Apart from Price Volatility, what are the other challenges that the biogas sector faces in India? Find out here!
Gas, power and bio-fertilizer offtake
Along with Bio-CNG, biogas is also used in generating electricity after purification. Additionally, a useful byproduct – biofertilizer is also produced. The three products of biogas require a guaranteed offtake to ensure a flourishing sector. Bio-CNG can be injected into the existing gas grid and used as transport fuel. Currently, BIS specifies gas standards for transportation purposes. Gas companies may use the same standards for quality check of the gas injected into the grid.
In case of power, the electricity generated contributes towards fulfilling the RPO of the DisComs which should ensure a guaranteed offtake of electricity. But such is not the case. CERC proposes a tariff of Rs. 7.56/kWh for electricity from biogas based generation plants. Since biogas is not a very prominent technology, individual states do not have biogas specific feed-in-tariffs. The DisComs are forced to procure electricity at specified rates which may not be acceptable to the DisComs. In such a case, competitive reverse auctions help in lowering the prices just as in case of solar PV pricing. Power from wind energy also applies this tool for pricing.
The byproduct – biofertilizers – also require an attractive market. Here, the state-owned fertilizer companies can help in marketing the byproduct in national and international platforms. The companies may specify standards for the fertiliser as per the market requirement to ensure proper demand. Owing to the growing demand for organic produce, this byproduct opens up a good business opportunity as well. As per the City Compost Policy, a public sector undertaking and a governmental organisation must use compost generated by the city waste and agricultural residue for their horticulture purposes. The Policy also specifies monetary assistance for the market development of compost. A guaranteed offtake of the products will open ample opportunities for the biogas sector.
We need a market system that incorporates a mix of energy sources easily to make the integrated energy mix mainstream in the country.
In the next post, we shall discuss challenges pertaining to the community-based plants.
Read the other parts of #TechWindow Series – here