MNRE Approves ₹8.5 Billion National Bioenergy Program

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The Ministry of New and Renewable Energy (MNRE) has notified the National Bioenergy Program, valid from FY 2021-22 to FY 2025-26.

The program has been recommended for implementation in two phases. A budget outlay of ₹8.58 billion (~$104.66 million) has been approved for Phase-I.

Out of the total budget, ₹6 billion (~$73.18 million) has been approved for the waste-to-energy program, ₹1.58 billion (~$19.27 million) for the biomass program, and 1 billion (~$12.19 million) for the biogas program.

The National Bioenergy Program will comprise the following:

  • Biomass Program to support the use of pellets and briquettes in power generation and non-bagasse-based power generation projects
  • Waste-to-Energy Program (Program on energy from urban, industrial, and agricultural waste and residue) to support large biogas, bio-CNG, and power plants (excluding municipal solid waste)
  • Biogas Program to support small and medium-sized biogas projects in rural areas

The broader objectives of the program are to reduce stubble burning by utilizing surplus agricultural residue, provide an additional source of income to farmers through the sale of surplus agro residue,  enable better environmental practices, and reduce pollution.

Biomass Program

CFA funding pattern

The central financial assistance (CFA) for briquette and pellet manufacturing projects has been set as ₹900,000 (~$10.978) per metric ton/hour manufacturing capacity with a maximum CFA of ₹4.5 million (~$54,891) per project.

For biomass (non-bagasse ) cogeneration projects, the CFA has been set as ₹4 million (~$48,792)/MW (on installed capacity) with a maximum CFA of ₹50 million (~$609,900) per project.

The performance inspection agency will be provided a service charge of ₹25,000 (~$305) per metric ton per hour, with a maximum ₹100,000 (~$1,225) per project towards monitoring project progress.

The inspection agency will be provided ₹100,000 (~$1,219)/MW, with a maximum of  ₹500,000 (~$6,099) per project as an incentive or service charge towards implementation progress, performance inspection, and verification of generation record, and post-installation monitoring of biomass (non-bagasse) cogeneration projects.

The proposals for setting up briquette, pellet manufacturing plants, and biomass (non-bagasse) cogeneration projects will only be considered under this program. Bagasse-based cogeneration projects are not covered under this program.

Commissioning timeline

The time for commissioning the projects will be 12 months for briquette and pellet manufacturing projects and 24 months for biomass (non-bagasse) cogeneration projects.

Waste-to-Energy Program

CFA funding pattern

For biogas projects, the CFA has been set as ₹2.5 million (~$30,625) per 12,000 cubic meters/day, with a maximum of ₹50 million (~$612,500)/project.

BioCNG projects, enriched biogas projects, and compressed biogas projects: The CFA will be ₹40 million (~$490,000) per 4,800 kg/day for bio-CNG generation from new biogas projects, ₹30 million (~$367,500) per 4,800 kg/day for bio-CNG generation from existing biogas projects, and the maximum CFA for both the cases has been set as ₹100 million (~$1.23 million).

Power based on biogas: The CFA will be ₹7.5 million (~$91,875)/MW for power generation from new biogas projects and ₹5 million (~$61,250)/MW for existing biogas projects. The maximum CFA for both cases will be ₹50 million (~$612,500) per project.

Power based on bio and agro-industrial waste: The CFA has been set as ₹4 million (~$49,000)/MW, and the maximum CFA has been set as ₹50 million (~$612,500)/project.

Biomass gasifiers for electricity and thermal applications: The CFA will be ₹2,500 (~$30.625)/kW with dual fuel engines for electrical applications and ₹15,000 (~$183.75)/kW with 100% gas engines for electrical applications. The CFA will be ₹200,000 (~$2,450)/300 kW for thermal applications.

Commissioning timeline 

The time for commissioning has been set as 24 months for waste-to-energy projects and 12 months for biomass gasifiers from the date of approval.

Biogas Program

CFA funding pattern

For northeastern states, the CFA will be ₹17,000 (~$208.25) for biogas projects producing one cubic meter of biogas per day, ₹22,000 (~$269.5) for two cubic meters to four cubic meters of biogas per day, ₹29,250 (~$358.31) for six cubic meters of biogas per day, ₹34,500 (~$422.63) for eight cubic meters to ten cubic meters of biogas per day, ₹63,250 (~$774.81) for 15 cubic meters of biogas per day, and ₹70,400 (~$862) for 20 cubic meters to 25 cubic meters of biogas per day.

Medium-sized biogas projects

The CFA for biogas projects of size above 25 cubic meters to 2,500 cubic meters of biogas generation per day are as given below:

National Bioenergy Porgram-Final

Commissioning timeline

For small biogas projects (1 cubic meter to 25 cubic meters), the installation work of the biogas plants should start immediately after the allocation of annual targets. The deadline for the completion of the work will be the end of the particular financial year unless prior approval for an extension has been approved by MNRE.

Medium-sized biogas projects (above 25 cubic meters to 2,500 cubic meters) will have to be commissioned within 12 months and, in any case, not more than 24 months from the project’s approval.

In May last year, the Ministry of Power decided to set up a national mission on the use of biomass in coal-powered thermal power plants. The mission’s main purpose was to address rampant air pollution caused by burning farm stubble and reduce the carbon footprint in thermal power generation.

MNRE extended the validity of its biomass-based cogeneration program by a year until March 31, 2021.