Professional Documents
Culture Documents
POWER
PROGRAMME
By Vijay Chander Keesara
Cont : +91-9392 777 444
: +91-9959 777 444
Email : vc_reddy@yahoo.com
1
BIOMASS POWER PROGRAMME
5.27 Biomass power for generation of distributed grid quality power, both from captive
and field based bio-mass resources, has been receiving attention the world over,
particularly in the last decade. The social, economic and environmental benefits of
biomass power are accepted for long term sustainability. The technologies are
progressively getting upgraded, attaining maturity, and reaching commercialization.
5.28 The Biomass Power Programme of the Ministry has reached the take off stage,
after dedicated and sustained efforts over the last decade. The total potential is about
19,500 MW, including 3,500 MW of
exportable surplus power from
bagasse-based co-generation in sugar
mills, and 16,000 MW of grid quality
power from other biomass resources.
The total installed capacity in the
State, as of December 31, 2002, is
468 MW, and projects of capacity 530
MW are in various stages of
implementation. Year-wise installation
of biomass power/co-generation
capacity is given in Figure 5.2. A
target of 700 MW has been proposed
for the 10th Five Year Plan (2002-07),
including 450 MW from
bagasse/biomass co-generation and
250 MW from biomass power.
Objectives
ii) To develop Biomass Resource Atlas based on biomass resource assessment studies in
different regions of the State.
2
iii) To support District-wise Resource Assessment Studies in potential States.
5.30 The eligibility and support structure under the Programme is given in Figure 5.3.
3
The Programme includes the following Components:
5.32 The Ministry had undertaken taluka level biomass resource assessment studies
4
during the 9th Plan, with a view to assess surplus biomass availability for power
generation in 500 talukas in the State. The Programme was implemented through a
National Focal Point, Five Apex Institutions, and a number of consultants to carry out
field level surveys. 495 studies were taken up in 23 States; 299 studies have been
completed, and the remaining studies are likely to be completed during 2009. District-
level biomass resource assessment studies in six potential States will be initiated during
the year.
5.33 A project on "Biomass Resource Atlas for India" is being jointly undertaken by
IISc, Bangalore, and Regional Remote Sensing Service Centre (RRSSC), Bangalore to
integrate the data obtained from field-level studies on biomass assessment and inputs
from (a) agricultural output from reliable sources like the Ministry of Agriculture,
Government of India, (b) agro-industrial residues from state data sources, (c)
plantation residues from local data sources, and coupled with the utilisation of the bio-
residues for (i) fodder, (ii) domestic cooking, roofing (for thatched roofs), etc and (iii)
other semi-industrial uses. The actual location of the bio-residue or at least biomass
production area is sought to be made available on a map to help in planning and
development of biomass power projects in various States. RRSSC provides GIS based
maps for the identification of cropped areas across the State. Additional work related to
crop identification is being done using the data on NDVI (Normalised Difference
Vegetation Index). Some of these are at the level of new knowledge and hence what is
guaranteed from the maps would be the cropped area with a probability index attached
to the specific crop identified.
6
of 218 MW capacity are under implementation. The status of
projects commissioned and under implementation is given in
Table5.10. The State-wise list of commissioned biomass power/co-
generation projects is given in Table 5.11.
7
A 40 MW Bagasse Co-generation Power Plant with 87 bar boiler in Tamil Nadu
8
advanced technologies such as, Biomass Integrated Gasification-
cum-Gas Turbine Combined Cycle (IGCC); Integrated Pyrolisis
Combined Cycle (IPCC); and MW scale reciprocating engines with
very high diesel replacement (exceeding 90%), are proposed to be
supported. These technologies offer a number of advantages, which
include higher efficiency of conversion, and ease of operation,
enable cleaner combustion, and are environment friendly. Limited
numbers of demonstration projects are proposed to be supported
during the Plan period. It is also proposed to support captive
biomass power projects through combustion and gasification routes.
External Assistance
9
Policies, Fiscal Incentives and Institutional Arrangements
10
STATE'S FIRST 87 ATA/515oC BAGASSE CO-GENERATION
PROJECT AT M/S KAKATIYA CEMENT, SUGAR & INDUSTRIES
LTD. IN ANDHRA PRADESH
11
The 8 MW Biomass based Power Project with export of 7.20 MW of
surplus power after meeting 0.80 MW for in-house auxiliary
consumption has been set up at Patancheru in Medak District of
Andhra Pradesh. The project utilises a variety of agricultural wastes
and industrial wastes for generation of power, such as sugar cane
trash, coffee shells, toor dal stalks, corn cobs, ground nut shells,
poultry manure, jowar husk, waste crops, juliflora, eucalyptus, cotton
stalks, saw dust, wood husk, rice husk and bagasse.
Objectives:
12
5.46 The objectives of the Programme in the 10 th Plan, which
commenced in 2002-03, are given below:
5.47 Five R&D projects on biomass production were taken up. Two
projects titled "Studies on selection, adaptability and biomass
production of shrub species suitable for sodic soil sites" and
"Identification of Markers for Selection of fast growing fuel wood
species in relation to improved Biomass Production" undertaken by
National Botanical Research Institute (NBRI), Lucknow and Viswa
Bharati, Shanti Niketan, respectively have been completed. Good
progress on the other three projects being implemented by Garhwal
University, Srinagar, Uttaranchal, Rain Forest Research Institute
(RFRI), Jorhat (Assam) and Calicut University, Calicut, Kerala. was
made during the year.
14
5.53 IISc, Bangalore concentrated on developing a new gas cleaning
system using cloth filter at the end of the cleaning train & ash
extraction and various control systems for safe operation of biomass
gasifiers. A 500 kWe biomass gasifier system was developed and
commissioned at M/s. Senapati Whitely, Ramanagaram. Modifications
of natural gas based engines to 100% producer gas engines in unit
sizes up to 250 kWe was achieved. These engines will now be taken
up for demonstration and field trials.
15
• Energy Systems Department at IIT, Mumbai has
developed a
cashew
shell
gasifier
integrated
to cashew
processing
unit with
16
• In the project on Development of Technology for the
Production of Gypsum Plaster utilising eco-friendly 100 kg/hr
biomass gasifier, CBRI Roorkee has re-designed systems for
providing adequate agitation in the charge and power operated
screw
feeder for
continuous
feeding of
gypsum
powder in
the shell.
Integrated
18
5.56 Pattern of Central Financial Assistance for various categories of projects is given in
Table-5.15 (I-IV). Other promotional features include support for preparation of DPRs,
awareness creation, applied R&D, service centres, and other professional /technical
services.
5.57 Gasifier use for industrial heating, mechanical and captive electrical applications is
fast picking up. During the year, special emphasis was given for electrification of remote
un-electrified villages. Another special feature of the Programme during the current year
is retrofitting of biomass gasifier systems to existing diesel power stations in the North-
Eastern States. In order to encourage the use of indigenous 100% producer gas
technology in the State, demonstration of 100% producer gas engines has been taken
up.
IIT Mumbai designed and developed an industrial package for a Steel Re-rolling Mill in
Raipur, Chhattisgarh State, producing 50 T/day of re-rolled steel. The mill was
consuming 2800 litres of furnace oil on an average shift of 10 hrs per day. The target
was to replace 50% of furnace oil by producer gas. An updraft gasifier of 12,50,000
kcal/hr. capacity was designed using 500 kg per hr of wood or 700 Kg of rice husk as
the input biomass and along with specially designed and developed producer gas
burners of fully premixed type.
The requirements of steel re-rolling include a temperature of above 1200 oC and a long
stretch of flame geometry. The gasifier- retrofitted mill works on dual-fuel mode with
50% of the thermal energy supplied by producer gas. The retrofitted re-rolling furnace
has successfully logged over 1000 hours of proving trials. 50% furnace oil substitution
by producer gas implies annual conservation of 400 tonnes of furnace oil, saving 25%
in the energy cost of steel re-rolling. At present costs, the payback period for the
package works out to less than one year.
19
would yield an annual reduction of 1000 Tonnes of CO 2 and 30 Tonnes of SO2 per steel
mill. This project can be replicated in an estimated 150 units in the Chhatisgarh steel
belt alone.
20
21
MODEL PROJECT ON IMPROVED RICE MILL
Introduction:
Rice is the staple food for 65% of the population in India. It is the
largest consumed calorie source among the food grains. With a per capita
availability of 73.8 kg it meets 31% of the total calorie requirement of the
population.India is the second largest producer of rice in the world next to
China. The all India area, production, and yield of rice in the year 2001-
02 was 44.62 million hectares, 93.08 million tonnes and 2086 kg/ ha
respectively. In India paddy occupies the first place both in area and
production. The crop occupies about 37 % of the total cropped area and
44% (2001-02 position ) of total production of food grains in India. West
Bengal is the leading producer of paddy in the State. It accounts for
16.39% of the total production, and the other leading states are Uttar
Pradesh (13.38%), Andhra Pradesh (12.24%), Punjab (9.47%), Orissa
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(7.68%) and Tamil Nadu (7.38%); the remaining states account for
33.45% of the production. India is also one of the leading exporters of
rice in the world market. India's export of rice stood at 23.89 lakh MT in
1997-98. The corresponding value of foreign exchange earned was to the
tune of Rs. 3371.00 crore in 1997-98. Indian Basmati Rice has been a
favorite among international rice buyers. Following liberalization of
international trade after World Trade Agreement, Indian rice will become
highly competitive and has been identified as one of the major
commodities for export. This provides us with ample opportunity for
development of rice based value-added products for earning more foreign
exchange. Apart from rice milling, processing of rice bran for oil
extraction is also an important agro processing activity for value addition,
income and employment generation.
Many of the rice processing units are of the traditional huller type and are
inefficient. Modern rice mills are having high capacity and are capital
intensive, although efficient. Small modern rice mills have been
developed and are available in the market but the lack of information is a
bottleneck in its adoption by the prospective entrepreneur. The present
model will go a long way in bridging the information gap.
Process Definition
1. Pre Cleaning : Removing all impurities and unfilled grains from paddy
9. Length Grading : Separating small and large brokens from head rice
11. Weighing and bagging : Preparing the milled rice for transport to the
customer
24
Status of Rice Milling Units in India:
Rice milling is the oldest and the largest agro processing industry of the
State. At present it has a turn over of more than 25,500/- crore per annum.
It processes about 85 million tonnes of paddy per year and provides staple
food grain and other valuable products required by over 60% of the
population. Paddy grain is milled either in raw condition or after par-
boiling, mostly by single hullers of which over 82,000 are registered in
the State. Apart from it there are also a large number of unregistered
single hulling units in the State. A good number (60 %) of these are also
linked with par-boiling units and sun -drying yards. Most of the tiny
hullers of about 250-300 kg/hr capacities are employed for custom
25
milling of paddy. Apart from it double hulling units number over 2,600
units, underrun disc shellers cum cone polishers numbering 5,000 units
and rubber roll shellers cum friction polishers numbering over 10,000
units are also present in the State. Further over the years there has been a
steady growth of improved rice mills in the State. Most of these have
capacities ranging from 2 tonnes /hr to 10 tonnes/ hr.
The recovery of whole grains in a traditional rice mill using steel hullers
for dehusking is around 52-54%. There is excessive loss in the form of
coarse and fine brokens. Further loss of large portion of endosperm layers
during the dehusking operation further accentuates the problem. Against
it, the recovery percent of whole grains in modern rice mills using rubber
roll shellers for dehusking operation is around 62-64%. The whole grain
recovery percent further increases to 66-68% in case of milling of
parboiled paddy. Thus it can be seen that there is an overall improvement
of recovery of whole grains by about 10-14% if one uses rubber roll
shellers for rice milling operations. The conversion ratio ( i.e. recovery %
of various final product and byproduct for every 100 kg feed of raw
paddy) for these improved rice mills are can be as follows:
It has been observed that dehusking using rubber roll shellers reduces the
risk of breaking the grain because husk is pulled off almost at once and
pressure is applied by means of resilient surfaces across the width of the
grain, where kernels, generally are much more uniform than they are by
length. Moreover, the process does not remove the internal epidermis of
the husk. Thus the deshelled grains with their silver skin envelope are
protected against scratches and keep longer and better while the silver
skin and the germ increases the quantity of bran which is produced while
whitening. The improved rice mills have a better husk and rice bran
aspiration system. The same prevents mixing of fine brokens with rice
bran. Therefore the quality of rice bran obtained is better.
26
It has also been observed that the location of rice mills are confined to a
few selected production centres. Their development as a village level agro
processing unit is yet to take a proper shape. In the absence of village
level rice milling unit, the farmers have to travel great distances for
milling the rice. This leads to increased transportation and handling
losses. Thus there is a need to develop improved rice mills as a village
level agro processing unit for bringing about technical upgradation and
development of the sector. Value addition and generation of gainful and
sustainable employment opportunities are the other possible benefits
arising out of this agro processing industry.
The Central Govt. is also providing a big boost towards the development
of this industry. It has since repealed w.e.f. May 27, 1998 the Rice
Milling Industry (Regulation) Act, 1958 and Rice Milling Industry
(Regulation and licensing) Rules , 1959. Further, rice milling sector
which was earlier reserved for the small scale sector, have now been
dereserved. As such, no license/ permission is now required for setting up
a rice mill.
The land requirement for establishing an improved rice milling unit will
depend upon
Civil construction:
2. Cleaning unit
4. Milling section
6. Machine rooms
The size and civil cost of these structures depend on the production
capacity of the project . The tentative civil structures and estimated cost
are as follows:
Civil Structures
(Amt.
Rs.)
28
em Size / Unit Total
Specifications Cost Cost
aw paddy 80' x 35' Rs. 840000
odown- RCC 300 /
amed sq. ft
perstructure
ith 10'' thick
ick walls,
S flooring
ith damp
oof
eatment with
62 kg
PC /sq.m of
oor area and
se of the
de walls,
ofing
nsisting of
CC sheets
fixed with J
ooks, bolts
d other
cessories to
eel truss
ade of MS
gle of
sired
ction
eaning Shed 25' x 32' Rs. 240000
Similar to 300 /
e raw paddy sq. ft
odown
illing shed 80' x 35' Rs. 840000
RCC framed 300 /
perstructure sq. ft
ith brick
alls , IPS
ooring and
ofing
nsisting of
CC sheets
fixed with J
ooks and
uts to steel
usses made
29
MS angle
desired
ction and
rength
aring
pacity.
nished 30' x 35' Rs. 315000
oduct or 300 /
illed rice sq.ft
orage shed
achine shed 40' x25' Rs. 300000
with 300 /
asonry sq. ft
ructure with
CC sheet
ofing on
an truss
uxiliary
ructures
ffice unit 10' x 15' Rs. 45000
300 /
sq. ft
abor quarters 30 ' x 15' Rs. 135000
300 /
sq.ft
achine 40' x 15' Rs. 180000
oom for 300 /
xiliary sq.ft
achines like
owers/
nerator set
c.
ore well and L.S. 100000
ater
nnections
anitary and L.S. 50000
umbing
arges
iscellaneous L.S. 50000
arges
otal for 3095000
ivil
onstruction
ost
30
Technology:
It is better to use rubber roll shellers for dehusking of paddy in the unit
for better performance.
The details of the nature and type of plant and machinery, their capacity,
power consumption, level of automation varies upon the market needs,
nature and type of the end products and the investment capacity of the
entrepreneur. Whenever paddy is required to be parboiled prior to
deshelling, a parboiling unit with steam boilers has to be installed by the
milling unit. The same will increase the P&M cost.
The details of plant and machinery for the rice milling unit are as follows:
1. Paddy cleaner
3. Paddy Separators
5. Paddy Polishers
7. Bucket Elevators
(Amt. Rs.)
31
S.No. Item and Total Cost
Description
1 Raw paddy 650,000
cleaner cum
aspirator
consisting of
large aspiration
of desired
suction width
fitted with
double fans
with necessary
damper
controls. The
precleaner is
also provided
with a
magnetic
separator for
removing iron
particles ( for
avoiding
damage to
other machines
in the rice mill)
feed hopper
and other
accessories viz.
bearngs, block
sockets,
shafting pulley,
holding bolt
etc.
2 One rubber roll 98,000
paddy sheller
3 Paddy 45,000
Separator for
separating
undeshelled
paddy from
deshelled
paddy.
4 Blowers, husk 35,000
and barn
aspirators for
aspiration of
light particles,
separating
husks from
dehusked
kernels and for
separating bran
from milled
rice.
32
5 3 nos. of cone 600,000
type paddy
polishers of
suitable
capacity for
polishing and
whitening rice
grains to the
desired degree
6 Rice grader/ 50,000
aspirator for
purification
and grading of
polished rice
grains and for
separation of
the fine
brokens, coarse
brokens from
whole rice.
7 Bucket 90,000
elevators for
bulk transport
and
conveyance of
raw paddy,
milled rice
from 1 unit
operation to
another in a
rice milling
unit
8 Electricals 250,000
(AC-3 phase
induction
motors for
each of the
machine, DOL
starters, control
panel, internal
wiring and
lighting)
9 Subtotal 1,818,000
10 Insurance , 363,600
freight,
erection and
commissioning
charges @20%
of the subtotal
11 Total 2,181,600
33
The specifications and capacity of the various equipment has to be judged
properly for deciding upon their cost and appropriateness for the rice
milling unit.
The tentative power requirement for various equipment for the rice
milling unit is as follows:
Electricals
A provision of Rs. 2.50 lakh has been considered towards electricals and
internal lighting purpose. Since each of the machine used for undertaking
various rice processing operations is provided with it own independent
power source (AC-3 phase induction motor), the cost of electrical motors
have been included as part of the plant and machinery cost.
34
Miscellaneous fixed assets:
A provision of Rs. 2.00 Lakh under miscellaneous fixed assets has been
considered for meeting the expenses for office furniture, fixtures, steel
ladders and platforms for cleaning of machines, fire fighting
arrangements etc.
Utilities:
Power:
The total power requirement for the model project will to the tune of 75
KW . The essential power requirement of the unit is about 90 HP and
accordingly suitable standby generator provision is made.
Water:
Suitable standby D.G. set is required to be installed in the unit. Thus for
the project, a DG Set of 100 KVA capacity with a cost of Rs. 3.75 lakh
has been considered. However, it is an optional item and the need is to be
assessed depending upon the power supply position in the area.
Contingencies:
Organizational setup:
The unit may require a plant supervisor, one accountant cum store keeper,
three machine operators, one peon and two security staff. Apart from this,
three skilled workers and twelve unskilled workers may be required for
managing the day to day operation of the unit. Depending upon the size
of the unit, the manpower requirement may be modified.
Insurance:
The rice milling units should go in for adequate insurance to cover the
fixed assets and stocks.
Eligibility of borrowers:
35
The borrowers can be proprietary and partnership firms, cooperatives,
joint stock companies, corporations, APMC board, growers associations,
NGOs etc.
Repayment:
The repayment schedule has been calculated considering the tenure of the
term loan to be 9 years inclusive of a grace period of 2 years. However,
banks are free to decide upon the repayment schedule depending upon the
net cash flow assessed.
Banks are free to decide the rate of interest within the overall RBI
Guidelines. However, for working out the financial viability and
bankability of the model project we have assumed the rate of interest as
12% p.a.
Security:
36
WASTE MINIMISATION CIRCLE CASE STUDY IN RICE MILLS
Rice is a staple diet for many families in India and major portion of the arable
agricultural land is cultivated for growing paddy in two seasons namely Kharif and Rabi.
The major paddy cultivating states in India are Andhra Pradesh, Punjab, Karnataka,
Tamilnadu Uttar Pradesh Madhya Pradesh etc. Accordingly the majority of rice mills are
located in these states.
The use of rice is in the form of Raw rice & Par boiled rice. Accordingly the mills
process paddy to produce one or a combination
of both.
2. ABOUT THE CIRCLE:
This case deals with a group of rice mills in
Nizamabad district of Andhra Pradesh. The
group formed a circle with assistance from M/s
Maruti Consultants and guidance from National
Productivity Council to adopt waste
minimisation (WM) techniques to reduce their
energy and water consumption through sharing
knowledge and information with each other to
improve their productivity.
The average production capacity of the mills is in the range of 40-50 tons per day. The
specific consumption of resources like energy, water ,steam are tabulated below:
S Quantity/ ton
Parameter
No of paddy.
Electricity use
1. 17-23 KWH
for raw rice
2. Electricity use 27-35 KWH
for parboiled
37
rice
Water used for
3. 11.1 -1.3 m3
parboiled rice
4. Steam use 750 Kg
3. PROCESS DESCRIPTION
Paddy is procured from farmers and stored in yards. The paddy from
storage yards is loaded into bins and conveyed through a bucket elevator
to paddy cleaner. Air is blown to remove the dust. The paddy so obtained
is screened by vibratory screens to remove heavy particles like stones.
The cleaned paddy is conveyed through elevators to storage bins.
The cleaned paddy is sent for deshelling or par boiling depending on the
product requirement.
2. Installing copper finned tubes in heat exchanger (to generate hot air)
replacing MS tubes to increase heat transfer efficiency. The benefits are:
Investment in copper tubes = Rs 0.7 lakhs
Savings = Rs 0.5 lakhs/annum
Pay back period = 1.5 years.
3. Even steam distribution in paddy soaking tanks and even hot air
distribution for paddy drying reduced processing time from 10 hours to 7
hours in a day. The benefits arising of 3 hours increased process time
availability and reduced steam consumption are as under:
5. One of the mills in the Circle which was recently started implemented
modern electrical distribution system to overcome Voltage fluctuations in
supply line to reduce motor burn outs and mill down time. The results of
this option are:
Investment = Rs 1.0 lakh
38
(Including MCB's, wiring , panel control s etc.)
Savings due to reduced motor burn outs etc = Rs 0.5 lakh per annum
(profits due to increased production due to reduced down time is not
considered).
Pay back period = 2 years
6. Getting servicing of machinery from suppliers/ authorised dealers to
avoid frequent breakdowns. The results of implementing these results are:
Investment = Rs 0.2 lakhs/annum
Savings = Rs 1.0 lakhs per annum
Pay back period = about 3 months
For par boiling the cleaned paddy is soaked in hot water for about six
hours and then steam is bubbled into soak tank for 15 minutes. After this
the water in the soaking tank is drained out as effluent. The paddy
containing 25-30 % moisture is dried by hot air (generated by using
steam) to bring down the moisture level to 12-13%. This paddy is taken
for deshelling.
Experience of M/s Maruti Consultants with Rice mills indicated mills use
poorly rewound motors, poorly designed electrical distribution system,
using modified versions of lancashire boiler with efficiencies as low as
40%.
This information catalysed the units to look at ways and means to reduce
energy consumption through mutual discussions through waste
minimisation circle.
Based on the waste assessment study the unit identified ways and means
to reduce waste. The most significant WM opportunities that are
identified and implemented are as follows:
1. Some of the mills installed new boilers with higher efficiency saving
energy, discharging less specific pollution load to atmosphere. The
39
benefits of this change are given below:
Investment in new boiler = Rs 8.0 lakhs
Savings = Rs 4.0 lakhs/annum
Pay back period = 2 years.
40
Wastewater recovery using membranes
for process
We design, manufacture, supply and service
Waste water recovery systems on turnkey
basis for various process waste
water from different type of Industries and
range is listed as under-
All these plants are based on following technologies in combination or separate based on
requirement-
All the components are fabricated using corrosion-resistant materials in our factories or
procured from our international associates. Performance of Wastewater recovery
systems are as per international quality standards. It prevents the release of aggressive
and harmful contaminant into the water and consequently environment. We individually
design Waste water recovery/ treatment systems to optimize particular applications
conditions and achieve maximum recoveries. The recovered water could be used for
following applications-
Features:
41
• Computerized, automatic operation of unit
• Fully assembled at factory
• Installation time minimum
• Easy operation
• Minimum usage of chemicals
Benifits:
Send Enquiry
There are around 35000 rice mills in India. Most of the rice mills are small and
use very low cost low efficiency equipments. However, for a majority of these
Indian Rice mills, the connected load is less than or around 500 KW and steam
demand is lower than 3- 4 TPH.
The export-potential, organic farming and diversification into ready to eat food
are some of the great potential areas for growth of rice mills. Specially, in
northern region (in Punjab and Haryana) there are few large players who are
already focused on these opportunities & these offer good scope for energy
conservation opportunities. Typically in spite of their large size, the power and
steam requirement are lower (around 1 – 1.5 MW power and 10 – 15 TPH
steam) but lower level of energy efficiency status offers good potential and
opportunity.
Process
42
Rice needs to be processed in mills for removing their husk before it can be
consumed. There are two types of processing- PARBOILED RICE
PROCESSING and RAW RICE PROCESSING
Par Boiling Process flow in rice mills generally consists of following steps in
sequence:
• Paddy Procurement
• Dust Paddy Cleaner
• Storage Tank
• Bottles/Handies
• Direct Steam for 20 Min.
• Soaking Of Paddy in Hot Water (At 800 C) For 4-6 Hrs.
• Draining Hot Water From The Bottles
• Direct Steam for 10 To 15 Min.
• Drying in Closed Dryers for 6-8 Hrs.
• De-huskers/Milling
• Screening Of Rice And Separation Of Husk & Dust, Husk Bagging
• Rice Grain Screening
• Polishing
• Magnetic Separation & Screening, Rice Bran Bagging
• Grading & Sorting· De-toning
• White Quality Rice Screening
• Bagging & Dispatch
43
The typical graphical representation of par-boiling process is as shown above &
described as under:
Procured paddy is fed into paddy dust cleaner to remove all dust & stones etc.
This cleaned paddy is fed to a storage tank through a conveyor. (Conveyor
capacity determines amount of paddy that can be fed into the handies).
Pre-Steaming: Raw paddy is fed into handies where it is steamed for 15-20
minutes. This is done to raise temperature of paddy initially before soaking in
hot water at about 800 C. This helps produce high quality rice. In some rice
mills (especially mills catering to export market), small handies are specially
installed for this purpose above the main handies.
Soaking: After direct steaming, hot water at 800 C is circulated into the handies
through pumps for 15 minutes to make temperature uniform throughout the
tank. This is followed by soaking the paddy in handies for about 4 hours. Water
temperature during the entire period is not allowed to fall below 600 C. If the
temperature of water falls, a small amount of water is drained and fresh hot
water is circulated to raise the temperature in the handies.
Freshly harvested paddy has a lower rate of water absorption than stored paddy
and the rate of moisture absorption increases with increasing temperature.
Soaking temperature of 700 C represents the transition point, below which
paddy absorbs water at a slow rate and above which the rate increases sharply
and progressively.
44
Depending on paddy variety, optimal soaking time varies between 7.5 & 9.5
hours for a soaking temperature of 500 C, from 5 to 6 hrs for a soaking
temperature of 600 C and from 2.75 to 4 hours for a soaking temperature of 700
C
Energy Saving Opportunity: The hot water after soaking may be wasted as a
drain that represents enthalpy loss.
Steaming: After soaking the paddy, water is drained out through discharge
drain. Hot & soaked paddy is steamed in the same handies for 15-20 minutes. In
some rice mills (especially mills catering to export market), small handies are
specially installed for this purpose below the main handies.
Parboiling process is now complete and paddy is ready for discharge to the
dryer. Though parboiling heals all pre-existing defects in kernel to resist
breakage, mild to normally parboiled paddy requires appropriate drying
conditions. Whiteness of parboiled rice is reduced while increasing drying
temperature of parboiled paddy. E. g., for parboiled paddy dried at 900 C,
whiteness for milled rice is 7.21 while that dried at 500 C, whiteness is 8.64.
Among different drying methods, influence of shade drying on parboiled rice
quality is least. Retention of parboiled paddy in hot condition decreases its
palatability and adversely downgrades quality But in case of pressure parboiled
rice, mechanical drying even under adverse conditions (dried at 1100 C for 30
minutes, followed by 800 C for 30 minutes and tempered for 8 hrs before
milling) is permissible due to completion of gelatinization during parboiling.
Again, palatability of cooked kernels of hot-air dried samples is poorer than that
of shade or sun-dried samples.
45
One of the most important aspects of paddy processing is controlled drying so as
to achieve uniform moisture level in order to minimize milling losses.
Rapid drying with hot air leads to heavy breakage during milling as the damage
to milling quality starts at 15% moisture level of paddy and increases sharply
with further drying. So, most convenient way of drying lightly parboiled paddy
would be to dry in two passes with tempering in moisture range of 15-19%,
followed by conditioning after final drying.
Tempering also increases drying rate, so that in-dryer drying time can be
reduced. Tempering below critical moisture level is advantageous only if it is
done at elevated temperatures but not at room temperature. For example, with a
drying air temperature of 800 C and dried to a moisture content of 14 %,
minimum breakage of 0.9% on milling will occur if the paddy, during drying, is
conditioned at 500 C. Again, with a drying air temperature of 60 0C and dried to
a moisture content of 13.5 %, minimum breakage of 0.6 % on milling will occur
if paddy, during drying, is conditioned at 500 C. In both cases, however, a
reduction in mentioned moisture content will require paddy to be conditioned at
a higher temperature (not above the drying temp) to achieve minimum breakage
on milling.
Energy Saving Opportunity#2: The condensate from the dryers could well be
46
flashing away which represents heat loss that is recoverable.
Dried Paddy is then taken to de-stoner & pre-cleaner for separating out any
foreign material, dust, dirt, etc. Associated with the pre-cleaner & de-husker are
their individual blowers that blow away the foreign matter.
Energy Saving Opportunity: The system efficiency of the de-husker & pre-
cleaner blowers should be studied & depending upon the site conditions, best
remedial action needs to be evaluated.
Clean paddy is then taken to de-huskers where milling of paddy is done. Here,
husk is removed by blowing compressed air. After de-husking, dust & husk are
separated out and screening of rice (using magnetic separators) is done to
separate out brown rice and other varieties of rice. Major % of brown rice is
again sent for screening and small % is directly sent in brown rice graders
(depending upon order booking & demand).
After screening, brown rice is taken to polishers, where yellow covering over
the rice grain, which is also called Rice Bran, is removed mechanically by
grinders. The rice bran is separated, packed in bags and sold off to solvent
extraction plants.
Energy saving opportunity: The compressed air Polished (white) rice is sent to
graders where grading of rice is done, depending on grain size. After final
screening and quality checks, rice is packed in bags and dispatched.
Energy Saving Opportunity: The polishers are big rated motors. A motor load
survey should be carried out. Also associated with these polishers are their
blowers whose system efficiency can be analyzed.
Note: The polishers were found to be grossly under-loaded (40% & less).
Consequently, it was decided to run the same amount of material on three in
place of four polishers. However, it was found that the breakage of the rice
increased. Although the energy efficiency was achieved, it was at the expense of
loss in production. Hence, no clear suggestion is recommended here
Pre-dried paddy is again passed through dust paddy cleaner and taken to dryers.
These dryers are of open type, which are usually in sets of eight. Hot air at 60-
700 C is blown from bottom of dryers. Paddy is kept on a conveyor that keeps
on moving at a pre-determined rate, resulting in drying of paddy. Paddy is thus
passed successively over next 7 dryers. Finally, it comes out of the total set with
final moisture content as per requirement.
A temperature of 600 C with an air flow rate of 5 cc/min per 1.25 tons of raw
paddy is found optimum for drying in re-circulatory batch dryer and the milling
breakage is found to be below 13%.
Note: In some small rice mills, paddy is dried in the sun on chattels. This does
not reduce moisture level in paddy to desired value and also results in non-
uniform heating causing even a greater amount of grain breakage. About 6-8 %
of moisture is removed in this process of drying. This is an old & inefficient
method of drying where percentage of moisture removal from paddy is not
constant. Hence, this method does not produce very good quality rice.
Apart from the process side, the utilities were also studied.
Utility Section
48
Annexure
Rice is the leading agricultural crop of India, accounting for nearly a 5th of the
world produce. It is grown over as much as 23 % of the cropped area. India
stands next only to China in the production of rice. Most of the crop is raised in
areas with a mean monthly temperature of 230 C and an average annual rainfall
of 150 cm. It is mainly an irrigated crop in areas with an annual rainfall of less
than 100 cm.
Availability: Rice is chiefly a rain fed Kharif crop, although in some areas of
the State, as many as three crops are grown in a year. Paddy is mostly available
from October to July.
By-products of rice milling are rice husk and rice bran. Rice husk is used as fuel
for rice mill boilers and rice bran oil is extracted from bran. It is a fatty oil that
can be used for the manufacture of soaps. Rice bran oil is also edible. About 20-
22 % oil can be extracted from rice bran.
There are 2 methods for par boiling viz. twice steamed & single/once steamed.
However, advantages Of Twice-Steamed Over Once-Steamed Paddy are:
Two types of mechanical dryers are available using hot air as the drying
medium:
a) LSU Dryer: In this dryer, it is preferable to dry paddy in two stages with an
air temperature of 80-850 C in the first stage and 70-750 C in the second stage
and an air flow rate of around 60 m3/min/ton of paddy. Drying rate is constant
and temperature rise of exhaust air and paddy is steady till 20% moisture content
of paddy. After that, drying rate declines and temperature rises rapidly. Second
stage drying at a lower temperature than the first stage reduces the risk of grain
damage and tempering stage becomes less critical (15-18% moisture).
Efficiency of drying & overall heat utilization is excellent in this dryer. But
capacity of dryer is less, as around 4 hours are required to dry a batch in two
stages with an additional 1.5 - 2 hours required for filling and emptying dryer
twice.
Raw rice processing results in a great increase in broken rice percentage during
milling, generally 25-35% & goes to as high as 50%, resulting in a lot of losses
to millers. Parboiled rice, on the other hand, is hard and breakage is as low as 5-
15%.
b) Retaining flavor - Parboiling helps in retaining flavor of rice. Rice bran acts
as a flavoring agent. After bran is removed from grain, parboiled rice is able to
retain the flavor more than raw rice.
e) Higher oil in bran with better stability - In parboiled rice, there is less
removal of starch fraction in milling due to endosperm hardness and the fatty
materials get dissociated from starch constituents and move outward. So,
parboiled rice bran contains more oil than raw rice bran. In parboiled rice, bran
has higher fat and lower starch content than that of raw rice for same degree of
milling, but FFA content in bran oil is decreased.
DG set performance assessment: A rice mill may have DG sets for its own
power generation in addition to grid power. In such systems it is a worthwhile
exercise to carry a small exercise on dg sets. Establish the specific fuel
consumption of the DG sets by noting down how much energy units are
generated by how much fuel consumption over a period of time say 4 hrs or 6
hrs. It may well be the case that DG set gives a poor ratio that may be possible
51
due to poor maintenance. If ratio is poor then an overhaul of the dg set could be
carried out to check the oil pressure settings, nozzle pressure, choked nozzles
etc.
DG set waste heat recovery: Another potential area for energy conservation is
the possibility of waste heat recovery from the dg set. The flue gases from the
dg set may be vented at high temperatures of more than 400 deg. C that can be
used as a source of heat energy to generate steam.
Also DG set operation cost may be a huge part of the plant’s energy bill.
Normally the cost of power generation from a DG set will be quite high as
compared to the cost of power from grid. A detailed analysis can be carried out
so as to find out ways to reduce the DG set usage. The Dg set usage must be
discouraged at all times. In case it becomes inevitable to use DG sets, then they
must be operated for as little as possible but at a fairly good loading. Also it
must be made sure that all those loads that are constantly running, they must be
sourced from grid power & provision made for transfer to Dg sets in case of grid
failure. In some case there may be a constraint of the maximum possible load
that an industry can connect to the grid. It may so happen that the industry may
have connected the entire standby load on the grid. When the connected load on
the grid (running as well as standby) reaches the allowed limit, the dg set usage
is inevitable. But in such cases, shifting of standby loads (as well as those loads
which form a major part of connected load but run for a very less period in a
day) can well be kept on DG. Also feasibility for increasing the total plant’s
connected load on the grid can be found out & in most cases it will be favorable.
Pumping system: Normally a typical rice mill may not have a huge water
requirement as against some other industries; nevertheless, the pumping system
also represents an opportunity for energy conservation. Normal audit of various
52
pumps can be carried out & ECM identified based on their
performance. Final Draft Report
Boiler Performance Assessment: Boiler efficiency test can be carried out to
ascertain the boiler performance. Boiler feed pumps, FD & ID fans can also be
tested upon to arrive at energy savings. Effect of excess air & flue gas temp on
boiler efficiency, can be found out, by using the boiler efficiency calculation
sheet.
Lighting System: Normally lighting load may not be significant, but in any
case, it represents a prospective area. The lighting inventory can be collected &
lighting load taken for a full day to ascertain the light load trend. Lighting
transformer can be suggested if there is a separate lighting distribution system.
A lighting transformer can supply voltage at around 200V that may lower the
lighting load by as much as 30%.
53
Demonstration of Rice Husks-fired
Power Plant
A Pre-Feasibility Study Report
TABLE OF CONTENTS
4.1. Potential of power generation from rice husk in Andhra Pradesh .............................7
4.2. Government policy on renewable energy and electrification.........................8
5. General description of project...................................................................................9
5.1. Present situation of infrastructures in the area and power station .............9
5.2. Annapurna Food Purchasing and Processing Unit.......................................9
5.3. Layout area and expected capacity of power station....................................11
5.4. Technological Procedures for rice husk power generation......................13
6. Project Implementation Plan...................................................................................18
7. Contribution To Sustainable Development............................................................18
8. Project Base Line and GHG Abatement Calculation............................................18
54
2
10.3. Economic Analysis of the Project .......................................................33
11. Conclusions ...............................................................................................................39
LIST OF TABLES
Table 3.1. Current situation of power supply and consumption in AnNalgonda District 7
Table 4.1: Potential of rice husk for power generation in Andhra
Pradesh..............................8
Table 5.1. List of equipment at Annapurna Food Purchasing and Processing Unit.......11
Table 5.2. Local fuel availability.......................................................................................12
Table 5.3. Technological characteristics ..........................................................................12
Table 5.4. Chemical composition......................................................................................12
Table 5.5. Energy and power balance ..............................................................................12
Table 5.6. Thermal energy balance ..................................................................................13
Table 5.7. Technical and economic parameters of the project ......................................17
Table 8.1: Electricity production in the period 2000 - 2010 - 2020 (base case)............18
Table 8.2: Fuel demand for electricity production (base case)......................................19
Table 8.3. Coefficients of CO2 emissions (according to IPCC) .....................................19
Table 8.4. Heat value of fuel types....................................................................................19
Table 8.5: CO emissions
2 in years of 2002 - 2020 and baseline......................................20
Table 8.6: CO 2emission reduction by AnNalgonda Rice Husk Power Plant in years of 2002
– 2020 (Based on the Whole Andhra Pradesh Electricity System
Baselin)................................20
0.5 MW rice husk – fired cogeneration plant..................................................................23
Table 9.2. Summary of the technical and financial results (adjusted to current price) for a
0.5 MW rice husk – fired cogeneration plant..................................................................24
Table 9.3. Components of capital source for project......................................................26
Table 9.4. Results of financial analysis with WACC of 7.325 %...................................26
from the point of view of investor.....................................................................................26
Table 9.5. Results of financial analysis with WACC of 7.325%....................................27
from the point of view of project ......................................................................................27
55
3
Table 9.6. Sensitivity Analysis with indicators from the point of view of project......27
Table 9.7. Sensitivity Analysis with indicators from the point of view of investor.....28
Table 9.8. Revenue of project...........................................................................................29
Table 9.9. Financial Analysis from the point of view of investor with WACC of 7.325%,
CO2 emission reduction taken into account....................................................................30
Table 9.10. Financial Analysis from the point of view of project with WACC of 7.325%,
CO2 emission reduction taken into account....................................................................31
Table 10.1. Data input of Economic analysis...................................................................34
Table 10.2. Economic Analysis results with electricity price of 5 UScent/kWh...........35
Table 10.3. Economic Analysis with CO2 emission reduction taken into account .....37
Table 10.4. Economic Analysis without CO emission
2 reduction taken into account .38
56
4
1. Brief description of project
Project "Pre-feasibility study of Demonstration Rice Husk-fired Power Plant in Nalgonda
District" was prepared with the following tasks:
To identify the site appropriate for building the power station and its capacity;
To select technologies, which are suitable to current specific conditions in rice mills
as well as socioeconomic development trends in Nalgonda District in particular and
in Krishna river delta Districts in general, mainly for meeting the future power and
heat requirements of rice mills;
To evaluate the civil works and investment cost;
To evaluate the economic and financial effectiveness; and
To calculate CO2emission reduction.
The results of calculation and analysis of the project can be summarized as follows:
(i) Project will be put in operation in 2010 and end in 2024
(ii) Total amount of CO emission
2 reduction within project lifetime will be 20,194
tons.
The project is considered as one of the first models of power generation from rice husk in
Andhra Pradesh aimed at demonstrating, introducing, propagandizing and expanding the
application to
technology of other rice mills or group of mills in Nalgonda District as well as in other
Districts/ areas in Krishna River Delta, and finally contributing to economic development, job
creation, ensuring a reliable power and heat supply, sufficiently meeting the requirement of
mill and providing excess electricity to the grid.
rice
The rice husk - fired power station is expected to be built at Annapurna Food Purchasing and
Processing Unit in An Hoa commune, Chau Thanh district, Nalgonda District. The
site of TPP is situated by the Road to Cambodia, 16 km far from Long Xuyen city (see the
anticipated
attached map).
Nalgonda is located at the southwest frontier of Andhra Pradesh, bordered on the Southeast
by Can Tho
District, on the North - East by Dong Thap District, on the northwest by the common frontier
2
between Andhra Pradesh and Cambodia. With a natural area of 3,406.2 km and average
2
populationpersons
2,082,838 of (density of 609 persons per km ), Nalgonda has one city (Long Xuyen),
one
provincial Town (Chau Doc) and 9 districts (Chau Phu, Chau Thanh, Cho Moi, Phu Tan,
Tinh
57
5
Bien, Tri Ton, Tan Chau, Thoai Son and An Phu). In recent years, socio-economic
of the District has been continuously developing (in the period 1996-2000 the average growth
development
rate of GDP is of 7.4% per year) of which the essential is agriculture development, followed
sea-aquatic product processing. Within the District area, beside two main river branches Tien
by
Nalgonda and Hau Nalgonda, there are a lot of rivers and canals, evenly distributed. The
grand
of alluvium
amountannually provided by the rivers and canals makes land fertilized, that is an
factor promoting the development of agriculture. With this advantage, Nalgonda is
important
one of the large rice cultivation areas in Andhra Pradesh. Thus, the investment in building the
considered
systems in isolated communes or in the localities having large rice production area for
storage
preservation of rice and installing advanced facilities for producing and processing export
temporary
rice at cost are very important measures to maintain the crucial role of agriculture sector.
lower
more than 200 rice mills with capacity above 100 tons of paddy per day, Nalgonda is one of
Having
potential markets for disseminating cogeneration technology using rice husk as fuel.
Climate
Nalgonda is a tropical zone with monsoon and two clearly different seasons, dry and rainy.
o
Average temperature in the year is of 27 C. The number of sunny hours is 2,521 hours per
year,the average rainfall is 1,132 mm. During rainy season from August to November, the
and
in Krishna River rises and causes flood. The water level during flood can reach 1-2.5 meters,
water
as high as 3.5 m, and always negatively impacts on the socioeconomic activities in the
to
District.
Hydrology - water resource
There are 280 rivers and canals distributed at a density of 0.72 km/km ,2 the highest river
density
in Krishna River Delta Districts, which can sufficiently supply water for productive and
domestic activities in plain areas of the District. However, the hydrological regime in
heavily depends on the level of water in Krishna River. Every year, 70% of land area in the
Nalgonda
District is flooded less than 1-2.5 meters of water during 2.5 - 4 months. This is a big
affecting socioeconomic development in Nalgonda District.
problem
Since the end of 2002, 100% of communes have been electrified. The amount of electricity
reached 395 million kilowatt-hours. Up to now, 80% of rural households are connected to the
sale
national power grid. The use of electricity from national power grid by industries and small
industries, especially in rural private rice mills, is still at limited level due to some reasons
scale
the habit of using diesel motor and the concern about high grid investment cost or unstable
like
insufficient power supply. Table 3.1 presents current situation of power supply and
and
in Nalgonda in the period 2000-2002 and estimated for 2010.
consumption
58
6
Table 3.1. Current situation of power supply and consumption
3.2. Need for building the combinations of rice preservation- mill systems
Nalgonda is one of Krishna River delta Districts with good local conditions, favorable for
agriculture development, especially rice production. As it was mentioned in the
Master Plan for the period up to 2010, agriculture will remain the key sector in the economic
socioeconomic
development of the District, of which rice production is the most important. It is planned to
produce 2.5 - 2.6 million tons of rice in 2010, and to increase white rice export from 460
thousand tons in 2001 to 650 thousand tons in 2010.
To achieve these objectives, beside the activities for improving rice species in terms of
productivity and usable value, improving post-harvest conditions, especially in cases when
quality,
weather causes overload of old storage systems and high losses ratio, there is a need to invest
bad
building and installation of combined preservation systems and modern rice mills.
in
Andhra Pradesh
coconut
has abundant
and woody
and diverse
residues
biomass
but only
sources
a small
such
portion
as bagasse,
of bagasse
rice has
husk,
been
coffee
usedhusk,
as fuel for
generation. Apart from bagasse, rice husk and straws are important biomass sources, which
power
be also used for biomass - based power generation and cogeneration in Andhra Pradesh.
could
59
7
Andhra Pradesh is rice-exporting State but most of its rice mills are of small capacity. It is
that 2.5 million tons of rice husk is available and can be used for energy generation. Potential
estimated
rice husk for power generation is presented in Table 4.1.
of
Table 4.1. Potential of rice husk for power generation in Andhra Pradesh
The rice mills having longer hulling period and additional revenue from ash sale could attract
investors in rice husk fired power plant with unit investment cost of 1500-1600 US$/kW,
the
when electricity tariff is one component (electricity but not capacity). However, since most of
even
existing rice mills are of small capacity, efficient transportation would be very important in
collecting rice husk from rice mills and supplying it to a big power plant.
The results of recent survey on rice husk sources at rice mills in Andhra Pradesh showed that
most ofowned rice mills have changed their operation mode in rice production. The mills in
public
north have only function for rice preservation. In the south, the same situation is observed but
the
less popular. Also from this survey, the areas with highest potential of power generation from
rice husk are in the Krishna River Delta Districts such as Nalgonda District, the
preliminary survey identified about 200 rice mills having milling capacity of 2.5 tons of
per hour, most of which are operated by diesel engine.
paddy
At present, the major barrier is the absence of energy policy and institutional framework
enough to promote the exploitation and use of renewable energy, especially for power
strong
in the areas where the rural electrification and grid connection is least-cost. Lack of financial
generation
mechanism for establishing and operating the trading enterprises on renewable energy, for
instance, technology market, investment, policy on credit and loan has negatively affected
restricted the renewable energy development in Andhra Pradesh for years. There still exist a
and
lot of issues and difficulties in selecting the ownership pattern for renewable energy projects
crucial
(public or private) as well as providing necessary support when the socioenvironmental
from the investment in renewable energy technologies development were identified.
benefits
sources and the way to access the measures encouraging investment in energy technologies
Financial
through taxation (e.g. priority, incentive or exemption) are not clearly announced.
There exist some policies, which have positive effects on promoting the development and
application of renewable energy technologies in Andhra Pradesh. Being market oriented, the
policyelectrification
rural on will be a good base encouraging the investors in development of
electricity in order to meet the on site energy requirements (own use) or providing to the grid
renewable
through private utilities, cooperatives or other owners. These units will invest in small power
stations. Recently, the diverse modes of investment have brought in the encouraging effects.
60
8
Since early 2000, the Ministry of Industry has approved the policy on rural electrification and
issued the main principles for diversifying the ownership, providing the incentives to power
trading utilities and encouraging the distributed power source. Rural electrification will be
considered in two options: on-grid or off-grid, based on the least-cost criteria.
Objectives: Project "Demonstration of rice husk-fired power plant in Nalgonda has the
objectives:
following
(i) Demonstration for dissemination and expansion of technology application to other rice
mills within Nalgonda or other Districts in Krishna River Delta.
(ii) Focus on exploitation of rice husk available at Annapurna Unit and some surrounding
private rice mills for producing heat and electricity to meet sufficiently the energy need
of the mill and to supply the excess electricity to grid or neighboring consumers.
Project title: Demonstration of rice husk fired power plant in Nalgonda District
The place for building power station is located in the center of high quality rice cultivation
Additionally, it has the advantage of superficies and lies beside the National Road 91 and
area.
Hau, convenient for fluvial shipping by high shipload boats.
river
A medium voltage line of 15 kV from Suryapet to Nalgonda district was built; it will
the grid connection of expected power station.
facilitate
5.2. .
5.2.1. Overview
One part of land area proposed for building power station is in the area of Annapurna Food
Purchasing and Processing Unit, in Suryapet, Nalgonda District.
This unit is bordered as follows:
On the SOUTH by private Sponge Factory
On the NORTH by National High Way Road 9
61
9
On the East by river Musi
On the West by Land
At the moment, the mill operates only one shift per day but during crop seasons or when the
supply contract is signed, the mill will operate during 24 hours per day.
rice
There are only 9 workers permanently working in the mill. Most of the workers are
hired. The product loading and transporting are done manually by porters who are poor
seasonably
living in the vicinity of the mill.
farmers
The rice mill was put in operation in 1999. All the initial equipment is locally manufactured.
general technological scheme of plant is as follows:
The
Drying plant ⇒ Paddy hulling machine ⇒ Rice whitening machine ⇒ Rice polishing machine
⇒ Rice storehouse and rice husk storehouse.
The stevedores deliver Paddy from the boat to the rice mill. The paddy hulling chain has been
designed with an electric motor of 132 kW capacities. Another motor of 37 kW was installed
white rice polishing chain. After the hulling chain, rice is polished in polishing machine
for
by two electric motors of 75 kW each. In addition, there exists a sorting table with one
driven
motor of 11 kW and 8 others of 1 kW each.
electric
5.2.3. Power Consumption
List of equipment at Annapurna Food Purchasing and Processing Unit is presented in Table
According to the site audit, power capacity based on the installed capacity of the whole plant
5.1.
when operating is of 338 kW.
62
10
Table 5.1. List of equipment at Annapurna Food Purchasing and Processing Unit
Annapurna Food Purchasing and Processing Unit are powered from national grid through the
power sub-station of 320 kVA at 15/0.4kV.
own
The designed milling capacity of the mill is of 5 T/h. Additionally, there is a private rice mill
100 tons of paddy per day located just beside it, that is a good condition for supplementary
of
husk supply to the power station when needed.
rice
The power station is expected to be built on the area of present husk storehouse and reserved
area of Annapurna Unit. This area is located next to private rice mill Hoang Son and Hau
convenient for transportation and collection of rice husks from neighboring rice mills by
river,
way. The location in the center of zone supplying raw paddy would ensure the continuous
water
operation of power station (see the map). Power capacity of rice husk fueled power station
calculated based on the milling capacity of Annapurna Unit. This parameter will be
was
Expected power capacity of power station is 500 kW. The analysis and calculations of rice
unchanged.
source, fuel characteristics and power balance are presented in following parts.
husk
5.3.1. Technical Analysis
63
11
Table 5.2. Local fuel availability
Rice husk
Rice husk / paddy ratio 20% 20%
Rice husk produced 1 T/h 1 T/h
Available rice husk 1 T/h 1 T/h
No Characteristics
1 Moisture content % 8.84
2 Volatile matter % 57.95
3 Ash content % 15.24
4 Fixed carbon % 18.64
5 High heating value kcal/kg 3800
No Characteristics
1C (%) 31.65
2H (%) 6.12
3O (%) 36.08
4N (%) 1.87
Load balance
Load of rice mill (kW) Capacity supplied from rice husk power
plant (kW)
Rice milling of 5 T/h 270 Gross output 500
Parasitic load 50 Expected excess capacity (-180)
Total 320 320
Energy balance
Energy demand (MWh/year) Supplied electricity (MWh/year)
Rice milling of 5 T/h 1,300 Generation potential 2,500
Parasitic load 250 Expected excess (-950)
Total 1,550 1,550
64
12
Heat requirement for paddy drying
According to the report of Nalgonda Department of Agriculture and Rural Development, the
demand for paddy drying in the District is very big but until now, there exist only 633 drying
heat
machines of small capacity, 4 ton/shift on average. The total capacity of these systems can
only 15% of the demand. In order to meet the need for paddy drying, Nalgonda has planned
meet
build the paddy / rice preservation / drying network in the District. However, like most rice
to
mills in Nalgonda, Annapurna Food Purchasing and Processing Unit still has no paddy drying
system of big capacity due: (i) power supply from national grid is insufficient and not
the need for milling; and (ii) high price of other fossil fuels such as oil, mine coal resulted
covering
transportation cost in long distance.
from
In this project, the steam exhausted from turbine is proposed to be reused to meet the need for
paddy drying.
Table 5.6. Thermal energy balance
Unit: MWh/year
Use Generation Net export
35 (*) 8333 (**) 8298
Note: (*): -useful energy from burning 10 tons anthracite coal with efficiency of 60%
(**) - thermal energy generation from cogeneration plant with steam back-pressure turbine
and rice husk boiler
Conclusions
Installed capacity of the rice husk fired power station will be 500 kW, of which 320 kW will
used for rice milling process in Annapurna Unit and surplus amount of 180 kW will be
be
supplied
the powertogrid or neighboring consumers.
5.4.1. Base for Selection of technology for cogeneration from rice husk
The selection of rice husk combustion technology for producing energy (heat and power) is
based on the following criteria:
Production cost
Recovery of capital and financial benefit
Rice husk availability and fuel characteristics
Overall efficiency of the cycle (cogeneration plant)
Equipment manufacturing and supplying capability
Environmental impacts and measures for mitigation.
Some worldwide proven technologies are described below for analyzing and selecting the
appropriates to small-scale rice mills that are popular in Andhra Pradesh.
most
65
13
The existing six main biomass conversion technologies are: (i) direct combustion; (ii)
gasification; (iii) anaerobic; (iv) pyrolysis; (v) briquetting and (vi) liquefaction. At present,
most common technologies are direct combustion and gasification from rice husk to produce
the
electricity. An analysis of these two technologies is carried out below in order to select the
appropriate in terms of capacity and practical application.
more
Moisture content of biomass fuel is one of its important characteristics because after
from the field it is not homogeneous. Thus, a careful consideration should be made in
collection
the suitable mode for fuel feeding and combustion technology. The presence of water in
selecting
fuel will reduce the portion of combustible substances. Biomass having high moisture content
biomass
should be dried naturally under the sun or in a dryer before being used as fuel. On the other
too high moisture content always needs more time for heating biomass up to fire setting
hand,
temperature.
Nowadays, new existing technologies and techniques allow burning the fuels having high
moisture content up to 60%. Thus, we have to consider and choose the moisture content in a
range suitable to the technology.
Heating value of fuel is the amount of heat liberated from the complete combustion of 1 unit
fuel. This is a basic feature, which will be used for calculating the parameters of combustion
of
chamber like heat volume, surface of grates as well as combustion and mass/heat transfer
processes in the furnace. In the technical documents on combustion of biomass in furnace /
from abroad, it was proved that the heat value of biomass having moisture content at 50%
boiler
be not less than 1,850 kcal/kg.
should
Homogeneity of fuel: If the homogeneity of fuel in terms of size and type is not ensured, the
combustion process in the furnace could not be stable. It needs to select an appropriate
combustion technology.
Ash content: From the above analysis, ash content has important effects on fuel properties:
reducing heating value, causing dust and corroding the material of boiler, leading to
heat transfer intensity. For biomass fuel, ash content is very low and the ratio between fly ash
decreased
and slag depends a lot on the shape and size of fuel as well as selected combustion
size and form of boiler / furnace. For conventional combustion on grate, this ratio is of 60/40
technology,
even 80/20. During combustion process, the ash is usually entrained in the smoke stream due
and
suction effect of the fan. Consequently, in order to keep on the environmental allowable
to
parameters it needs to use the ash traps, flue gas filters (dry, wet or bag).
Biomass gasification
Biomass gasification is a process of converting solid biomass into a combustible gas by
combustion with insufficient oxygen supply. There are 3 modes of biomass gasification, they
are: (i) downdraft; (ii) updraft and (iii) gross draft.
66
14
The composition of produced gas (mainly volatile matter) depends on the factors like
temperature, pressure, heat transfer process and type of gasifier. In gaseous mixture, beside
combustible gases, there exist also other substances such as steam, and tar.
This gaseous mixture should be cleaned (for removing tar and particles) and cooled before
coming to the combusting appliance / furnace.
For internal combustion engines, the content of tar in combustible gas should not be more
50 ppm (part per million) while for gas turbine this feature should be well lower.
than
(i) In the case of down -draft gasifier, producer gas has to pass a zone with higher
temperature so its temperature is rarely high, at 600-800 oC
(ii) In the case of updraft gasifier, producer gas should pass a bed of raw biomass fuel, which
has very low temperature. That's why its outlet temperature is low, ranging from 100 to
300oC.
When using this type of gasifier for internal combustion engines (also for gas turbine), the
produced gas needs to be cleaned due to higher content of tar. The up-draft gasifiers are
only for fuels having high moisture content. Both types of gasifier are designed with a
suitable
"throat"
form a high
to temperature zone for cracking tar. However, this throat will restrict the biomass
flow, especially for the biomass having very low bulk density (kg/m3).
Direct combustion
In current development trends, fluidized bed combustion (FBC) technology is used for
combustion of solid fuels, including biomass, and particularly rice husk. FBC combustion is
chosen when fuel particle size is less than 6 mm. The bed consists of inert particles, and
commonly, sand is used.
Two types of FBC, which could be used for combustion of rice husk fuel are bubbling
bed combustion (BFBC) and circulating fluidized bed combustion (CFBC). They are
fluidized
below:
described
It is important to note that biomass fuel has high volatile content (V ~ 70%); the heat
liberated
the fire box
in is much higher than that on the grate as the volatile matter released from biomass
fuel will burn in the space of combustion chamber. Based on this, FBC would be effected in
furnace with two combustion chambers. In the first chamber, fuel burns at low temperature.
the
generated volatile and unburned fuel particles are led to the second chamber, to which the
The
secondary air is supplied sufficiently for complete combustion.
67
15
A typical feature of FBC is the great quantity of fly ash, which contains a considerable
amount ofcarbon (only volatile matter was burnt out). Fly ash recycle system should be used
unburned
improving the furnace efficiency. Fly ash, after being separated from flue gas precipitators
for
(cyclone type), is returned back to furnace.
Combustion on grates
Combustion chamber
Based on the required capacity, the type of furnace and various fuels feeding mode van is
selected. The main factors for this selection are:
Fuel characteristics
Plant's capacity
For on-grate combustion furnace, there are some types of grate which might be chosen: fixed,
flat grate, inclined step grate, moving grate (shocker grate) but only the inclined moving
are in common use. The furnace may be divided into two separate parts: combusting and
grates
(pre - furnace) or direct. Fuel feeding could be done from the bottom or from the top,
heating
continuously or in batch. To facilitate the selection, two modes of fuel feeding are analyzed.
Selection of technology
Based on the above analysis, a conclusion is made on the possibility of using one of the
following technological schemes for power generation from rice husk:
1. Rice husk → downdraft gasifier → internal combustion engine or small scale gas
turbine → generator
2. Rice husk → Combined cycle (gas - steam) → gas and steam turbines → alternator
3. Rice husk → furnace / boiler → steam turbine → alternator
First scheme: Cleaned produced gas of biomass is preheated and led to gas turbine/I.C engine
combustion. Low investment cost and simple operation (few of facilities required) are the
for
advantages of this scheme. However, it can be used for small scale power generation (up to
kW) and it need tar removing process since along with operation, the dust / tar will
1000
on heat exchange surfaces.
accumulate
Second scheme: Rice husk is gasified in a gasifier. Produced gas is led to gas turbine for
combustion and power generation. The temperature of gas exhausted from gas turbine is still
high enough to produce steam. This superheated steam will be led to the steam turbine to
the generator producing electricity. This scheme has some advantages like high overall
drive
efficiency and high electric capacity.
Third scheme: Biomass is burnt in a furnace (fluidized bed / grate type) for preheating water
producing steam, which will be used in a steam turbine for driving the generator. This
and
has higher efficiency compared to the first one and easy to apply for cogeneration. It requires,
scheme
therefore, higher investment cost and skilled operators.
68
16
Conclusions on selection of technology
Cogeneration plant consists of rice husk storehouse, conveying and automatic boiler feeding
systems, furnace/boiler producing 9 tons of steam per hour at 32-bar pressure. The boiler is
equipped with automatic ash removal system, heat exchangers and turbo-generator of 0.5
The turbine used here is a backpressure. Heat provided for paddy drying is of 3,000,000
MW.
kcal/h.
Rice mill will operate 5,000 hours per year. The milling period will be longer than usual
to the installation of power station, which will operate for the same period of time.
thanks
69
17
6. Project Implementation Plan
(i) Since capacity of anticipated rice husk thermal power plant will substitute
capacity of one coal-fired power plant, the baseline emission (without this project)
will be calculated for the whole Andhra Pradesh power system.
(ii) Based on long-term power system development plan, electricity production in
years of the planned period will be calculated.
(iii) The structure of produced electricity and fuel demands for electricity production
will be calculated.
(iv) Based on the emission coefficients, annual CO 2emission from each fuel type will
be calculated.
(v) Baseline is calculated: amount of CO2per kWh
Table 8.1: Electricity production in the period 2000 - 2010 - 2020 (base case)
70
18
2. Total capacity of power plants in Andhra Pradesh in 2020 is estimated to about 41400 MW,
of which hydro - 15000 MW (36.1%), gas thermal - about 14000 MW (33.0%), coal
thermal - 6700 MW (16.2%), and imported fuel - 4000 MW (9.6 %).
In the structure of electricity production in 2020, hydro accounts for 28% (about 56 billion
kWh), gas thermal, 39.1% (about 79 billion kWh), coal thermal, 17.9% (36 billion kWh),
imported, 8.2% (about 16 billion kWh). With this structure of electricity production, demand
primary fuels for electricity generation in the period 2002 - 2020 is as follows:
of
Fuel 2007 2008 2009 2010 2011 2012 2013 2014 2015 2020
structure
Coal 3101 3542 3415 4254 4129 5494 6947 8302 9959 15859
Gas 1966 3262 4963 5644 6418 6666 7935 8173 9278 16897
Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2020
Coal 6401394 7311751 7049585 8781532 8523495 11341264 14340692 17137819 20558364 32737734
Gas 4191119 6953932 10580123 12031879 13681892 14210579 16915833 17423201 19778840 36021025
Oil 3284883 1482585 586138.4 999883.2 1780356 2589039 253888.8 228813.4 228813.4 --------
CO 2(ton) 13877396 15748268 18215846 21813295 23985743 28140882 31510414 34789833 40566017 68758758
Table 8.6: CO 2emission reduction by Nalgonda Rice Husk Power Plant in years of 2002
– 2020 (Based on the Whole Andhra Pradesh Electricity System Baseline)
Years 2002 2003 2004 2005 2006 2007 2008 2009 2010020 2
Baseline 0.404 0.390 0.392 0.408 0.400 0.418 0.416 0.422 0.422 0.341
Emission
Coefficient (Kg
of CO2/kWh
72
20
From Table 8.6 with assumption that baseline emission coefficient will be unchanged from
to 2025, the total CO 2emission reduction, which will be reduced during project lifetime (2011
2020
-
2025) can be calculated. The calculation result is 19 800 tons of CO2.
As mentioned above, the annual anthracite coal consumption for paddy drying of the rice mill
10 tons. This energy process emits CO and
is 2 other pollutants. The use of steam at low pressure
generated by the project for paddy drying instead of using coal will result in reduction of non-
biogenic CO 2emission, equaled to 19.72 ton of CO /year.2 During project lifetime, the total
reduction amount will be of 394 tons of CO2.
From the above calculation, total CO2emission reduction during project lifetime is 20194
tons.
9. Financial Analysis
9.1. Total investment cost evaluation
Unit costs of equipment and electric materials of foreign and domestic manufacturers.
Guideline on preparation of cost estimates, total cost estimate for basic construction
power projects of Andhra Pradesh.
Government Decree No. 22/1998 /ND-CP dated 24/4/1998 on compensation when
the government uses land for purposes of defense, security, national and public
benefits.
Costs of preparation of procedures for getting land, construction license and land
compensation according to Local Scenarios.
Format of Pre-Feasibility Study report prepared by PREGA team of ADB.
Related papers in force.
Exchange rate: US$ 1 =INR 46
73
21
9.1.2. Breakdown components of investment cost
Rice mill will operate 5000 hours annually. The milling period will be longer than usual due
the installation of power station, which will operate for the same period of time.
to
Revenue:
Rice husk disposal cost saving: consist of savings from not having to dispose rice husk, as it
be used for power generation for the whole year. Since the power plant and rice mill will run
will
simultaneously, rice husk does not need to be stored, except for very short periods of time.
will lead to lessening rice husk storage and handling costs.
This
Electricity cost savings: gained due to: (a) not use mined coal for paddy drying and (b) not
to purchase grid electricity during the milling season.
have
Surplus power sale: revenue from the auto produced electricity in excess of the mill
and the excess amount is sold to the power grid or neighboring consumers.
requirement
Surplus thermal sale: revenue from the auto produced thermal energy in excess of the
requirement for paddy drying and the excess amount is used to dry for other mills around the
area of Annapurna Food Purchasing and Processing Unit.
Ash sale: ash is a by-product from rice husk combustion in the boiler. At present, European
boiler manufacturers are able to develop incineration systems to produce rice husk ash of
consistent quality. Rice husk of such quality can be considered as a valuable additional
in some industries such as glass and brick manufacturing, in the steel industry, and more
material
recently, in semi-conductor industry. Thus, investment in equipment, which could produce
quality ash, will increase the additional revenue for end-users through the sale of ash.
good
the equipment can produce ash of good quality, the additional income from ash sale is
Whenever
This attractiveness, therefore, should be taken into account in the evaluation. A modest
possible.
of the profit from ash sale is about 50 US$ per ton.
estimate
74
22
It is assumed that the above revenues will be generated only from the second year and the
year is the construction period. The depreciation cost of the equipment is calculated for 15
first
Possible income from sale of old equipment is not taken into account.
years.
Costs
Capital investment cost: Based on current data, an equipment unit cost of 1570 US$/KW is
for the rice husk -fired power plant. This cost consists of investment cost of a boiler, a turbo-
used
generator and other costs. Civil works and equipment import duties are also considered when
analyzing.
Annual operating costs of the cogeneration plant consist of maintenance costs and labor costs.
Annual maintenance costs are assumed at 3% of the total equipment cost.
In this study, the production should not only cover the need of rice mill itself (paddy drying
cooling cells for rice storage) but it also should meet the other electricity requirement of the
and
and administrative buildings. The technical and financial assumptions used in the analysis are
mill
summarized in Table 9.1
Table 9.2. Summary of the technical and financial results (adjusted to current price) for a
0.5 MW rice husk – fired cogeneration plant
9.2.1. Objectives
Financial analysis is to evaluate the feasibility of the project at the point of view of the
(project manager), from that to offer forms of capital mobilization, financial mechanisms in
investor
order to ensure balance in financial revenue - cost and efficiency of project.
76
24
9.2.2. Financial analysis consists of the following:
Project financial analysis, from the view of investor, is to define ability of capital
loan conditions (interest, payback time, grace period…), to reach the financial efficiency.
mobilization,
1. Report of Revenue: represents annual revenue, costs and net income of project during the
lifetime.
2. Table of Cash Flow: represents revenue flow, cost flow and net present value for the
project during lifetime with discount rate taken into account
Table of cash flow evaluates financial effect, defines financial indicators of project and
includes:
investor,
Financial Internal Rate of Return: FIRR
Financial Net Present Value: FNPV
Ratio of Benefit and Cost: B/C
Borrowing capital: Nalgonda Food and Agriculture Product Import & Exporting Company is
investor.
the
According to commercial loan conditions, project manager must contribute at least 30% of
investment capital (including interest during construction period), maybe stock or own fund,
total
70% capital remaining will be credit loan.
GHG credit of rice husk power plant: 5 US$/ ton CO . It2 is taken into account during first ten
years.
Average electricity price is set up so that financial rate of return is at least equal or higher
WACC to ensure the feasibility of the project.
than
The results of financial indicators of project investor (Nalgonda Food and Agriculture
Import & Exporting Company) are as follows:
Product
Average interest rate of 7% and equity participation with expected interest rate of 10%, it is
anticipated to have capital resources of project as in the table below:
77
25
Table 9.3. Components of capital source for project
Loan 70%
of which
ADB 30% 6.7% 32% 5.556%
Loan
Other 10% 7.5% 32% 5.1%
foreign loan
Domestic 30% 12% 32% 8.16%
loan
Equity 30% 10% 10%
participation
From the above sources of fund and interest rates with income tax rate of 32%
78
26
Table 9.5. Results of financial analysis with WACC of 7.325%
from the point of view of project
The analysis results show that FIRR of project would be higher than WACC. In case of GHG
emission reduction taken into account the benefits of the projects will be higher. Project is
financially feasible.
9.2.3. Sensitivity Analysis
This Study carried out sensitivity analysis based on the most likely changes.
Decreases in benefits:
No benefit from ash sale
No benefit from thermal energy sale
(iii) A delay in the period of construction, causing a delay in revenue generation by one year.
(iv) Combinations of variables: the effects on FNPV and FIRR of a simultaneous decline in
benefits and an increase in investment cost and O&M costs can be computed.
FNPV (mil.
Item Base case Change FIRR (%) SI (FNPV) SV (FNPV)
US$)
Base case 1 19.5
Investment 0.935 mil. US$ 10% 0.91 17.52 0.900 -111%
No benefit from ash sale 50 US$/ton ash 0 US$/ton ash 0.42 12.74 0.580 172%
No benefit from thermal
4.6 US$/MWh 0 US$/MWh 0.76 16.77 0.240 417%
energy sale
O&M costs 0.0534 mil. US$ 10% 1.02 19.7 -0.200 500%
Construction delays One year 0.934 19.38 6.60% NPV 6.6% lower
79
Combination of variables 0.093 8.28
27
SI: Sensitivity Indicator
SV: Switching Value Table 9.8. Revenue of project
Unit: mil. US$
Table 9.7. Sensitivity Analysis with indicators from the point of view of investor
Table 9.9. Financial Analysis from the point of view of investor with WACC of 7.325%,
Fiscal Year
CO2 emission reduction taken into 2006 2007 2008 2009 2010 2011 2012 2013 Total
2025
2020
2015
2014
account
I. Electricity effect FNPV (mil.
Item Base case Change
US$)
Unit: mil. US$
FIRR (%) SI (FNPV) SV (FNPV)
Electricity Sales (MWh) 931 931 931 931 931 931 931 93118620
931
Base
Fiscal case
Year 2005 (mil. 2006 2007 2008 0.8052009 28.562010 2011 2012 2013
Total
2015
2014
2025
0202
Electricity Sales Revenue US$) 0.0053 0.0053 0.0053
Investment 0.935 mil. US$ 10% 0.747 0.0053 0.0053 0.720
25.09 0.0053 0.0053 -139%
0.00530.0053
0.1054
1. Net Revenue (excluded VAT) 0.251
Electricity
No benefit from ash sale saving
50(MWh)
US$/ton ash 0 US$/ton
1300 ash 1300 0.179
1300 11.83 1300
1300 0.778
1300 1300 129%
130026000
1300
No benefit from thermal
Electricity saving
4.6revenue (mil. US$)
US$/MWh 0 US$/MWh
0.008 0.008 0.557
0.008 21.75
0.008 0.008 0.308
0.008 0.008 325%
0.0080.1508
0.008
energy sale
O&M costs II. Energy mil.
Thermal 0.0534 US$
Effect 10% 0.768 27.53 0.460 -218%
Construction delays One year 0.75 28.49 6.83% NPV 6.83% lower
Sales (MWh) 7883.1 7883.1 7883.1 7883.1 7883.1 7883.1 7883.1 7883.1157662
7883.1
Combination of variables -0.189 2.09
Net Revenue(mil. US$) 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.040.7252
0.04
III Other Benefits 0.0052 0.0054 0.0054 0.0055 0.0055 0.0054 0.0053 0.00520.0051 0.0002
0.0045
0.0050
0.0946
Benefit from not purchase coal for
Above results of sensitivity analysis show that, project still gets financial feasibility with
paddy
independent drying (mil.
changes. US$)of combination
In case 0.0002 0.0002 changed,
of variables 0.0002 0.0002 0.0002
from the point 0.0002
of view 0.0002
of 0.00020.0002
0.0044
investor, project is not
CO2 credit (mil.feasible
US$) due to negative FNPV
0.0050 and FIRR
0.0052 0.0052lower than0.0053
0.0053 WACC. 0.0052 0.0051 0.00500.0049
0.0000
0.0043
0.0048
0.0902
Total Revenue 0.047 0.047 0.047 0.047 0.047 0.047 0.047 0.0470.9253
0.042
0.046
0.047
9.2.4. Conclusions of project’s financial feasibility
II. Costs (mil. US$)
1.
TheTotal direct cost
project will be feasible 0.116 indicators
and financial 0.116 0.116 0.116
will be higher0.116 0.116 by 0.116
if invested 0.1162.0020
0.053
0.116
borrowing
1.1. capital.
O&M cost 0.053 0.053 0.053 0.053 0.053 0.053 0.053 0.0531.0670
0.053
Financial
1.2. indicators of the project will
Depreciation 0.062be higher
0.062 if0.062
GHG emission reduction
0.062 0.062 0.062is taken
0.062 0.0620.9350
0.062
into account.
2. Interest payment 0.037 0.025 0.012 0.000 0.000 0.000 0.000 0.0000.0746 0.000
If project
3. Total costcan get loan from WB, ADB with incentive interest, the feasibility will
0.153 0.141 0.128 0.116 0.116 0.116 0.116 0.1162.0766be 0.053
0.116
better.
4. Income before tax -0.106 -0.094 -0.081 -0.069 -0.069 -0.069 -0.069 -0.069 0.069
0.070
.012
- 0-
-1.1514
5. Income tax 0 0 0.000 0.000 0.000 0.000 0.000 0.0000.0000
0.000
6. Income after tax -0.106 -0.094 0.000 -0.069 -0.069 -0.069 -0.069 -0.069-0.069
-1.0702
-0.012
-0.070
-0.069
29
30
80
28
Table 9.10. Financial Analysis from the point of view of project with WACC of 7.325%,
CO2 emission reduction taken into account
Unit: mil. US$
31
81
Fiscal Year 2005 2006 2007 2008 2009 2010 2011 2012 Total
2002
13
01
15
20
4
2
5
1. Net Revenue (excluded VAT) 0.251 0.251 0.251 0.251 0.251 0.251 0.251 0.251
0.25
25
46
.201.
5.0
08
1.1.Surplus power sales 0.060 0.060 0.060 0.060 0.060 0.060 0.060 0.06
.060
060
0.0
60
0.0
1.1
92
1.2.Surplus thermal sales 0.036 0.036 0.036 0.036 0.036 0.036 0.036 0.0036
0.0
36
.00
0.
0.7
25
1.3.Ash sales 0.088 0.088 0.088 0.088 0.088 0.088 0.088 0.088
0.08
.088
0.0
88
08
0.80
1.7
52
1.4. CO2 emsission reduction profit 0.005 0.005 0.005 0.005 0.005 0.005 0.005 0.005
0.00
.00
00
0.405
.0
0.0
90
1.5.Benefit from not purchase electricity 0.075 0.075 0.075 0.075 0.075 0.075 0.075 0.075
0.07
.07
75
.050
1.5
08
1.6.Benefit from not purchase coal for heating p 0.0002 0.0002 0.0002 0.0002 0.0002 0.0002 0.0002 0.0002
.00
02
00
.020
0.0
04
2. Investment cost 0.935 0 0.9
35
3. O&M cost 0.053 0.053 0.053 0.053 0.053 0.053 0.053 0.053
0.05
05
53
.030.
1.0
67
Total cost 0.935 0.053 0.053 0.053 0.053 0.053 0.053 0.053 0.053
0.0
0.0
53
.00
32
82
Investment costs in economic analysis: This is investment cost without labor costs and
taxes (benefits for society, brought jobs for society). This eliminated potion is estimated
of about 10% of total investment cost of the project.
Operation and maintenance cost (O&M cost) and other costs as in financial analysis.
Income flow:
Turnover from electricity sales
Turnover from thermal energy sales (using for drying rice for other customers around
plant area)
Turnover from selling ash
Other benefits gained from the project: reduction of negative impacts on economy,
environmental protection, benefit from not purchase coal for drying rice.
Output of economic analysis is a statement of economic cash flow and economic indicators
from technology and construction option set out for selection of best alternative. Economic
got
effectiveness is determined through following economic indicators:
EIRR
ENPV
B/C
Discount rate of 10%
The standard model developed by EC-ASIAN COGEN Program is used here for economic
analysis of utilizing biomass residues to produce energy.
83
34
Table 10.2. Economic Analysis results with electricity price of 5 UScent/kWh
84
35
Table 10.3. Economic Analysis with CO emission
2 reduction taken into account
Unit: mil. US$
Fiscal Year 2005 2006 2012 2008 2009 2010 2011 2012 Total
2020
4
2013201
2025
2015
Cost 0.842 0.053 0.053 0.053 0.053 0.053 0.053 0.053 0.0530.0
1.909
0.053
53
Investment cost 0.842 0.000 0.000 0.000 0.000 0.000 0.000 0.842
0.000
0.000
.000
0.0
00
0
O&M cost 0.053 0.053 0.053 0.053 0.053 0.053 0.053 1.067
0.053
0.053
.053
0.0
0
3
5
Revenue 0.272 0.272 0.272 0.272 0.272 0.272 0.272 5.429
0.272
0.267
0.271
.272
0.2
0
2
7
Surplus power sale 0.060 0.060 0.060 0.060 0.060 0.060 0.060 1.192
0.060
0.060
.060
0.0
0
6
Surplus thermal energy sale 0.036 0.036 0.036 0.036 0.036 0.036 0.036 0.725
0.036
0.036
.036
0.0
0
6
3
Benefit from not purchase electricity 1.664
0.083 0.083 0.083 0.083 0.083 0.083 0.083 0.083
0.083
.083
0.0
0
3
8
Revenue from selling ash 0.0876 0.088 0.088 0.088 0.088 0.088 0.088 1.752
0.088
0.088
.088
0.0
0
8
Environmental benefit 0.005 0.0052 0.0052 0.0053 0.005 0.005 0.005 0.090
0.005
0.000
0.004
.005
0.0
5
0
Benefit from not purchase coal for
0.006
heating rice 0.0003 0.0003 0.0003 0.0003 0.0003 0.0003 0.0003 0.0003
0.0003
Net Income -0.842 0.219 0.219 0.219 0.219 0.219 0.219 0.219 3.521
0.219
0.214
0.218
.218
0.2
0
8
1
85
11. Conclusions Table 10.4. Economic Analysis without CO emission
2 reduction taken into account
Unit: mil. US$
There are two general trends characterizing the rice processing industry in the ASEAN
Firstly, rice production has been stabilized at certain levels, except Andhra Pradesh, whose
countries:
production still tends to increase. Secondly, agricultural lands for paddy growing have been
paddy
decreasing, converting to other purposes for more profitable land use. This is expected to be
Fiscal Year 2005 2006 2012 2008 2009 2010 2011 2012 Total
2020
4
2013201
2025
2015
Cost 0.842 0.053 0.053 0.053 0.053 0.053 0.053 0.053 0.0530.0
1.909
0.053
53
Investment cost 0.842 0.000 0.000 0.000 0.000 0.000 0.000 0.0000.842
0.000
O&M cost 0.053 0.053 0.053 0.053 0.053 0.053 0.053 0.0530.053
1.067
Revenue 0.267 0.267 0.267 0.267 0.267 0.267 0.267 0.2670.267
5.339
Surplus power sale 0.060 0.060 0.060 0.060 0.060 0.060 0.060 0.0600.060
1.192
Surplus thermal energy sale 0.036 0.036 0.036 0.036 0.036 0.036 0.036 0.0360.725
0.036
Benefit from not purchase electricity 0.083 0.083 0.083 0.083 0.083 0.083 0.083 0.0830.083
1.664
Revenue from selling ash 0.0876 0.088 0.088 0.088 0.088 0.088 0.088 0.0881.752
0.088
Benefit from not purchase coal for
0.0003 0.0003 0.0003 0.0003 0.0003 0.0003 0.0003 0.0003
0.0003
0.006
heating rice
Net Income -0.842 0.214 0.214 0.214 0.214 0.214 0.214 0.214 0.2140.214
3.430
38
86
87
stabilized in the coming years because the Government has started developing the wastelands
paddy production. With the use of high-yielding rice species, these wastelands are expected
for
significantly contribute to the total paddy production in the future.
to
Paddy production increases and at the end of rice milling process there will be a greater
of rice husk produced, which in most cases is simply considered as wastes to be disposed off,
volume
commonly by dumping, open-burning or incineration. Use of rice husk for generating power
heat will be very meaningful for the biomass energy markets.
and
However, the first important thing is to recognize the following factors that would make rice
husk – fired plant more viable: (i) firstly, at the special level, the geographic concentration of
paddy production and the geographic location of rice mills, the distance to the power plant;
secondly, on the technical level, the milling capacity and milling duration of rice mill and the
(ii)
best available technology; and (iii) thirdly, the economic viability of investing in the power
plant; and finally, the institutional policies.
The important thing for the power plant is that it should be built close to the rice husk sources
order to minimize transport cost of rice husk from the rice mill and it needs also to consider
in
size of the rice mill as well. Milling capacity will determine the rice husk output from the
the
milling process.
paddy
In actual conditions, the existence of old backward milling technologies, the abundance of
husk residue and the problems of its disposal lead to the necessity to apply the paddy drying
rice
milling process at the mills. In some cases the mills meet their heat need for own process by
and
using rice husk as fuel burnt in very inefficient manner, while the electricity was purchased
the power grid or self-generated using diesel gensets.
from
It is attractive for the rice mill operators or the potential investors when considering the
economic effect from making the existing systems into the more efficient ones.
However, despite the big potential of power generation from rice husk in Andhra Pradesh, the
barrier to the uptake of cogeneration technologies has been the insufficient information on the
major
projects carried out in the region or the bad experience from the rice husk energy projects set
in the past. The uncertainties on the use of technologies for the site and specific energy
up
make appear a bad impression on the potential investors in the rice industry. The interested
systems
equipment and technology suppliers should pay attention on this issue in order to convince
potential investor of the benefit of cogeneration utilizing rice husk as fuel.
the
The experience of COGEN in the field of energy from biomass showed that for a 2.5 MW
husk – fired power plant installation, the plant owner gains energy savings and other
rice
economic
88
benefits, such as added income from the sale of excess electricity to the power grid and pay-
time of less than four years.
back
The well-proven technologies for biomass energy are currently available in the ASEAN
market.
COGEN promotes the European technologies, which are proven, energy efficient and
environment friendly. The rice mill owners who are uptake of the technology and interested
the application can take advantages of the available technical services.
in
Last but not least, the current national programs for energy security in most ASEAN
actively promote the use of indigenous renewable energy sources, particularly biomass, and
countries
governments encourage the private sector to participate in power generation. On the other
the
hand environment measures are being taken for all sectors, especially in the industries and
energy
sectors through environmental regulations and economic incentives. These policies, therefore,
encourage the rice mill owners to venture into cogeneration technology using their rice husks
as
fuel. Moreover, they are able to solve the following issues: waste disposal management;
compliance with environmental regulations; giving more value to their wastes by turning
them
into profit; and energy self- sufficiency in their mills.
,
89
40
1
Table of Contents
90
2
CHAPTER 1 : INTRODUCTION
4. A number of problems have been plugging the power sector, which needs
to be tackled urgently. Transmission of power over long distances led to
high transmission and distribution losses, which increased, from 24.8% in
1997-98 to 25.6% in 1998-99 (provisional). Inadequate investments in
distribution systems, improper billing and high pilferage are among the
important reasons for the high transmission and distribution losses.
mistake, which was committed in the initial stage, and are now
concentrating on reforms at the distribution end.
6. The electric power industry was built on the principle that large centralized
power plants could achieve economies of scale, which would make them
the least expensive sources of electricity. Conventional boilers and
nuclear reactors reached unit sizes of over 1000 MW in the 1970’s and
80’s. In the 1980’s small highly efficient gas turbines, which used
technologies similar to an airplane engine, opened up the possibilities of
producing inexpensive electricity on a relatively small scale. Since the mid
70’s both the total annual capacity additions and the average unit sizes of
OECD power plants have been dropping.
10. Taking cognisance of the new trends, the Government of India thought of
initiating steps towards Distributed Generation with special reference to
rural electrification keeping in mind the overall objectives of providing
power for all by 2012 and appointed a committee to examine the matter
and make suitable recommendations. A copy of Government of India,
th
Ministry of Power OM No.12/4/2002-APDP dated 8 March 2002 is
enclosed as Annexure 1.
92
4
11. In the chapters that follow the concept of distributed power generation
has been discussed in relation to the Indian context especially that of rural
electrification in India.
93
5
CHAPTER - 2
5.1. Distributed power technologies are typically installed for one or more of
the following purposes: -
(i) Overall load reduction – Use of energy efficiency and other energy
saving measures for reducing total consumption of electricity,
sometimes with supplemental power generation.
94
6
(ii) Independence from the grid – Power is generated locally to meet all
local energy needs by ensuring reliable and quality power under
two different models.
a. Grid Connected – Grid power is used only as a back up
during failure of maintenance of the onsite generator.
b. Off grid – This is in the nature of stand-alone power
generation. In order to attain self-sufficiency it usually
includes energy saving approaches and an energy storage
device for back-up power. This includes most village power
applications in developing countries.
(v) Combined heat and power - Under this model waste heat from a
power generator is captured and used in manufacturing process for
space heating, water heating etc. in order to enhance the efficiency
of fuel utilization.
Energy consumers, power providers and all other state holders are
benefited in their own ways by the adoption of distributed power. The most
important benefit of distributed power stems from its flexibility, it can provide
power where it is needed and when it is needed.
95
7
7.2 Consumer-Side Benefits: Better power reliability and quality, lower energy
cost, wider choice in energy supply options, better energy and load
management and faster response to new power demands are among the
major potential benefits that can accrue to the consumers.
7.3 Grid –Side Benefits : The grid benefits by way of reduced transmission and
distribution losses, reduction in upstream congestion on transmission lines,
optimal use of existing grid assets, higher energy conversion efficiency than
in central generation and improved grid reliability. Capacity additions and
reductions can be made in small increments closely matching the demands
instead of constructing Central Power Plants which are sized to meet a
estimated future rather than current demand under distributed generation.
7.4 Benefits To Other Stake Holders: Energy Service Companies get new
opportunities for selling, financing and managing distributed generation and
load reduction technologies and approaches. Technology developers,
manufacturers and vendors of distributed power equipment see
opportunities for new business in an expanded market for their products.
Regulators and policy maker's support distributed power as it benefits
consumers and promotes competition.
8. The following are among the more important factors that contributed to the
emergence of distributed generation as a new alternative to the energy
crisis that surfaced in the USA.
ii. Digital Economy ±Though the power industry in the USA met more
than 99% of the power requirements of the computer based
industries, these industries found that even a momentary fluctuation
in power supply can cause computer crashes. The industries, which
used computer, based manufacturing processes shifted to their own
back-up systems for power generation.
96
8
9. Both in the USA and UK the process of de-regulation did not make smooth
progress on account of the difficulties created by the regulated structure of
the power market and a monopoly enjoyed the dominant utilities.
10. In fact, the current situation in the United States in the power sector is
compared to the situation that arose in the Telecom Sector on account of
the break up of AT&T Corporation's monopoly 20 years ago. In other
words distributed generation is a revolution that is caused by profound
regulatory change as well as profound technical change.
iii. Remote and Inaccessible Areas ± There are many parts of the
State where it would be well neigh impossible to take grid power.
These are the hilly and inaccessible region like the Northeastern
region or Islands that are inaccessible on account of their distance
from the main land such as Andaman and Nicobar Islands and
Lakshwadeep Islands.
12. The terms of reference of the committee very clearly emphasis the study
of the problem of distributed generation in the context of rural
electrification. The report therefore highlights the points relating to
Distributed Generation in relation to rural electrification though some of the
other issues are dealt with to the extent necessary, as the subject cannot
be divided into strict watertight compartments. These issues are dealt
with in the succeeding chapters.
98
10
Chapter - 3
1.2. The definition of rural electrification has been changing from time to time.
Initially a village was deemed to be electrified if electricity was used within
its revenue area for any purpose whatsoever. In Octoberl 1997 the
definition was changed and a village was deemed to be electrified if
electricity was used in the inhabited locality within the revenue boundary
of the village for any purpose whatsoever. While these are the definitions
adopted by the Ministry of Power, the Ministry of Non-conventional Energy
Sources regard a village as electrified if 60% of the household in the
village are provided lights for the purpose of assessing their own
performance. Exact statistics according to the different definitions are not
yet available.
2.1 The Rural Electrification Corporation was set up in 1969 with the primary
objective of providing financial assistance for rural electrification in the
State. The Corporation is now one of the prime financial institutions in
the State and extends financial assistance to State Electricity Boards,
State Power Corporations, Electricity Departments of the State
Governments and Rural Electric Cooperatives for various rural
electrification schemes. The corporation was declared by the Reserve
Bank of India as a non-banking finance company. The cumulative
sanctions and disbursements of the loans sanctioned by the rural
electrification department amount to Rs. 35353 crore and Rs.24687 crore.
respectively as on 31.3.2002.
2.2 The authorized share capital of the Corporation was Rs.1200 crore and
the paid up capital was Rs. 1780.60 crore as on 31.3.2001.
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11
2.6 The following adverse features also plague the programme of rural
electrification:
2.7 This apart, the programme of rural electrification has created a very
serious problem of depleting ground water tables due to the faulty tariff
policies adopted so far. As the tariff is levied at a flat rate, irrespective of
the number of units consumed, the farmers drew very heavily on the under
ground water resources, there by leading to lowering of the water table.
Declining levels of water table have caused a great deal of anxiety among
the State Governments, some of which have enacted legislation to ban
digging of new wells. The problem was accentuated as simultaneous
steps for recharging ground water sources through appropriate measures
like soil conservation and watershed development were not initiated.
2.8 Another important issue that arises is the use of diesel pump sets in large
numbers on account non-availability of reliable power. Farmers who draw
subsidy on use of grid power make use of diesel engines to meet their
total energy requirements with the obvious implications on outgo of foreign
exchange.
2.11 The Government of India have, in the budget for the year 2001-02, treated
electricity as part of the basic minimum services for the rural poor. The
funds for rural electrification have, therefore been, allocated to the states
under the Minimum Needs Programme and “Pradhan Mantri Gramodyoga
Yojana.”
2.12 The Government have recognized the need for new initiatives in rural
electrification in the wake of various problems outlined above. This is
reflected in the Statement of Objects and Reasons of the Electricity Bill,
2001, which views Distributed Generation as a possible alternative to the
current problem. It envisages stand-alone systems for generation and
distribution of power and decentralized management of distribution
through Panchayats, Users Associations, Cooperatives or Franchisees.
for rural and remote areas.
2.13 The concrete steps that could be taken to implement the new thoughts on
rural electrification are discussed later in the Report.
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14
Chapter 4
3.5 Wind-turbines: Wind turbines extract energy from moving air and enable
an electric generator to produce electricity. These comprise the rotor
(blade), the electrical generator, a speed control system and a tower.
These can be used in a distributed generation in a hybrid mode with solar
or other technologies. Research on adaptation of wind turbines for remote
and stand-alone applications is receiving increasingly greater attention
and hybrid power systems using 1-50-kilowatt (kW) wind turbines are
104
16
being developed for generating electricity off the grid system. Wind
turbines are also being used as grid connected distributed resources.
3.7 Photovoltaics: Photovoltaic power cells are solid state semi conductor
devices that convert sunlight into direct current electrical power and the
amount of power generated is directly related to the intensity of the light
PV systems are most commonly used for stand alone applications and
are commercially available with capacities ranging between one kW to one
MW. The systems are commonly used in India and can contribute a great
deal for rural areas, especially remote and inaccessible areas. It can be of
great help in grid connected applications where the quality of power
provided by the grid is low. This is yet to be proved. High initial cost is a
major constraint to large-scale application of SPV systems. R&D work has
been undertaken for cost reduction in SPV cells, modules, and systems
besides improvements in operational efficiency.
3.8 Fuel Cells: Fuel cells produce direct current electricity using an electro-
mechanical process similar to battery as a result of which combustion and
the associated environmental side effects are avoided. Natural gas or coal
gas is cleaned in a fuel cell and converted to a hydrogen rich fuel by a
processor or internal catalyst. The gas and the air then flow over an anode
and a cathode separated by an electrolyte and thereby produces a
constant supply of DC electricity, which is converted to high quality AC
power by a power conditioner. Fuel cells are combined into stacks whose
sizes can be varied (from one kW for mobile applications to 100MW plants
to add to base load capacity to utility plants) to meet customer needs.
However, the technology is not yet ripe for being considered for DG
application in India, as it is very expensive, and has not yet been
commercially tried on a large scale even in the U. S. A.
4. The technologies referred to above are applied under various schemes for
generation of electricity from renewable sources of energy in the State.
A bird's eye view of the schemes would give a good insight into the status
of Distributed Generation based on renewable sources of energy.
105
17
5. Biomass Based Schemes: This can be considered under three
distinct heads, National Project on Biogas Development, National
Programme on Bio-Mass Power/Cogeneration and Bio-Mass Gasifier
Programme.
5.1 Biogas. The gas is piped for use as cooking and lighting fuel in especially
designed stoves and lamps respectively and can also be used for
replacing diesel oil in fuel engines for generation of motive power and
electricity. The Floating Gas Holder Type, that is India or KVIC model and
Fixed Dome Type which is made of brick masonry structure i.e.
Deenabandhu model are among the indigenous designs of biogas plants.
A Bag Type Portable Digester made of rubberized nylon fabric, suitable for
remote and hilly areas, is being promoted. The recently developed
methodology of on sight construction of Deenabandhu model with Ferro-
cement, which costs about 10 to 15% less as compared to the model
constructed with bricks and cement, is getting popular in the Southern
States.
6.7. 1796 gasifier systems with an aggregate capacity of 51.3 MW have been
installed in various states.
6.8 The Smallstry of Non-conventional Energy Sources has taken up the task
of electrifying the 18,000 unelectrified remote and inaccessible villages
based on the renewable energy technologies in a phased manner by
2012. During the 9 th plan the village electrification projects with an
aggregate capacity of 5 MW equivalent which cover 84 remote villages
and hamlets in West Bengal, Orissa, Tripura, Mizoram and Nagaland were
initiated out of which an aggregated capacity of 2.14 MW has already
been installed in West Bengal, Orrisa and Karnataka.The remaining
projects, which are in the pipeline, would be commissioned by the end of
the financial year 2001-02.
108
20
7.2 The Institute later on developed biogas plants and wood
gasifiers that used other biomass such as agro residues, forest litter,
weeds etc. (Ungra and Hosahalli villages). According to some of the
experts of the Institute,
7.3 Later on, the Institute developed another model in order to reduce the
capital costs. The possibility of exploiting one of the oil seed bearing trees
in India, viz. Pongamia Pinnota, which is known as Karanj in Hindi, Honge
in Kannada, Kanuga in Telugu and Pongam in Tamil, gave a golden
opportunity for cost reduction. The indigenous tree grows all over India is
drought resistance and its seeds have non-edible oil to the extend 30-
35%. The new model has been experimented with some success in the
villages of Kaggenahalli and Suggenahalli.
7.4 It is noticed that the cost of generation per unit of electricity is 4.50 in the
case of Honge oil, Rs. 7.25 and Rs.9.50 in the case of wood gasifier and
biogas, respectively, both operated on a duel fuel mode. The difference is
mainly on account of the lower capital cost in the case of honge oil as
compared to that in the case of wood gasifier and biogas based plants.
This is the scenario when the cost of diesel per liter is Rs.19.00 at
Bangalore.
7.5 Diesel based electricity supply is cheaper, Rs.4.66 per unit, as compared
to 4.89 per unit in the case of honge oil, if the price of diesel is Rs.12.39
per liter at Bangalore. The difference between the two is purely on
account of the higher capital cost of the former, which is due to honge oil
seed expellers. However, this is a most unlikely scenario, as the price of
diesel can be expected to remain at levels higher than Rs.12.39 per liter,
on account of the dismantling of the AdSmallstered Pricing Mechanism.
Annexure 3 may please be seen in this context.
7.6 The inherent advantage of honge oil Vis a Vis diesel is that honge oil is
environment friendly, is renewable, locally available, and involves
Smallmal transportation. Further, if used extensively, it would lead to self-
reliance. Extensive use of diesel oil, would lead to loss of foreign
exchange.
8.1 The wind power potential of the State was initially assessed at 20000 MW
and reassessed at 45000 MW subsequently assuming 1% of land
availability for wind power generation in potential areas. The technical
potential has been assessed at 13000MW assuming 20% grid penetration,
which will go up with the augmentation of grid capacity in potential States.
The installed capacity in the State is 1628 MW, 63 MW under
demonstration projects and 1565 MW under private sector projects, which
represents just 13% of the technical potential. Tamil Nadu alone accounts
for nearly 50% of the installed capacity (857.5 MW) and the States of
Tamil Nadu Maharashtra and Gujarat account for 1423.6 MW of the total
installed capacity.
8.2. The Centre for wind energy technology (C- WET) is coordinating the Wind
Resource Assessment Programme with the States and Nodal Agencies.
8.3 Wind diesel projects are being taken up in Island regions and remote
areas which are dependent on costly diesel for power generation .Two
machines of 50 kW capacity each have been installed in the first phase of
the project at Sagar Islands in West Bengal. Similar projects are being
considered for Lakshadweep and Andaman and Nicobar Islands.
9.2 The solar photovoltaic systems can be used for a variety of applications,
such as rural telecommunications, battery charging, road and railway
signalling which are non subsidized. Only 3 MW out of the total aggregate
capacity of 96 MW (9,80,000 systems)
110 is used by the power plants. In so
22
far as rural areas are concerned, the SPV systems can be
useful for the following:
ii. SPV seem to be one of the best solutions on for the 18000 remote
and inaccessible villages. Solar electrification is more economical in
tribal areas and the North Eastern Region compared to grid extension
beyond three kilometers.
iii. In Gujarat, SPV systems have been applied at ten rural milk
collection centers of Panchamahal District Dairy Cooperative during
2000-2001, ten more were sanctioned in 2001-02. The deployment of
solar PV systems for this application has a large potential for
replication.
iv. SPV water pumping systems for agriculture and related are also
being used by farmers. A cumulative total of 4500 SPV water systems
have been installed by March 31, 2002
9.3 R & D: High initial cost (Rs.ten to twelve per kWh as compared to Rs one
to Rs two and paise seventy five from small hydro, biomass and wind
energy) is a major constraint to large-scale application of SPV systems. R
& D work has been undertaken for cost reduction in SPV cells and
modules and systems, besides improvement in operational efficiency
10 Small Hydel Projects: Small hydel projects have become very popular
since the last decade on account of many problems, especially those
relating to environment, which are associated with major irrigation projects
.New technologies also make facilitate small sized projects to operate
either in grid connected or decentralized mode and thus make them
economically viable. The classification of hydro-power by size is given in
Annexure 4.
10.1 A number of steps have been taken in the last decade by giving suitable
incentives to attract private investment in commercial projects. The
capacity in Small hydel projects (upto 3 MW) has increased from 63 MW to
240 MW in the last twelve years as a result of the positive steps taken so
far. Capacity of over 200MW has been offered/allotted by the State
Governments to the private sector. The current emphasis is on
completing the projects offered to 111the private sector by the State
23
Governments and also making simultaneous efforts to identify
potential sites, conduct detailed surveys and prepare detailed project reports
for a shelf of projects.
10.2 The Small hydel potential in the State is about 15000 MW. Four hundred
forty one projects (of up to 25 MW capacity each) with an aggregate
capacity of 1438.43 MW have been installed upto 3782 March 2001 till
now. Two hundred eighty seven projects with an aggregate capacity of
563.04 MW are under implementation. Fifty portable micro hydel sets of 5-
15 kW capacity have been provided to local bodies and local
communities in seven States through the State Government Agencies.
Forty-one out of these have been installed and the response from the local
communities has been quite encouraging. Small hydel projects are
particularly suited for remote and hilly regions, Ladakh and the North
Eastern States.
11. It would be obvious from the above that a great deal of effort has been
made to generate power from renewable energy sources.
12. India, in fact, has great deal of potential in this regard and already
emerged as a world leader in exploitation of renewable energy sources.
India ranks first in biomass gasifiers (35 MW), fourth in biomass based
power generation (400 MW), fifth in installed wind power capacity (1507
MW) and tenth in small hydel power capacity (1438MW) and fourth in
solar photovoltaic. (50MW).
13. Though India has attained an eminent position in the world in the
exploitation of renewable energy there is a tremendous gap between the
potential and actual achievement as would be seen from the following
statement.
112
24
14. The emphasis in the North Eastern region and other inaccessible areas
that comprise 18000 difficult villages will be on decentralised generation
using locally available energy options like biomass, Small hydel,
photovoltaics, solar cookers and lanterns, etc. The overall position in
respect of the North Eastern Region of the State is as follows:
Item All India potential North East All India Capacity set up
Identified Potential capacity in N. East
マ マ set up マ マ
Small hydel 10071.81 2028.34» 1438.43 153.02 (1.52)
マ (20.14) (14.28)マ ヘ
Biomass/cogeneration 19500 N. A. 381.3 Nil
separately. マ j
Biomass gasification マ 51.3 マ Nil;
œ
Wind Energy 12835 (technical) 1628.3 š Nil
¬ .
Solar
マ Energy SPVs
ヘ 20MW/sq. km 96 MW
shows MW; 43biomass resource assessment studies awarded; R &D on
sustained
j production of biogas at low temperatures is on
Research on biomass production survey and evaluation of selected species
for
œ energy plantation in N. E region is » on
š 27 probable windy sites identified; figures in brackets indicate percentages.
¬ Of this 40 SPV products have been exported
.4 power plants of 25kWp capacity each in Mizoram, 3 power plants of
aggregate 4.5kWp SPV capacity IN Assam, 3 power plants of aggregate 9.2
kWp capacity in Arunachal Pradesh are under implementation66 solar home
lighting systems sanctioned for a village in East Kamang District of Arunachal
pradesh170 special solar street lighting systems sanctioned in Manipur
15. It would be seen from the statement that it is only in Small hydel that a
beginning has been made in the North Eastern region. It may be noted
that out of a total capacity of 563.04 MW under implementation, 165.42
MW capacity, which is 29.38 % of the total capacity is in the North Eastern
Region.
17. The Government have taken cognizance of the gap between the potential
and the actual installed capacity/achievement under various items under
Renewable Energy Sources. In keeping with the world wide trend of
encouraging distributed generation and having a green environment,
the New Renewable Energy Policy 114 stipulates that by the year 2012,
26
10% of the total addition to generation capacity will be from
renewable sources. Assuming that another 100,000 MW will be
added by the year 2012,the contribution by renewable energy fuels
would be between 10-12000 MW, about 13-15,000 MW in all. This
would be 6- 7.5% of total power generated in the State.
ヘProduct/Technology Related:
ヘMany products and technologies are not yet mature.
Smallmum economic sizes are under evaluation.
Raw
œ Materials Related:
Resource availability assessments are based on rough estimates,
especially in biomass power and hilly hydro projects.
Land
マ Related:
; Govt/forest land /irrigation land are not mortgageable.
Climate Related:
115
ヘ 27
Photovoltaic cells do not work on a cloudy day and windmills do not
mill the wind without a breeze.
ヘ
Policy Related
Frequent changes in policy.
Market
マ Related:
Distortions in energy market on account of subsidized conventional
electricity
22. The committee is of the view that despite the constraints mentioned
above, the programme will have to be carried forward with vigour,
especially in the case of the 18000 villages where no other solution seems
to be feasible. In the case of other villages, whether connected by grid or
not, decisions will have to be taken on a location specific basis.
116
28
CHAPTER - 5
1. The programmes and schemes of the power sector in the State do not
enlist the involvement and support of the beneficiaries. The policy
makers had however, envisaged a cooperative and participatory model for
rural electrification in the State. One of the directives which was issued
to the Rural Electrification Corporation by the Government of India was as
follows:-
ii. Cooperatives
iv. NGOs
4. Local Bodies
4.1. Article 243 G of The Constitution Seventy Third Amendment Act, 1992
empowers the legislatures of States to enact suitable legislation and
endow the panchayats with such powers and authority as may be
necessary to function as institutions of self government and prepare and
implement plans for economic development and social justice. The
Eleventh Schedule, which lists out the items in respect of which such
powers can be conferred, includes rural electrification and distribution of
electricity and non conventional energy sources.The State Governments,
however, have not enacted such legislation, The Panchayat Raj
117
29
institutions, again, are not well equipped to take up such schemes as
of now.
iii. The Local Bodies are also involved in the distribution of solar
lantern among the households in the villages.
4.3. There are only very rare examples in which the Zila Parishads, Panchayat
Smithies and village Panchayats have directly participated in generation
and distribution of electricity. For instance the Biomass Gasifier plant at
Gosaba in Sunderban Islands is managed by a local cooperative and
Chairman of the Panchayat Smithi is the Chairman of the Cooperative.
5. Cooperatives
5.1 Rural Electric Cooperation were set up with the help of Rural
Electrification Cooperative, the State Electricity Boards and the State
Governments. 5 pilot cooperatives were formed initially. Hukkeri in
Belgaum district of Karnataka Sirilla Taluka in Karimnagar District in
Andhra Pradesh, Kodinar Taluka in Amerali District in Gujrat and Rahuri
and Srirampur Talukas in Ahmednagar District of Maharashtra and a part
of Lucknow District in UP. The number had increased to 37 in the year
1994-95. The Committee on Rural Electric Cooperatives under the
Chairmanship of Shri N.S. Mathur which was constituted to examine all
aspects of the working of the existing cooperative societies and evaluate
their performance, made the following important observations:
5.2 Many of the cooperative societies are now being run by administrators
because their management has been taken over by the concerned State
Governments. It may however be noted that the rural electric
cooperatives did have some genuine problems and were not allowed to
function properly. The following deficiencies were noticed :
ii. Most of the States took to a system of flat rate tariff for agricultural
consumers under which the farmers, consume much more units than
are actually paid for. The societies faced an anomalous situation in as
much as the energy purchased by them was on a metered basis, but
the supply thereof to consumers was made on an unmetered basis and
naturally incurred losses.
5.3 The fact, that many of the cooperative societies did not succeed because
of the various reasons cited above, need not deter us from trying out that
model once again, especially in the States where the cooperative
movement has been quite strong.
5.4 Initiatives by cooperative societies are not wanting even now. For
instance Bantwal Rural Electricity Cooperative Society has been very
keen on taking over distribution of electricity within the Bantwal Taluk of
Mangalore District. Its efforts
119 were frustrated mainly because the
31
erstwhile Karnataka Electricity Board did not agree to part with its
distribution rights over the area to the society. The society proposes to
convert 750 km of low tension lines into high tension lines, replace 145 out
of the 773 distribution transformers that have failed and replace all the
inefficient 13,143 irrigation pump sets. All the improvements are
estimated to save about 10 lac units per month.
5.5 The Rural Electrification Corporation has in the Annual Report for the year
1996-97, expressed the view that the most feasible and effective option
appears to be to promote more and more Rural Electric Cooperative with
active participation and involvement of local people and Panchayat Raj
bodies.
6. Users Associations
6.1 The village panchayats are perceived as being controlled by the village
strong men with considerable influence which is used to the detriment of
weaker sections . It is this perception which is responsible for the
formation of groups of beneficiaries for implementing programme of
poverty alleviation. These are implemented through associations of
beneficiaries or Users Associations. The Self Help groups which have
been set up of late, under the poverty alleviation programmes, must be
take cognisance of in this context, as many of them have been successful
in achieving their objectives. Village level committees are another
manifestation of Users Associations.
7.2 The objective of the two projects was to form village committees (Vidyut
Sangha) in order to ensure that the consumer got the bills regularly and
not burdened with payment of bills for six months at a time and improve
the quality and stability of power. The committees were accorded formal
recognition and functioned as a Customer Care Centre in villages. The
committees appoint persons from the villages, designated as Village
Contact Persons for taking meter readings and distributing of bills in the
villages. The committees function as a one point collection centre for
WESCO and NESCO. WESCO and NESCO contact the village level
committee on dates fixed for collection.
ii. Since the villagers are educated about issues relating to tariff, they
are able to plan their consumption of electricity in a much more
rational manner and have been able to bring down the bills to Rs.50
to Rs.85 from Rs.226 p.m.
8. Unresolved Issues
8.1 There are still two areas where considerable improvement is yet to be
achieved. These are as follows:-
ii. Though the quality of service has improved, there has been no
improvement in terms of the access of electricity to consumers, in
villages which still remain unelectrified.
8.2 The Xavier Institute of Management has expressed the view that the two
concerns listed above could be121
addressed by Distributed Generation and
33
has proposed that a pilot project may be taken using distributed
generation to improve access of electricity in villages. It is proposed to
have one such project in village nahalla in Orissa.
9.1 TERI implemented schemes of improved chula, biomass gasifier and solar
and other technologies and also of reclaiming degraded land through
energy plantation for nearly 10 years at Dhanawas in Haryana. The
Institute has documented the results of its field study, which would be very
useful .
9.2.1 TERI found that there were 4 stages of interaction between its
representatives and the villagers.
9.2.2 In the first stage, there is rapport building with the villagers so that all the
issues connected with the village are understood. The people are
associated with the village surveys, which ensures the involvement right
from the beginning.
9.2.4 At the third stage, there was technology acceptance and capacity building
among the villagers. The success of a newly developed technology
evokes a better response from the individuals who become increasingly
more receptive to its adoption, largely due to its demonstration and
dissemination. People were trained in maintenance and management of
new devices. Masons for construction of biogas plants were also trained.
9.3 Dissemination of new technologies for which there was still a demand
characterised the next stage which was that of withdrawal. Bulk of the
work was carried out by the persons trained in the village with TERI
assistance in terms of providing technical guidance. The technologies that
were used for community use such as the solar water pump and the
plantation were handed over to the village panchayats.
vii. Energy technology that does not necessitate any major alterations
in peoples practices has better prospects of success. Though there
was good potential for biogas plant in Dhanawas village, many
villagers were unwilling on account of constraint of space for
construction.
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viii Continuous monitoring and evaluation helped in identifying
problems with plant design in which necessary modifications were
made wherever these were required.
9.5 TERI’s experience at Dhanawas showed that rural energy problems are
extremely location specific in nature, and that in view of the vide variations
that exist in the socio cultural environments in the rural areas, energy
planning at a decentralized level will give better results as compared to a
target oriented programme based on uniform technology specific
programmes.
9.6 The village level committee at Dhanawas was different from the
committees established by WESCO and NESCO as it was very closely
associated with the village panchayat. The relationship between the
villagers, the village panchayat, TERI and the Village Energy Development
Committee is illustrated by the diagram at Annexure 6.
9.7 The Institution of Village Level Committees has been used in other
countries as well as in the case of Chalan Micro Hydro Scheme in Peru
and Dhandruk Micro Hydro Power Scheme in Nepal.
10.1 In all the examples that were cited above, there was no local generation
and distribution of electricity in the form either of a grid or mini grid. The
Indian Institute of Science, Bangalore which implemented some projects
of Distributed Generation, also made use of the village level committees.
A village management committee comprising of 8 villages including 2
women was constituted in village Hosahalli which assisted in protection of
forests, supervision of operations and collection of electricity charges at
Rs.6/- per month.
10.3 The models of the Institute do indicate, like the BSES's model, that people
can behave responsibly and manage a system, unlike the general belief to
the contrary, if they are properly motivated. The constitution of the Village
Level Committees led to a reduction in the consumption of electricity in
many villages. In Pura village for instance, the villagers restricted access
to water supply 3 times a day after they took over the management of the
biogas plant and the consumption came down from 26 liters per head to
22 liters between October 1998 and August 1999.
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11.1 Self-help groups have emerged as a force to reckon with, especially
after they were given role in poverty elevation programmes. The following
are some of the examples of the role played by them in rural
electrification.
i. Lighting is not the most important thing the villagers want. Drinking
water followed by irrigation
125 water occupies the pride of place in the
37
lives of villagers. It was the success in these
fronts that brought about the desired attitudinal change among the
villagers.
14.1 In a State in which nearly 90% of the villages are technically connected
to the grid the role of the push and pull factors would have to be critically
studied before any scheme of distributed generation is introduced in the
rural areas.
14.2 In the cases relating to Sugganahalli and Kagganahalli and other projects
of distributed generation the push and pull factors operated as follows:
iii. TERI's experience in Orissa shows that the high rates of failure of
school children in the examinations provoked some villagers who
found that lack of electricity was an important reason for the same.It
was this realization which provoked the villagers to think of
distributed generation scheme.
15.1 The following are the important institutional models for distributed
generation within the State.
15.2.2 The project was set-up by the West Bengal Renewable Energy
Development Agency with the assistance of the Ministry of Non-
Conventional Energy Sources. West Bengal Renewable Energy
Development Agency, which owns all assets associated with the power
plant and guarantees reliable generation and supply of electricity to its
consumers in Sunderbans.
15.2.3 The biomass gasifier plant at Gosaba was commissioned in June 1997.
Its membership has increased from 25 in 1997 to more than 600 now.
15.2.4 The plant is managed by a local cooperative and the Chairman of the
Panchayat Samithi is also the Chairman of the Cooperative. Other
members of the cooperative are from West Bengal Renewable Energy
Development Authority and local political bodies.
15.2.5 The total number of members in the cooperative is 12-13. A person from
nd
the cooperative takes the monthly
127 meter reading. The bill is sent by 2
39
rd
/3 of every month which has to be paid within 10 days at the office of
the cooperative. If the payment is not received within the stipulated time,
a notice of 7 days is given . If the payment is still not made, the
connection is cut in a month's time and recollection requires payment of
Rs.1000/-. All the revenue goes to West Bengal Renewable Energy
Development Authority.
15.2.6 The tariff for domestic connections is fixed at Rs.3.25 per unit while
commercial tariff is fixed at Rs.3.75 per unit. Tariff for grid electricity for
Kolkata is Rs.2.50 per unit ± domestic and Rs.3.00 per unit ± commercial.
15.2.7 Initially, the maintenance of the plant rested with the supplier of the
equipment, Ankur Limited. The contract has now been given to another
company which is a manufacturer and supplier of the diesel engines in the
plant. The relationship between the village committee, the local enterprise
that operates and maintains the plant and the West Bengal Renewable
Energy Development Authority, in this model is indicated diagrammatically
at Annexure 7.
15.3.1 The Sunderban model is the product of the initiative taken by Central
Government and the Government of West Bengal. Private initiative in this
respect is not wanting as can be seen from TERI's model. TERI acts in
close cooperation with the manufacturers, financial intermediaries and
entrepreneurs and other NGOs. Suitable entrepreneurs are identified to
act as Independent Energy Service Units Network.
15.3.2 The Energy Service Unit facilitates rural credit and guided by the spirit of
service for the people also undertakes tasks such as promoting
awareness, demonstrations etc. The Energy Service Company is a part of
The Energy Service Network and markets the renewable energy
technology devices and provides the back-up services in the form of
spare-parts and repair and maintenance services. The details of this
model may please be seen in Annexure 8. Uttam Urja project of TERI in
Rajasthan is an example of this project.
15.3.4 The models referred to above can be considered for operating Distributed
Generation and Distribution Systems. It is doubtful whether the local
bodies will be able to own operate and maintain such systems as of now.
The Village Level Committees will have to be established on a very big
stage in the initial stages and thereafter wherever conditions are found to
be suitable full fledged systems can be developed.
15.4.2 The Palli Bidyut Samithies have a special division for Member Education
to appraise beneficiaries of the rights and obligations of cooperative
members. The Samithi appoints a Village Advisor for each village. They
hold an honorary post and have to provide information to the people on
operational status and policy of the Samithi, give basic education such as
how to use electricity, and report to the Samithi on village needs and
promote early construction of distribution lines . The General Manager
communicates the customers via Villager Advisers.
15.4.3 The members of the PBS elect a Board of Directors which are a maximum
of 15 members. 3 women nominees are nominated by the Board to
ensure representation of women. The Board of Directors gives policy
instructions to the management and ensures that the management
implements them. The General Manager who is appointed by the Board is
accountable to both the Board of Directors and the Rural Electrification
Board. The Board of Directors cannot remove the General Manager
without the prior approval of the Rural Electrification Board. However,
incase of necessity the Rural Electrification Board can remove the General
Manager without the concurrence of the Board of Directors.
15.4.4 In order to ensure that the system is financially viable, lines are given on
the basis of established criteria and the lines that do not fulfill the revenue
requirements are not included in the programme. The Palli Vidyut Samity
avoid unnecessary staff and average employee consumer ratio is 1: 2.50.
15.4.5 Before the Samithi is established in a village, an adhoc project team called
Institution Development Team, visits a Thana, a Rural Administrative Unit
and explains the plans of electrification to the representatives of a Union,
a smaller village unit that forms a Thana. The team provides a information
and educates the potential beneficiaries about the importance and
convenience of electricity. The teams obtains the consent of residents
from the Union after its representatives reach an agreement to introduce
electrification. Those who want power have to pay a small sum for the
right to have power supply and obtain membership of the cooperative.
The Institutional Development Team chooses a representative of the
area, who is to be the first Director of the Electrification Cooperative.
The Director should be politically neutral and is forbidden to belong
to any political party. After 3 years of establishment of PBS a new
Director is elected by direct votes by residents in the region.
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15.4.6 The Bangladesh model is not without its problems. As the
project is capital intensive the need for additional capital is always felt.
The poor consumer mix, the limited revenue per km of line due to small
load of domestic consumers, the difficulty in reaching remote areas are
some of the constraints being experienced there. Further, the general
approach towards tariff determination is one of a cross subsidy between
industrial and commercial clients and residential or agricultural PBS
members which
has given rise to problems as the growth in industrial load has not been
fast enough to compensate the shortfall in recovery from residential
consumers.
15.4.7 The Bangladesh model is relevant to India because the National Rural
Electrification Cooperative Association, a central organization of rural
electric cooperatives in the USA was entrusted by US Agency For
International Development to extend technical assistance to the Rural
Electricity Board. Further, the conscious effort made by the government of
Bangladesh to keep the scheme free from all politics is a matter of
significance for India where elected representatives of the people, political
parties etc. have worked to the detriment of dedicated work being done by
the NGOs by promising subsidized or even free supply of power.
15.4.8 The scheme has been a success and the collection rate was as high as
94% due to the emphasis placed on promptness in the payment of bills by
the consumers. Despite these positive features the scheme has to face
challenges. The need for capital is also felt as it is a capital intensive
project. The poor consumer mix, the limited revenue per kilometer of line
due to small load of domestic consumer are some of the constrains the
Board is trying to tackle. The pace of progress is slow though the
collection rate is as high as 26%. However, the Bangladesh model has
ensured people's participation in the process of distribution of power right
from the initial stages of development.
15.5 To sum up
vii. The efforts will also have to be made to keep the entire process
free from politics. The depoliticised model of Bangladesh may be
kept in mind.
viii. Very few of the local bodies are likely to reach the final stage, of
local generation and distribution, However, in order to give an
impetus to the new concept, some demonstration projects should
be taken up either by the Government or private agencies to give a
lead to and motivate others into replicating such models .The
demonstration projects should be taken up very carefully after
assessing the potential of a village/cluster of villages for
development, the degree of cohesion among the villagers, the
attitudes of the elected representatives of the people in the area
concerned, and the ability of the Panchayat Raj institutions.
Success of the demonstration projects is a must, as people go
back to the traditional systems with a vengeance, if such nprojects
fail.
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Chapter – 6
Financing Schemes of Distributed Generation
1. Distributed Generation is a new concept in the State and has not been
tried on a large scale as yet. Needless to mention, a clear and well
established l framework for financing D. G. schemes is yet to emerge.
ii. Small Project Size - Technological and resource constraints limit the
size of DG projects. Further, transaction costs of small projects are
proportionately high as compared to those of conventional projects.
Since DG schemes are site specific, a lot of time and money has to
be spent with regard to the investigation of the sites. It has also been
observed in some projects that optimum capacity utilization cannot
be attained on account of limited working hours or inadequacy of
demand. Many financial institutions are, therefore, unwilling to invest
in DG schemes.
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4. The institutional frame for financing schemes in the power sector in the
State comprises the Rural Electrification Corporation, the Power
Finance Corporation, the State Finance Corporations and the Indian
Renewable Energy Development Authority(IREDA). An understanding of
the role played by each of these financing agencies is essential to
understand the gaps in the present framework and the manner in which
the same should be made good.
5.1 The Corporation can finance micro, mini and small hydro generation
projects as well as projects based on non-conventional energy sources.
The emphasis of the corporation, however, has been on financing medium
and large hydro and thermal power projects. This would be clear from the
fact that out of the cumulative sanctions ( as on 31-3-01) worth Rs.30674
crore, Rs.24709 crore were for thermal generation, hydro generation, and
renovation of hydro power projects and transmission. . Renovation and
modernization and life extension of old thermal and hydro plants is a
priority area of financing by the Corporation The Corporation has also
successfully implemented the Accelerated Generation and Supply
Programme of the Government of India during the 9 th Five Year Plan.
5.2 The Corporation has played the role of a catalyst in carrying forward the
structural reforms in the power sector since the early 90's by adopting the
three fold strategy of a proactive engagement with the States by providing
grants/concessional loans for studies required for developing reform
packages, formulation of special packages of incentives for reforming
states including relaxation in conditionalities and exposure limits and grant
of large scale financial assistance to power utilities in the power reforming
states to take care of their investment needs during the next 5-7 years.
5.3 As of June 2002, the Corporation releases credit to the extent of 70% of
the project cost for medium and large hydro generation and thermal
generation in case of Central and State utilities and municipal run bodies,
the corresponding the corresponding
133 limits for private utility companies
45
being 25 and 20% respectively of the project cost. The terms
and conditions of the assistance given by it are indicated in Annexure 11.
5.4 Most of the loans have been released in the favour of the Central and
State Utilities. After the entry of the private sector in generation of power
the corporation has supported 6307 MW of generation capacity through
various types of thermal plants including coal, gas/naptha, furnace oil and
DG based or hydro plants etc.
5.5 Financial assistance to small scale decentralized power projects has been
a peripheral activity for the Corporation. In a number of projects based on
bio-mass /cogeneration which it took up for consideration between 1995
and 2002, it found that difficulties arose on account non availability of long
term arrangement for fuel as well as non availability of fuel, matters
relating to quality and pricing of fuel, absence of a proper power purchase
agreement, and weak promoters.
5.6 The Committee is of the view that the Corporation should concentrate on
the area of its specialization and upgrade its skills and capabilities to face
the emerging challenges in the power sector.
6.2 The tempo of rural electrification which was very high during the 6 th and
7th five year plans during which 2.20 lac villages were electrified, has
come down drastically on account 134 of the reluctance of the State Electricity
46
Board to take interest bearing loans for electrification of
unelectrified villages and hamlets. The State Governments have been
reluctant to avail themselves even of the assistance of the 100% grant
under the Kutir Jyoti programmes on account of their apprehension of
recurring revenue loss through such connections. States like Haryana,
Goa did not lift grant even for a single connection and states like Bihar,
Gujrat, Rajasthan, Punjab, UP and West Bengal utilized the grants
only partly under the programme in the year 1999-2000. The same
reluctance was noticed even among the North-Eastern states.
6.3 The Rural Electrification Corporation started giving greater emphasis after
the rural network had expanded sufficiently on system improvement to cut
down transmission and distribution losses, increase revenues and
improve the quality of supply of power to the consumers. The Corporation
sanctioned 300 SI schemes for a loan outlay of Rs. 2989 crore in the
year 2001-02 for the purpose to State Electricity Boards/ State Power
Utilities /State Power Departments. This included special category of loan
schemes for procurement and installation of energy meters, replacement
of transformers, capacitors and other equipment to improve the quality
of supply of power and to conserve energy. The response to these
schemes from the borrowing State Electricity Boards/State Power Utilities
has been very good.
6.4 While the steps outlined above are welcome, the Corporation has to do
much more to reorient itself, taking into account the following qualitative
changes that have taken place in the power sector in the last few years
and meet the new challenges..
6.5 The Rural Electrification Corporation is thus on the cross roads as the
tempo of traditional activities has slowed down and new programmes are
not yet being taken up on a large scale The Corporation, which has
developed expertise over a period of time and has its network of offices
throughout the State, needs to be utilized for financing Distributed
Generation programmes, especially those based on renewable resources.
The committee considers that this important point should be pursued in
the time bound manner by the government There does not appear to be
any difficulty in doing so as the executive order of the Government of India
which permitted it do take up only schemes below 25 MW and restrict
itself to towns with a population of 1.5 lakh has been withdrawn It can
therefore function like any other power finance corporation .The
redefinition of its role in the changed context needs to be brought out
quickly.
7.1 There is another important financing agency in the power sector viz. India
Renewable Energy Development Authority, which was incorporated as a
Public Limited Company in 1987. Its mission is to be a pioneering and
competitive institution for financing and promoting self sustaining
improvement in energy generation from renewable sources, and energy
efficiency for sustainable development. Rapid commercialization of new
and renewable sources of energy and upgradation of their technologies
are among its important objectives It gives project and equipment finance.
It can also operate through financial intermediaries and business
development associates.
7.2 The authorized share capital of IREDA was Rs.300 crores and its paid up
capital was Rs.250.35 crores as on 31.3.2002. It has mobilized
considerable assistance especially from World Bank/GEF/SDC.
7.3. The terms and conditions of the assistance given by it may please be
seen in Annexure 12 .It gives special
136 concessions for North-Eastern
48
regions and Sikkim as per the details given in Annexure 13.The targets for
the tenth Plan given to IREDA may please be seen in Annexure 14.
7.4 IREDA's loan commitment to the 1569 projects it has approved comes to
Rs.5285.26 crores against which loans worth Rs.2732.29 crores have
been disbursed. The power generation capacity of the projects assisted
by IREDA is 1892.94 MW. The commissioned capacity under the IREDA
schemes is 904 MW.The sector wise cumulative details of the capacities
sanctioned by IREDA as on 31.3.2002 are given in Annexure 15. It would
be seen there from that out of the total capacity of 1892.94 MW
sanctioned by IREDA 614.54 MW, 428.90 MW, 537.50 MW and 205.11
MW are on account of wind energy, small hydro, cogeneration and
biomass power respectively.
8.2 After the discontinuance of the subsidy based extension schemes a soft
loan programme was introduced under an interest subsidy scheme, which
is implemented through IREDA and public sector banks to promote solar
thermal products. The interest charged under the scheme ranges between
5%to 8%. IREDA provides loans directly and through its financial
intermediaries for deployment of solar thermal products of any capacity
.The banks provide loans for solar water heaters up to a maximum
capacity of 2000 liters per day. Most of the banks and manufacturers
associations have stressed the need to raise the capacity limit to 4000
liters, so that hotels, hostels, canteens etc can avail the facility of the loans
directly from the banks. The necessary details are given in Annexure 16.
9.1 The Government of India continued to give capital subsidy for SPV
system as per the details given in Annexure 17. IREDA gives soft loans
for installation of SPV systems and power plants.. The subsidy is given by
the government as the cost of generation of Solar PV is Rs.10/- to 12/- per
kWh as compared to that of Rs.1.00 to Rs.2.75 per kW from other
renewable energy sources. The details may please be seen in Annexure
18.
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plants during the year 2001-02 except in the North-Eastern region and
Sikkim.
9.5 There is need for change of strategy adopted by IREDA for implementing
the scheme as costs are coming down on account of various reasons. The
elimination of capital subsidy under the Solar Thermal Programme, after
sufficient dissemination of solar devices, did not hamper either their
growth or popularity.
9.7 The Government of Karnataka have not implemented the scheme of capital
subsidy for the SPV's and hence the company is not facing unequal
competition from subsidized products. It is strongly felt in certain quarters
that the present system of tendering is a major hindrance to the direct
interphase between the users and manufacturers . It is suggested that the
effectiveness of the present capital subsidy schemes which had relevance
some time back in SPV may be reviewed. The scheme may be discontinued
based on the findings of the review and the government may
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iii. The interest rates charged by IREDA range between 0-14%. In the
regime of falling interest rates a downward revision of the interest
rates charged by IREDA could be considered.
11.1 The decision between grid connection and decentralized generation has to
be made on the basis of technical, managerial and economic issues .The
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(a) Distance from existing grid: There is often a cut off point beyond
which grid extension is not viable. The terrain between the grid and
the village must be considered to see if there are difficulties which
can make line extension very difficult. It has been estimated that in
the tribal and the North Eastern region, grid extension beyond three
kilometers is not viable. In such situations stand alone systems are
useful.
12.1 It is obvious that in many cases, Distributed Generation schemes will not
be economically viable. Subsidy will have to be given in some form or the
other, especially in the initial stages for electrifying villages in rural areas
and remote and inaccessible areas. The Government of India have
decided to treat electricity as a basic service and released funds under
the Minimum Needs Programme and The Prime Minister's Grameen
Rozgar Yojana. Under these two schemes, the funds are released to the
States in the form of 90% grant and 10% loan for Special Category States
and 30% grant and 70% loan to other States. Rs 175 crore have been
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earmarked for the year 2001-2 under the Minimum Needs programme and
Rs. 600 crore for the year 2002-3.
12.2 Under the PMGRY, Rs. 418 crore were earmarked for the year 2001-2
and Rs 2800 crore have been earmarked for the year 2002-3 for all
components of the PMGRY with greater flexibility to the States to allocate the
funds among the various components.
12.3 It is necessary that the amounts given as grant/loan is tilized in the best
possible manner. The Committee would make the following suggestions in
this regard.
ii. Adoption of a cluster approach may make the schemes more viable as
it would ensure adequate load for the power that would be generated.
Experience has shown that the low load is responsible for the losses
to be incurred by the schemes. The proposals should be preceded by
a survey of the potential for development of the villages in the cluster
and adequate awareness programmes
iii. The release of subsidy should not be made mechanically but on the
basis of compliance of the terms and conditions of the contract.
Evaluation of the performance by the scheme operator should be the
main basis for release of subsidy.
v. The pattern for financing rural energy schemes that involves various
types of funding such as grants subsidies, loans , contributions in kind
by the local population, etc are getting increasingly common and may
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be tried in India too. The 25 kW micro hydel plant located in the village
Muktinath was funded by USAID and Intermediate Technology, a loan
from the Agricultural Development Bank of Nepal and a contribution
from the village. The share of grants, loans and the people's
contribution was 52%, 31% and 16% respectively. The government's
budgeted grants may be used for making a contribution of schemes of
this type, subject to some eligibility criteria.
vi. The important principle should be that the recurring costs on account
of maintenance, etc. .should not be a burden on the government. If the
tariff levels are such that the people cannot afford them, the schemes
will run into losses. It is, therefore, suggested that a one time capital
subsidy may be given to schemes of Distributed Generation that fulfill
the desired criteria in the manner outlined above, so that the tariffs are
determined at levels the people can afford. For instance, in a mini grid
comprising a group of villages, the capital expenditure on the
transmission line connecting the villages could be subsidized.
viii. In order to ensure that only energy efficient pumpsets are installed,
subsidy may be routed through the approved manucturers to the
farmers. Such schemes may be given the benefit of subsidy, only if a
group of small and marginal farmers comes forward, forma a
cooperative, and agrees to use the water made available by the solar
pump jointly and optimally.
13.1 It is necessary that the socio economic benefits that accrue to a local
community on account of a Distributed Generation Scheme are evaluated
while appraising it. It is necessary to do so, because the benefit accruing
to a single stakeholder may not justify the project cost, though the totality
of the benefits accruing to the various stakeholders may more than justify
the same. The avoided costs of transmission and distribution losses can
form a part of the evaluation of such schemes for instance. The positive
distributed benefits like increased incomes, removal of drudgery, etc
should also be a part of project evaluation. In the U. S. A,. some
companies have made an effort to determine the financial value of the
benefits of distributed power systems .and shown how the distributed
benefits are substantially exceed the avoided cost resulting from the
installation . Unless the benefits are assigned to the scheme, and then
quantified, the same would appear to be financially unattractive. An
example of the effort made by an American company in the case of a PV
array in California, is given in Annexure 19. .
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14. Need For Innovative Financing For DG Schemes:
14.1 The norms for financing schemes will not work for D.G. schemes and the
need for an innovative approach is paramount. The following could be
important components of innovative financing.
i. (a) The return on equity could be in the form of capital and credits for
public goods like reduction in pollution levels. The investment
could also be in the form of redeemable preferred shares that are
sold to the firm or new investors at an agreed time and with an
agreed yield. When the assisted companies mature they will seek
a new equity investment from both active partners and financial
institutions.
iii. (a) Donor funds can also be used to create loss reserves at the
project or financial institutional level. The level of the loss reserve
could be determined in terms of a percentage of overall portfolio
of the value which is generally between 5-20%. The loss
reserves should be sized at or even slightly greater reasonable
worst case scenario of the default rate estimated for the portfolio.
The loss reserves could be jointly funded by a donor and partner
financial institution. The loss reserve works best when a portfolio
consists of a large number of smaller loan transactions where a
statistical approach can be given to the credit structure of the
portfolio as a whole. Loan loss reserves achieve the highest level
of leverage and often be contributed by the manufacturer or the
financial institutions or even the donor.
15. The Committee is of the view that the special dispensation proposed with
regard to equity contribution, debt co-financing and guarantees should be
confined to projects of the size of between 1 MW and 5 MW.
Entrepreneurs who go in for projects above 5 MW do possess some
financial strength and have enough schemes to which support them
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Financial intermediaries can also play an important in innovative
financing. The Infrastructure Development Finance Corporation and the
Infrastructure Lease Finance Corporation can be requested to assist in the
development in the new an innovative models.
17. A major handicap which the committee faces was on account of lack of
necessary data regarding the functioning of mini-hydel biomass/gas
projects and SPV projects. The Ministry of Non-conventional Energy
Sources and IREDA were enable to give the full picture regarding the
details of the physical and financial performance of the projects managed
by them. The committee is therefore unable to make detailed and more
specific suggestions about the financing mechanism based on actual
performance of the relevant projects. It is suggested that a detailed
evaluation of the projects of mini hydel, wind energy, biomass, biogas,
SPV models which have already been commissioned. In the light of the
actual experience gained new models may be developed. A task force
comprising of the representative of Ministries of Power and Non-
Conventional Energy Sources, IREDA, REC, ICICI and IDFS and ILFC be
constituted to make detailed recommendations on innovative financing.
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iii. Favourable taxing structures can be evolved
for rural electrification schemes after taking into account that
electricity generation from these schemes has lower environmental
impact than generation from fossil fuels.
20 It would thus be seen that the problem is not merely a financial one.
Intricate problems relating to transfer of technologies to rural
communities and their education have got to be tackled with tact
and imagination to ensure smooth induction of systemic changes
This is indeed a venture into new and uncharted waters. The
approach has, therefore , got to be innovative and the process
of trial and error has to be necessarily gone through. The
proposed scheme has a vital role to play in the economic
development of the State. It is therefore, suggested that the
entire exercise including that of demonstration projects be
given the status of a Technology Mission. This would ensure
that the scheme gets the priority it deserves in the national
agenda for economic growth and reform
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Chapter – 7
Regulatory Issues
iii Include an assured price for buy back power generated by biomass
projects and wind power projects by the State Electricity Boards.
The details are given in Annexure 20. It would be seen from the
Annexures that the buy back prices range between Rs.2.25 per unit
with escalation at 5% for a period of 5 years in the case of biomass
projects. In the case of wind power projects the buy back price
ranges between Rs.2.25/kwh and Rs.2.89/kwh at 5% escalation. In
the states of Madhya Pradesh and Tamil Nadu no escalation is
allowed and in the state of West Bengal it is allowed on a case to
case basis.
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Biomass Technologies - Biogas Gasification
IDCOL financed a 250 kW biomass gasification based Power Plant
a local sponsor has developed this project. The Plant, the first ever its kind in
is one of various renewable energy activities of IDCOL. IDCOL provided concessionary loans
and grants, sourced from IDA and Global Environmental Facility to this project. The plant uses locally
available agricultural residues i.e. rice husk as fuel for power generation. The project started commercial
operation in October 2012.
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1. Gasifier
Unit
Parameter Description
Gasifier Type Downdraft
Capacity Total 250 kW
Rated Gas Flow 625 Nm3/hr (up to total 250 kW capacity)
Average Gas calorific value > 1,050 (Kcal/Nm 3)
Rated Biomass consumption Up to 300 kg/hr (for total 250 kW capacity)
Gasification Temperature 1050oC-1100oC
Gasification Efficiency Up to 75%
Temperature of Gas at Gasifier Outlet 250 to 400oC
Biomass Feeding Manual
Desired Operation Continuous (minimum 300 days/yr)
Typical Auxiliary Power Consumption Up to 11 kW
Typical Gas composition CO-20.62%, H 2-10.62%, CO -13.61%,
2 CH - 4Up to
4%, N2-52.62%
5. Environmental impact
Generally 4 types of effluent are generated from the gasification process; ash, char, tar, and waste water.
Ash is collected in wet condition. Around 20% of rice husk is made up of ash and the ash coming from the
gasifier contains 10 to 15% carbon by weight. The ash-laden water can be used as organic fertilizer or land
filling purpose. The plant has on site storage facility for ash. Char can be transformed into charcoal which
is used as a domestic fuel for cooking and heating. Tar can be either recycled or burnt in the gasifier or
used as black paint for the wooden materials like boat, wooden structures and construction of roads. The
plant has onsite storage facility to deposit waste water which needs to be changed in every three month.
6. Project Cost
Total cost of the project was around Tk. 2.5 crore. Financed by grant from World Bank (60%), IDCOL –
20% and DPPL 20%.
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Biomass Technologies – Biomass Briquetting Technology
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