India to benchmark biomass pellet prices

India's Power Ministry has decided to benchmark the prices of biomass pellets used for co-firing in thermal power plants (TPPs).
The decision comes due to the evolving market conditions for biomass pellets and requests received from stakeholders including TPPs, pellet manufacturers, farmers, bankers etc, according to the Ministry.
“The benchmarked price shall take into account the business viability, impact on electricity tariff and efficient and faster pellet procurement by power utilities. Price benchmarking of pellets will enable TPPs and pellet vendors to establish a sustainable supply mechanism for co-firing of pellets,” it added.
The benchmarked price, as finalised by the committee under the Central Electricity Authority (CEA), will be effective from 1 January 2024.
“Till the time the recommendations of the committee are implemented, the power utilities shall go for short-term tenders for meeting the immediate requirement of biomass pellets for their TPPs,” the Ministry added.
Co-firing of biomass in coal-based power plants is a key policy of the government towards energy security, reduced use of fossil fuels and at the same time to increase income of farmers. Revised policy will help in achieving these goals more quickly, Power Minister R K Singh said.
Explaining the decision, Power Secretary Alok Kumar added the decision would incentivise farmers, entrepreneurs and thermal power utilities to strive to establish a sustainable biomass ecosystem, achieve the targets for co-firing, reduce stubble burning and help to ensure a cleaner and greener future for the citizens of India.