bagasse-based cogeneration option, which started as a cost-saving measure by sugar companies when the industry was reeling under margin pressure a few years ago, is fast turning into a money-spinning option.
Co-generation is the concept of producing two forms of energy from one fuel, of which one is heat and the other may be electricity or mechanical energy.
Sugar producers across the country, who are fast shifting to bagasse-based generation option to meet captive power needs, are increasingly exporting surplus to the grid from their plants and claiming CDM (Clean Development Mechanism) benefits in return.
Among manufacturers exploiting the cogeneration option, DCM Shriram Consolidated Ltd (DSCL) is ramping up its bagasse-based generation and exporting surplus power to the tune of 27.5 MW to the Uttar Pradesh Power Corporation Ltd (UPPCL) and getting CDM benefits in return.
Sri Chamundeswari Sugars is building a 26-MW cogeneration plant at its factory in Karnataka, of which 18 MW will be an exportable surplus to the State-owned utilities.
The Deoband Bagasse Cogeneration Power project is exporting surplus electricity to the tune of around 20 MW to UPPCL. Eyeing contracts
Global power equipment major ABB is among the majors eyeing contracts for supplying the automation systems and electrical balance-of-plant to upcoming cogeneration units.
In case of bagasse-based cogeneration plants, power comes from burning bagasse, the fibrous residue remaining when sugarcane is crushed to make sugar.
“The cogeneration system needs to be encouraged in the overall interest of energy efficiency and also grid stability.
A significant potential for cogeneration exists in the country, particularly in the sugar industry,” a Central Electricity Regulatory Commission (CERC) official said.
With conservative estimates suggesting a potential of over 20,000 MW power from co-generation in India, the CERC has now directed state regulators to promote arrangements between co-generator unit owners and distribution utilities for purchase of surplus power from such plants.
With spiralling prices of fossil fuels translating into higher captive power generation costs, manufacturers with sugar or rice mills, distilleries, petrochemical plants, besides fertiliser, steel, cement, paper and aluminium units, are increasingly shifting to the cheaper co-generation option. Price variation
DCSL, which has a bagasse-based cogeneration capacity of 70.5 MW currently, is adding another 24 MW during the current fiscal.
The viability of bagasse-based generation, Mr Ajay Shriram, Chairman and Senior Managing Director of DSCL, said, “depends upon the prevailing sale price of bagasse in the market. Unlike coal and oil, the price of bagasse varies widely from season to season.
However, against oil, the price is likely to remain competitive always but against coal it may not. With CDM benefit, the viability improves… DSCL has gone into cogeneration for export in a big way due to the existence of CDM benefit.”
DSCL received its full claim of Rs 1.34 crore during the last financial year.
India is expected to add 1,200 MW bagasse-based power capacity during the ongoing Eleventh Plan period.
This would be nearly twice the 750 MW added during the Tenth Plan. India, which is among the largest sugar producer in the world, generates nearly 40 million metric tonne (MMT) of bagasse, most of which is now finding use as a captive boiler fuel.
Co-generation is the concept of producing two forms of energy from one fuel, of which one is heat and the other may be electricity or mechanical energy.
Sugar producers across the country, who are fast shifting to bagasse-based generation option to meet captive power needs, are increasingly exporting surplus to the grid from their plants and claiming CDM (Clean Development Mechanism) benefits in return.
Among manufacturers exploiting the cogeneration option, DCM Shriram Consolidated Ltd (DSCL) is ramping up its bagasse-based generation and exporting surplus power to the tune of 27.5 MW to the Uttar Pradesh Power Corporation Ltd (UPPCL) and getting CDM benefits in return.
Sri Chamundeswari Sugars is building a 26-MW cogeneration plant at its factory in Karnataka, of which 18 MW will be an exportable surplus to the State-owned utilities.
The Deoband Bagasse Cogeneration Power project is exporting surplus electricity to the tune of around 20 MW to UPPCL. Eyeing contracts
Global power equipment major ABB is among the majors eyeing contracts for supplying the automation systems and electrical balance-of-plant to upcoming cogeneration units.
In case of bagasse-based cogeneration plants, power comes from burning bagasse, the fibrous residue remaining when sugarcane is crushed to make sugar.
“The cogeneration system needs to be encouraged in the overall interest of energy efficiency and also grid stability.
A significant potential for cogeneration exists in the country, particularly in the sugar industry,” a Central Electricity Regulatory Commission (CERC) official said.
With conservative estimates suggesting a potential of over 20,000 MW power from co-generation in India, the CERC has now directed state regulators to promote arrangements between co-generator unit owners and distribution utilities for purchase of surplus power from such plants.
With spiralling prices of fossil fuels translating into higher captive power generation costs, manufacturers with sugar or rice mills, distilleries, petrochemical plants, besides fertiliser, steel, cement, paper and aluminium units, are increasingly shifting to the cheaper co-generation option. Price variation
DCSL, which has a bagasse-based cogeneration capacity of 70.5 MW currently, is adding another 24 MW during the current fiscal.
The viability of bagasse-based generation, Mr Ajay Shriram, Chairman and Senior Managing Director of DSCL, said, “depends upon the prevailing sale price of bagasse in the market. Unlike coal and oil, the price of bagasse varies widely from season to season.
However, against oil, the price is likely to remain competitive always but against coal it may not. With CDM benefit, the viability improves… DSCL has gone into cogeneration for export in a big way due to the existence of CDM benefit.”
DSCL received its full claim of Rs 1.34 crore during the last financial year.
India is expected to add 1,200 MW bagasse-based power capacity during the ongoing Eleventh Plan period.
This would be nearly twice the 750 MW added during the Tenth Plan. India, which is among the largest sugar producer in the world, generates nearly 40 million metric tonne (MMT) of bagasse, most of which is now finding use as a captive boiler fuel.
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