prices which would raise undue
expectation amongst the developers regarding upward revision of Tariff.
20.3 M/s. GMT Mining and Power Ltd. and M/s. Yash Agro Energy Ltd. have raised
concerns over the allotment of area to the proposed biomass projects in Nagpur, which
is encroaching their collection area.
20.4 The biomass assessment study conducted in the given Talukas i.e. Tal. Bhivapur,
Dist. Nagpur and Tal. Kalamb, Dist. Yavatmal through an expert consultant, have
showed non availability of sufficient biomass for any additional power projects in these
areas.
20.5 In the light of the above, MEDA is of the opinion that, the 2 MW gasifier based
biomass power projects proposed by the Petitioner each in Tal. Kalamb, Dist. Yavatmal
and Tal. Bhivapur, Dist. Nagpur, cannot be sanctioned.
21. Fourth Hearing:
21.1 The fourth hearing in this matter was held on 8 August, 2012 in the office of the
Commission. Shri. Paresh Bodhe, Project Officer appeared on the behalf of the
Respondent (MEDA). No one appeared on the behalf of the Petitioner as well as
intervener. During the hearing the Commission considered the material placed on the
record by the Parties and posted the matter for further hearing on 4 October, 2012.
22. The Commission vide notice dated 25 September, 2012 rescheduled the hearing
in this matter on 2 November, 2012 in the office of the Commission.
23. Fifth hearing:
23.1 The fifth hearing in this matter was held on 2 November, 2012. Shri. Paresh
Bodhe, Project Officer appeared on behalf of the Respondent (MEDA). No one
appeared on behalf of the Petitioner and the intervener. During the hearing, the
Commission accepted the MEDA’s submission vide affidavit dated 18 July, 2012, for
not recommending the Petitioner’s proposed biomass power projects at Tal. Bhivapur,
Dist. Nagpur and Tal. Kalamb, Dist. Yavatmal.
MERC_[Case No. 104 of 2010] Page 22 of 23
24. DECISION WITH REASONS:
The Commission in its Order dated 8 August, 2005 in Case No. 37 of 2003, has inter
alia ruled as follows:-
“
2.21……..
………
While co-ordinating the development of Projects, MEDA as the State
Nodal Agency shall ensure that Project planning is done in a manner such
assured and reliable quantity of biomass fuel source of desired quality is
available for the Project on long term basis. For this purpose, MEDA
shall vet the assessment of the adequacy of the catchment area and fuel
procurement plan proposed by each Project, and also ensure that there is
no overlap……….”
In view of MEDA’s above recommendations based on the field study at the Petitioner’s
proposed sites, the Commission is of the view that while promoting the biomass based
power projects in the State, there is a necessity to give equal importance to the use of
biomass as fodder, as considerable agricultural biomass is also used for fodder purpose.
Furthermore, promoting biomass power project in the same collection areas which are
already allotted to other biomass power projects, would lead into unhealthy competition
amongst the biomass power project developers and result into the hike of biomass price in
the market. It is a fact that, increase in the price of biomass, would further result in
increase of Tariff for such biomass power projects for which end consumers of the
electricity would have to suffer. Since, it is observed that no surplus biomass is available
at the Petitioner’s proposed sites at Tal. Bhivapur, Dist. Nagpur and Tal. Kalamb, Dist.
Yavatmal for setting up of its 2 MWe biomass power projects based on gasification route
(Otto cycle), the Commission can understand MEDA’s above views for not
recommending the Petitioner’s proposed biomass power projects at above mentioned sites.
In view of above, the Commission is not inclined to determine the Tariff for the
Petitioner’s proposed biomass power projects based on gasification route (Otto cycle) at
the proposed sites.
MERC_[Case No. 104 of 2010] Page 23 of 23
Furthermore, the proviso to Section 64 (3) of the EA 2003, provides as follows:-
“(3) The Appropriate Commission shall, within one hundred and twenty
days from receipt of an application under sub-section (1) and after
considering all suggestions and objections received from the public,-
…
(b) reject the application for reasons to be recorded in writing if such
application is not in accordance with the provisions of this Act and the
rules and regulations made thereunder or the provisions of any other
law for the time being in force:
PROVIDED that an applicant shall be given a reasonable opportunity
of being heard before rejecting his application. ”
In the circumstances, in line with the proviso to Section 64 (3) (b) of EA 2003, the
Commission proposes to reject this Petition as not maintainable after giving a
reasonable opportunity to the Petitioner. The Petitioner shall file its say within a period
of thirty (30) days from the date of this Order failing which, it shall be presumed that
the Petitioner is no longer interested to be heard in the matter before the Commission
and accordingly, the Case No. 104 of 2010, will be liable to be stands dismissed.
Sd/- Sd/-
(Vijay L. Sonavane) (V. P. Raja)
Member Chairman