Andhra Pradesh Sets Variable Cost for Biomass and Bagasse-Based Power Projects

The cost determined is for the period between April 1, 2019, and March 31, 2024


To reach the government’s goal of installing 175 GW of renewable energy by 2022, all sources of renewable energy will have to contribute – not just solar and wind. In a country where agriculture is the most important sector of the economy, biomass plants which convert waste into electricity have an important role to play.

The Andhra Pradesh Electricity Regulatory Commission (APERC) has issued an order setting the variable cost of power generated from biomass, industrial waste, and bagasse-based power projects for the 5 years between April 1, 2019, and March 31, 2024.

The order is up for comments from stakeholders up to April 15, 2019.

The APERC has kept the variable cost of power from the sources mentioned above unchanged as there was no information available based on which the commission could have changed the variable cost.

The variable cost for biomass-based power projects is set at ₹4.81 (~$0.070)/kWh, for bagasse-based power projects, at ₹3.07 (~$0.045)/kWh and for industrial waste-based power projects at ₹4.81 (~$0.070)/kWh.

This tariff will be applicable for the existing power projects, and not the ones that have only been proposed.

At the beginning of 2018, the central government’s cabinet approved the National Policy on Biofuels – 2018. In May 2018, a program to support the promotion of biomass-based cogeneration in sugar mills and other industries was announced by the MNRE.

After the issuance of these two policies, the state electricity regulatory commissions have been proactively working towards regulating this sector.

For instance, recently, the Rajasthan Electricity Regulatory Commission (RERC) issued new guidelines to amend its regulations concerning the terms and conditions for the determination of tariff for renewable sources-(biomass, biogas and biomass gasifier based power plants) that were passed in 2015.

Then, back in December 2018, the Ministry of New and Renewable Energy (MNRE) amended two clauses in the policy to support the promotion of biomass-based cogeneration projects in sugar mills and other industries in the country up to March 2020.

In October 2018, the Telangana State Electricity Regulatory Commission (TSERC) passed an order regarding the determination of generic tariff for bagasse-based power plants in Telangana for the control period 2018-2020. The commission determined the levelized fixed cost to be at ₹2.23 (~$0.03)/kWh. In the same month, the Maharashtra Electricity Regulatory Commission (MERC) approved Maharashtra State Electricity Distribution Company Limited’s (MSEDCL) proposal to initiate a competitive bidding process followed by reverse e-auction to procure 200 MW grid-connected bagasse-based cogeneration power with the upper tariff ceiling of ₹4.00 (~$0.054)/kWh.