BI0-ENERGY ROAD MAPENERGY PLANTATION

9/28/2011 Dalkia Energy Services Ltd. G C Datta Roy

The Great Eastern Centre, Ryder Tower, First Floor, 70, Nehru Place, New Delhi -110019 Tel. +91 11 4079 1100 Fax. +91 11 4079 1101 Email : desl@dalkia.co.in

Table of Contents
1 2 3 4 5 6 Introduction................................................................................................................................. 5 Executive Summary...................................................................................................................... 6 Potential-Energy Plantation ......................................................................................................... 8 Energy Plantation-Present Scenario ........................................................................................... 14 Energy Plantation-Case Studies .................................................................................................. 19 Concluding recommendation ..................................................................................................... 23

List of Tables
Table 1: target for Energy Plantation 2017............................................................................................... 6 Table 2: Energy plantation-Barriers & strategy......................................................................................... 7 Table 3: Availability of wasteland............................................................................................................. 8 Table 4: land suitability for energy plantation ........................................................................................ 11 Table 5: Overall potential ...................................................................................................................... 13 Table 6: Target for Jatropha plantation .................................................................................................. 14 Table 7: Bio-fuel plantation policy review .............................................................................................. 15 Table 8: Status-Energy Plantation-Bio-diesel .......................................................................................... 15 Table 9: Illustrative case studies-contract farming ................................................................................. 17 Table 10: Cost of energy plantation ....................................................................................................... 20 Table 11: Transtech biomass project particulars .................................................................................... 21 Table 12: Forest land identified by TPPL ................................................................................................ 22 Table 13: Policy recommendations ........................................................................................................ 24

List of Figures
Figure 1: State-wise availability of Wasteland ........................................................................................ 10 Figure 2: Plantation potential low yield variety ...................................................................................... 12 Figure 3: Plantation potential for high yield variety................................................................................ 13

Abbreviations
BDO CDM DC DESL DLEC DFID DFO DPR GEF JFM MNRE NOC NPA IISc IPP PPA RERC RREC SBI SERC SNA SU UNDP Block development Officer Clean Development Mechanism District Collector M/S Dalkia Energy Services Limited District level empowered committee Department for International Development District Forest Officer Detailed Project Report Global Environment Facility Joint Forest Management Committee Ministry of New and Renewable Energy No Objection Certificate Non-performing Asset Indian Institute of Science, Bangalore Independent Power Producer Power Purchase Agreement Rajasthan Electricity Regulatory Commission Rajasthan Renewable Energy Corporation State Bank of India State Electricity Regulatory Commission State Nodal Agency State Utility United Nations Development Programme

DWDU District Watershed Development Unit

NREGS National Rural Employment Guarantee Scheme

Introduction

Ministry of New And Renewable Energy (MNRE) is currently implementing a UNDP/GEF assisted project on Removal of Barriers to Biomass Power Generation in India. The key objective of the project is to accelerate the adoption of environmentally sustainable biomass power technologies by removing the barriers indentified, thereby laying the foundation for the large scale commercialization of biomass power through increased access to financing. The project management cell established in the MNRE for implementation of the above project has retained services of M/s Dalkia Energy Service Ltd. (DESL), New Delhi for preparing a Road Map for Biomass Energy for accelerated development of different types of biomass energy projects and programs primarily in the rural areas. In order to accomplish the overall task, several primary studies were contemplated for which support is being provided by India office of Department for International Development (DFID), UK. The work carried out under the assignment and the balance tasks performed were reviewed in a meeting with Dfid and MNRE officials in a meeting chaired by Joint Secretary, MNRE on 18th August, 2011. In the meeting, it was decided that the balance resources available under the Dfid mandate would be best utilised by: Carrying out a field study for developing better understanding the policy related hurdles in development of energy plantation. Obtaining some more data for making a better quality recommendation report for addressing tariff related issues.

Accordingly, DESL consultants have carried out further study of plantation related issues by undertaking a field study in the State of Rajasthan and interaction with few developers. These studies have been carried out in the month of September, 2011. Similarly, lot more inputs have been obtained on tariff related issues from project developers. The tariff recommendation note has been revised accordingly and circulated separately. This report is being presented on energy plantation capturing the present development status, policy issues and hurdles and recommendations on policy simplification and implementation and targets for power capacity addition in the 12th plan period.

Executive Summary

Energy plantation has been identified as one of the key intervention areas for development of biomass energy system in India. Significant scope is there for utilising various kinds of wasteland for development of integrated energy plantation and power generation systems. India has approximately 50 million hectares of degraded wasteland that lie outside the areas demarcated as national forests, and another 34 million hectares of protected forest area, in much of which tree cover is severely degraded. A massive program of energy plantation consisting of fast-growing tree crops such as Bamboo, Casuarina, and Eucalyptus can serve as the raw material for a national network of small, decentralized biomass power plants.1 Despite very high potential, there has been very little progress in harnessing wasteland for productive exploitation. A systematic study (desk research and field investigation) was undertaken to assess: The actual potential for integrated plantation and bio-energy system Current status of development Key barriers and possible steps for overcoming the same

This report covers the findings from this study. Considering the current status of development and complex developmental issues and time required for growing of plantation crop, a modest target of 1015 MW has been set for 12th plan period as indicated in the following table.
Table 1: target for Energy Plantation 2017

States Andhra Pradesh Chattisgarh Gujarat Jharkhand Karnataka Maharashtra MP Rajasthan Tamil Nadu Mizoram

Potential (MW) Arid High yield 1052 0 0 307 495 0 0 101 282 629 276 584 634 0 14094 0 308 457 0 0 17141 2078

Total 1052 307 495 101 911 860 634 14094 765 0 19219

Target MW 100 30 50 10 90 90 60 500 75 10 1015

The key barriers have been identified by analyzing of experiences gained from different projects and field study. Following table summarizes the findings and recommended steps for removal of the same.
1

Indian Vision 2020-Planning Commission, Government of India

Table 2: Energy plantation-Barriers & strategy

Issue Policy and program administration

Present status There are two central policies and few State policies DLEC to administer Green India & Plantation whereas it is DWDU for water shed development

Assessed barriers Possible Implementation hurdles as there are different institutional arrangement and it is proposed to use same primary resource base for implementation

Present best practice None identified

Recommendation It is recommended that the same District Level Committee, DLEC is empowered to administer all the three programsWater Shed development, Green India Mission and Energy Plantation and ensure optimum allocation of resources for best results overall. State Energy development Agencies

Nodal Agency

Different in different States for different schemes

Multiple transaction processes

OrissaOREDA RajasthanRREC Orissa & Madhya PradeshDistrict Level Committees are required to identify land DLEC

Land identification

Different methods in different States

Time consumed in identifying Government/Panchayat land Parcel size Fencing & protection cost

State Nodal Agency to prepare a record of land bank based on identification done by DLEC

Land allocation

DLEC

Use of private land Implementation

Permitted in few States JFM/Gram Sabha with budgetary support from NREG/Government schemes and technical inputs from Agricultural department/Power plant developers Exclusive use of local resources

Not permitted in most of the States Land ceiling Act This is proving to be the biggest hurdle due to several reasons like: Non-formation of JFM Impediment in forming the JFM Non interest of Panchayat/lack of motivation/conflict of interest-public vs. private benefits Non availability of labour and nonallowance of mechanised farming Delay in getting unique code as the same is

Tamil Nadu

Water shed developmen t schemeSelection of Project Implementat ion Agencies Tamil NaduContract farming

DLEC-however, process needs to be simplified to reduce the transaction time It should be permitted with livelihood safe guard for sellers Two alternative schemes could be adopted: 1. As provided in the water shed development scheme 2. DLEC/Panchayat to tender for attracting private developers including the Power Plants-terms of tender can be designed for getting maximum benefits to the local community and faster development of waste land for sustainability of the

Financing

Mainly from NREG/Partly from other running schemes like BRGF

Monitoring

Not clear except for the Watershed development by District Planning Committee

provided only as per an approved budget itemdifficult to include project mid-stream. No scheme for private investment in developmental activities Bank finance not available due to allocation and development policy hurdles Finance for R&D for varietal development also not available Remedial action in case of delay by JFM/Panchayat in starting and maintaining development work

None

power plants Allowing contract farming in private land Inclusion of Energy Plantation under agriculture Developing credit enhancement scheme under MNRE patronage Development subsidy for few pilots 3. DLEC to develop and implement a monitoring system

Watershed developmen t project

Potential-Energy Plantation

Wasteland available in the country can be utilised for energy plantation as per the varietal suitability. Several studies have been carried out by different agencies at different points of time to assess the availability of wasteland and potential for growing plantation crop.
Table 3: Availability of wasteland

S. No.

State

Wasteland Area according to Biomass Atlas (Sq. Km) 81.00 121.00 327.00 512.00 545.00 649.00 701.00 1902.00 2169.00

Wasteland Area according to Wasteland Atlas of India (Sq. Km) 2458.69 12790.06 1994.41 1019.50 16648.27 4815.18 3280.88 7027.47 3865.76

1 2 3 4 5 6 7 8 9

Kerala Uttaranchal West Bengal Punjab Orissa Nagaland Sikkim Manipur Meghalaya

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Total

Haryana Tripura Bihar Mizoram Assam Tamil Nadu

2440.00 2878.00 4020.00 4480.00 6544.00 6929.00

2347.05 1315.17 6841.09 6021.14 8778.02 9125.56 22470.05 5743.84 11670.14 14438.12 10988.59 11817.82 38788.22 73754.38 40042.98 38262.81 21350.38 93689.47 496.27 83.34 337.30 472261.96

Himachal Pradesh 9012.00 Arunachal Pradesh 9226.00 Jharkhand Karnataka Uttar Pradesh Chhattisgarh Andhra Pradesh 10827.00 15035.00 15555.00 16925.00 27987.00

Jammu & Kashmir 68946.00 Madhya Pradesh Maharashtra Gujarat Rajasthan Goa Delhi Union Territory 73290.00 74386.00 77287.00 109753.00 NA NA NA 542527.00

Wasteland Data in Biomass Atlas is based on old ISRO map while data in Wasteland Atlas is based on Latest Wasteland Maps 2005-06 prepared based on IRS-P6, LISS III data for three season data. Planning commission vision 2020 data indicates higher availability at 80 Mn Ha2 against about 50 as per BAS. Availability of the wasteland in the different States on the basis of Wasteland Atlas is presented graphically as follows.

Figure 1: State-wise availability of Wasteland

DESL has carried out an exhaustible analysis to estimate the plantation potential based on: Soil characteristics as provided in the atlas Rainfall data as per information available in the public domain Requirement for various plantation crops as obtained from the research agencies/developers engaged in plantation work.

Following two tables show the potentials for essentially two generic varieties of energy plantation-high yield varieties like Bamboo/Melia Dubia and low yield ones like Juliflora.

Indian Vision 2020-Planning Commission, Government of India

Table 4: land suitability for energy plantation

% to Total Wasteland Area 1.48% Land suitable for Juliflora Plantation Yes Land suitable for High Yield Plantation Yes

S. No.

Classification of Wasteland in India Gullied and/or ravinous landMedium Gullied and/or ravinous landDeep/very deep ravine Land with dense scrub

Area (Sq km)

Remarks

6999.03

1714.83

0.36%

No

No

Very Deep Ravines Land become water logged in monsoon; hence unsuitable for plantation Land with scrub is used as pastures, hence cannot be considered -Same as above Plantation is not possible in water logged area -Same as above

93389.55

19.77%

No

No

4 5 6 7 8

Land with open scrub Waterlogged and Marshy landPermanent and Waterlogged Marshy land-Seasonal Land affected by salinity/alkalinityModerate Land affected by salinity/alkalinityStrong

91633 2532.46 2990.84 5429.83 1737.81

19.40% 0.54% 0.63% 1.15% 0.37%

No No No Yes Yes

No No No Yes No

High Yield Plantation cannot be grown in strong saline/alkaline sand Cultivation area cannot be considered for energy plantation on account of food security -Same as above

Shifting cultivation area-Current Jhum

5625.07

1.19%

No

No

10

11

Shifting cultivation area-Abandoned Jhum Under utilised/degraded forest-Scrub dominated Agricultural land inside notified forest land

4608.45

0.98%

No

No

85809.54

18.17%

Yes

Yes

12

16386.08

3.47%

No

No

-Same as above

S. No.

Classification of Wasteland in India Degraded pastures/grazing land Degraded land under plantation crops Sands- Riverine Sands- Coastal sand Sands- Desert Sand Sands- Semi-stabilized to stabilized (>40m) dune Sands- Semi-stabilized to stabilized moderately high (1540m) dune Mining Wastelands

% to Total Area (Sq km) Wasteland Area 7196.44 1.52%

13

Land suitable for Juliflora Plantation No

Land suitable for High Yield Plantation No

Remarks

14 15 16 17 18

316.22 2439.85 719 5280.07 11188.21

0.07% 0.52% 0.15% 1.12% 2.37%

Yes Yes Yes Yes Yes

Yes Yes No No No

-Land for pastures cannot be considered for energy plantation as it provides fodder for cattle

High Yield Plantation cannot be grown in coastal sand High Yield Plantation cannot be grown in sandy soil -Same as above

19

15627.63

3.31%

Yes

No

-Same as above

20

505.35

0.11%

No

No

21

Industrial wastelands

63.99

0.01%

No

No

22

Barren rocky area

69373.92

14.69%

Yes

No

23

Snow cover and/or glacial area

40694.8

8.62%

No

No

-Productive Soil is already eroded, hence cultivation is not possible -As most of industrial land is private, it is difficult to get this land for plantation High Yield Plantation requires min. 800mm rainfall and hence cannot be grown in barren and rocky area Both these plantation cannot be grown in snow

The plantation potential for different States for the two generic varieties have been accordingly worked out and graphically shown below.

Figure 2: Plantation potential low yield variety

Available wasteland in the State of J&K is mostly in the higher hilly region and as such may not be ailable economically feasible for utilising for energy plantation. Same would be true for Uttaranchal. The entire western region and some of the southern States are ideal candidates for promoting such crops. Northideal North Eastern State like Mizoram also offers good potential.

Figure 3: Plantation potential for high yield variety :

The situation is more or less similar as in case of low yield variety except that some more North-Eastern North States like Assam and Manipur also provide good opportunity. The overall power potential considering the feasible major opportunities has been assessed at over 65000 MW as shown in the following table.
Table 5: Overall potential

Energy Plantation-Present Scenario

Land usage is a very sensitive subject in India even for allocation of wasteland for developmental activities. Following specific policy framework exists, which can be leveraged for development of integrated energy plantation & power generation projects. 1. 2. 3. 4. Energy plantation for bio-fuel Green India & Water shed development Contract farming and Specific policy on plantation for power generation

Energy Plantation for bio-fuel A national bio-diesel program was launched in 2003 to be implemented in two phases:

1. Phase I consisting of a Demonstration Project to be implemented by the year 2006-07 with an investment of Rs. 1500 Crore ($300 million) on 400,000 ha. 2. As a follow up of the Demonstration Project, Phase II will consist of a self sustaining expansion of the programme beginning in the year 2007 leading to production of Biodiesel required in the year 2011-12. It was assessed that about 13.4 Million hectare land would be immediately available for the same as indicated in the following table.

Table 6: Target for Jatropha plantation

Forest areas Agriculture (boundary Plantation)

Agriculture (Agri-forestry)

Cultivable fallow lands

Wastelands under integrated watershed development

Strip lands such as roads, railways, canal banks

Total

Additional wastelands

3.0

3.0

2.0

2.4

2.0

1.0

13.4

4.0

Taking advantage of the national mission, large number of States developed policy framework for encouraging energy plantation for bio-fuel and development of processing facilities for manufacture of bio-diesel. Most of the States seem to have followed a common approach in developing policies for land use and farming methodology as would be seen from the following summary table prepared for few States based on information available in the public domain.

CJP, 2011

Table 7: Bio-fuel plantation policy review

State

Nodal agency

Land classification Barren & uncultivable; Boundary & fence of farms Non-forest wasteland

Orissa

OREDA

Madhya Pradesh

MP Agroindustrial development board

Land identification & allotment District level committee monitoring by task force District level committee under collector For allocation of land <50 Ha district level committee under a Minister & for higher level at the State level

Allottees/allocation Mode of priority farming Vanrakshan JFM/Contract Samities on long term lease and self help groups Rank ordering of 7 Any mode different categories starting with landless farmers at number 1 to private developers (other categories)at number 7

Karnataka

NonDecentralised Agricultural land Boundary lands of Estates From the above, following inferences can be made:

Bio-fuel development authority

Most self help, NGO & Social groups

Any mode

Private developers role in farming is practically not there However, such developers can support other groups through provision of inputs and buyback of outputs.

As per the information in public domain as reproduced in the following table, the scheme seems to have very limited success and is presently far from the goal set by the mission.
Table 8: Status-Energy Plantation-Bio-diesel
4

Demonstration phase 2003 to 2007: Ministry of Rural Development appointed as nodal ministry to cover 400,000 hectares under jatropha cultivation. This phase also proposed nursery development, establishment of seed procurement and establishment centres, installation of trans-esterification plants, blending and marketing of biodiesel. 2005 MoPNG announced bio-diesel purchase policy in which Oil Marketing
4

Public & private sector, state government, research institutions (Indian and foreign) involved in the program achieved varying degrees of success. Cost of bio-diesel production higher (20 to 50 percent) than

India Bio-fuel annual Jan, 2010

Companies (OMC) would purchase bio-diesel across 20 procurement centres across the country to blend with high speed diesel w.e.f January 2006. Purchase price set at Rs 26.5 per litre Self Sustaining Execution phase 2008 to 2012: Targeted to produce th sufficient biodiesel for 20 percent blending by end of 11 (2008-12) five year plan

purchase price. No sale of biodiesel. Lack of large scale plantations, seed collection and extraction infrastructure, buy-back arrangements, capacity and confidence building measures among farmers impeded the progress of this phase.

Water shed development & Green India missions The Water shed development mission launched in 2008 and the Green India Mission launched in 2011 have components for development of forestry through plantation. The watershed mission has proposed a multi-tier ridge to valley sequenced approach for project development. In the upper reaches, which are mostly hilly and forested, the onus of implementation would mainly lie with the Forest Departments and the Joint Forest Management Committees (JFMC). The second tier is the intermediate tier or the slopes, which are just above the agricultural lands. In the intermediate slopes, the Watershed Management approach would address all the necessary issues by looking at all the best possible options including treatment, cropping pattern, horticulture, agro-forestry etc. As to the third level of the plains and the flat areas, where typically, the farmers are operating, there would be a large concentration of labour intensive works. The watershed development process would be synergized with the employment generating programmes such as the National Rural Employment Guarantee Scheme (NREGS), Backward Regions Grant Fund (BRGF) etc thus providing strong coordination. The institutional process involvement of multi-tier agencies for managing the various processes: District Watershed Development Unit (DWDU) for overall management at district level Watershed committees under Panchayat/Gram Sabhas for micro management Implementation by Voluntary Organisations (Project Implementation Agencies) Monitoring by District planning committee/State level nodal agencies The Green India Mission aims at addressing climate change by: Enhancing carbon sinks in sustainably managed forests and other ecosystems; Enhancing the resilience and ability of vulnerable species/ecosystems to adapt to the changing climate; and Enabling adaptation of forest dependant local communities in the face of climatic variability The mission intends to cover additional 10 million Ha of wasteland under forest coverage. The development plan has adopted an integrated cross-sectoral approach including with rural energy development program. The project is proposed to be managed in a decentralised manner with total involvement of the local community. Local communities will be required to play a key role in project governance and implementation. Gram Sabha and its various committees/groups including JFMCs, CFM groups, Van Panchayats, etc. would be strengthened as institutions of decentralized forest governance. Likewise, the Mission would support

revamping/strengthening of the Forest Development Agencies. The Mission would support secured community tenure, capacity building for adaptive forest management and livelihood support activities e.g. community based NTFP enterprises5. Contract farming The system of contract farming with or without policy support has been in practice for long. Some of the States provide strong policy support for both land allocation and development. However, most of the States are sensitive about land allocation. Amongst the States having high potential for energy plantation, Gujarat, Rajasthan, Madhya Pradesh, Tamil Nadu and Orissa have established track record of having encouraged such developments. States in the North Eastern States have also responded positively to informal enquiries. Some States like Maharashtra and Karnataka are more sensitive about land matters6. The following table shows summary of some illustrative case studies.
Table 9: Illustrative case studies-contract farming
7

State Assam

Name of the scheme Area Development Scheme Basmati rice

Scheme in brief The Scheme envisages cultivation of Bamboo on wastelands. Assured procurement

Targeted benefits Farmers would be benefited in terms of production and income Crop grown through organic farming methods prescribed by it. Assured availability of quality produce in required quantities at pre decided rates i) Achievement of leadership by delivering value to agriculture ii) Social engineering through community service iii) Serving as a complete solution provider to farmers and building lasting relationship Assured supply

Bihar

Chattisgarh

MSSL Mahindra Krishi Vihars

Haryana

TATA Kisan Sansar (TKS) through TATA Krishi Vikas Kendra (TKVK)

Supply of quality inputs, technical guidance, and buy back of produce at pre decided price. Enhanced farm productivity & income

Himachal Pradesh

Madhya Pradesh
5 6

Himalayan International Limited Cultivation of 3 herbs Reliance Life Science Ltd

Assured purchase of crop by the company at a prefixed price Purchase is affected through traders. No direct benefit to

Availability of aromatic oils for export purposes

Draft mission document May 24, 2010 Report of Working Group of MNRE on Energy Plantation 7 State level policy document available in respective websites

Maharashtra

aromatic oils S. H. Kelkar Group of Companies Patchouli (Aromatic oil plant) Vardhaman led Consortium of spinning mills of North India & State Bank of Patiala Village Cluster adoption program

farmers. i) Availability of tissue culture planting material ii) Marketing facility by the company Productivity of cotton increased from 4.6 quintals in 2002-03 to 9.6 quintals per acre. ii) Expenditure reduced from Rs.7995 per acre in 2002- 03 to Rs. 7112 in 2003-04

Availability of assured quality raw material

Punjab

Increased production & hence better capacity utilization of plants & machinery.

Policy for Energy Plantation Rajasthan is the 1st and only State so far to have declared a specific policy on Energy Plantation named policy for Promoting Generation of Electricity from Biomass, 2010. The salient features of the policy are: 1. Eligibility-The facility under the policy would be available to power plants who intend to supply 100% power to the Discoms. 2. Permitted Land use a. Government/Common land i. Degraded forest land through JFM committee ii. Government waste land/barren land/saline land through concerned Gram Panchayat iii. Panchayat waste land/barren land/saline land through concerned Gram Panchayat b. Private land i. Leasing of Khatedari land which is barren for upto 30 years without affecting the Khatedary rights of the Khatedar ii. Purchase of Khatedary land in access of ceiling limit as per Ceiling Act, 1973 3. Support from Agricultural department to develop plantation as agricultural activity 4. Identification of land-By the eligible power plant promoter within the command area as per registration with RREC 5. Maximum usage-500 Ha/MW 6. Institutional process a. Institutions involved-RREC/ JFM/Gram Panchayat/District Collector/CEO Zila Parishad/DFO/ District level Empowered Committee (DLEC)/BDO/RERC b. Transaction process i. Approvals from: a) JFM/Gram Panchayat for land use

ii. iii. iv. v.

vi. vii. viii.

b) RREC (Recommendation to District Collector) for consideration by DLEC c) District Collector/DFO for sanction by DLEC d) DLEC for development Tripartite development agreement-Gram Pnachayat/Zila Parishad (JFM for forest land) and Biomass Power Producer The Zila Parishad to undertake development activities by Gram Panchayat/JFM Committee through NREGS/other schemes of Zila Parishad Biomass Power Developer/ Forest/Agricultural departments to provide support to Gram Panchayat/JFM committee for the development work Gram Panchayat/JFM supplies the produce primarily to the biomass producers. Certain percentage of the produce may be kept reserved for bonafide domestic use RREC prescribes the fuel cost for the power plant DLEC determines the price of produce based on the cost so prescribed by RREC Harvesting and logistics management from plantation site to the power plant to be carried out by Power Plant Developer-the cost of the same would be fixed either on normative basis or as per tariff order from RERC

Summary-Policy Review There are certain common features in all the above reviewed policies, which are relevant to development Energy Plantation. These are: 1. Land use-Mainly barren and wasteland. In some cases use of private land is also permitted subject to certain restrictive conditions. 2. Quantum of land that can be used-In case of Rajasthan, which is the only State to have policy for energy plantation, quantum of usage is restricted to 500 Ha/MW. As per yield record of existing farms, this would be able to support upto only 2 MW capacity. 3. Approval process-Almost in all the cases, approval process is quite complex requiring involvement of agencies at different levels starting from village level to the DLEC. This may be desirable from the perspective of managing social issues. However, individual Biomass Power Developer may find the transaction process extremely time and cost consuming hampering the development process. 4. Forest development-In all the cases, this is proposed to be carried out through Gram Panchayat/ Gram Sabhas. Power Plant Developers practically would not have any management role in the development work.

Energy Plantation-Case Studies

Few developers in the States of Tamil Nadu and Madhya Pradesh have developed high yield plantation under different models of development. Few existing Power Developers in the State of Rajasthan have initiated development activities as per the State policy.

Energy Plantation Projects India (EPPI) Energy Plantation Projects India (EPPI) has developed such farms under three separate models, outright purchase of fallow land from farmers, lease under shared revenue and lease under annual payment/acre (both for 15 years lease)8. The company has been able to develop over 350 acres of high yield plantation but have not succeeded in setting up the power plant due to financing difficulties. Initially difficulty was faced in getting the land-high cost was incurred in brokerage fee. However, after demonstration of the project viability, the company has succeeded in getting more parcels of land directly from farmers. The company had also faced difficulty in raising finance but was finally successful in getting the same from Indian Overseas Bank. Difficulties have also been faced due to stealing of plants as farmers do not agree to fencing as a preventive measure. In overall terms, this case has proven usefulness of private development so long State policy did not come in the way of the same. However, financing issues for both plantation and power plant have to be addressed. Some of the research & development institutes mainly in the private sector are working on the varietal development work on commercial scale. They are supporting development of plantation farms in India and abroad. Perusal of the costing data as shown in the following table indicates high viability of plantation options for sustainable operation of the biomass power plants.
Table 10: Cost of energy plantation
9

Variety Particulars Unit Beema Developer/Service provider Yield-Normal (10% moisture)(40% moisture) Yield max.(40% moisture) GCV (10% moisture) Initial land development cost Solar fencing Maintenance cost Overall variable cost
8 9

Vanasree EBTI

Juliflora Transtech

Different high yield EPPI

Growmore

T/acre /yr T/acre /yr Kcal/Kg

25-30 50 4000

NA 100 4250 15 4000

125 190 4000

Rs lac/acre Rs/Meter Rs/acre/yr Rs/T

1 125 20000 500

0.9

18000 290 1100

EPPI website and field study. Interaction with developers

Power yield Land required

KW/acre Acre/MW

5.6 180

11.8 85

1.7 600

15 66

However, issues of financing of power plants based on these models, particularly for larger power plants due to the following reasons: 1. Uncertainty of development rights-during the contracted lease period/expiry of lease period 2. Control over price particularly under shared revenue model 3. Diversion of cultivable land-social tension 4. Demonstrated sustainability of yield over long period Transtech Green Power Private Limited (TGPPL), Rajasthan Introduction This case pertains to an already established power project, which has not been able to sustain operation due to non-availability and higher price of biomass and unremunerative tariff allowed by RERC. On a short term basis, the company has been aggressively pursuing with all relevant authorities for tariff revision so that the project does not become NPA. As a long term strategy, the company has initiated action on investing in energy plantation as per policy of the State Government. Project particulars The project particulars are as shown in the following table.
Table 11: Transtech biomass project particulars

Description Capacity Location Commissioning date Main fuel Auxiliary fuel

Details 12 MW Sanchor Tehsil, Jalore District 28th July, 2010 Juliaflora Mustard residue

Land identification As per policy of the Government, identification of land is to be carried out by the Power Project Developer. Accordingly, TGPPL constituted a project team to carry out extensive survey for identification of land covering both degraded forest land and barren Panchayat land. Details of availability of degraded forest land in the command area of power plant were obtained from the forest department. Assistance was sought from the forest department for clearer demarcation of available land. Informal assistance was got from the Ranger of the forest department based on which following three parcels of forest land as were identified.

Table 12: Forest land identified by TPPL

Village Galifa Khar Hatimtai Jod, Khanpur Range, Bhinmal Jod Junjad

Area in Ha 100 200 200

The process was initiated in Jan, 2011 and completed by March 2011. About 1000 Ha of barren Panchayat land was also identified in the Village Galifa. As per requirement of the policy, TGPPL took steps necessary for getting NOC from the Panchayat. A Gram Sabha meeting was called in the village which was attended by over 100 members of the village. The meeting had been going on smoothly till one member raised objection about selling land to private power plant. Repeated efforts were made to explain the policy of the Government that there was no sale involved, that all development rights would remain with Panchayat, assistance that would be provided to Panchayat for forest development, availability of cooking fuel and other benefits and the obligation of Panchayat was to sign an agreement to sell the produce the Power Plant. However, soon the there was polarisation between members on political and social lines and finally the contra group prevailed and the proposal was rejected. Development work-degraded forest land Formation of Joint Forest Committee (JFM) & Obtaining NOC JFM usually comprises of a forest department employee (Ranger) and self help/social group from local population including women, SC/ST members and other villagers. The JFM is formally approved by DFO based on which the committee can open a Bank account, which is currently the only instrument providing legal back up for them to promote forest development as per policy. At the time of initiation of the project development work, there was no JFM in the project area. TGPPL undertook an awareness development and promotional campaign for formation of JFM and getting all the approval processed done. Necessary support was provided by the Forest department on voluntary basis. NOC is required from joint forest committee (JFM) for land allocation. Presently, there is no guideline based on which such NOC can be provided/rejected by JFM. It was therefore, necessary to spend considerable time in sensitising the members of the JFM about benefit from the plantation. The NOC was obtained from JFM on 31st March 2011 RREC approval Immediately post obtaining the NOC from JFM, application for allocation of land was made to RREC. RREC forwarded their recommendation to District Collector (DC) on 20th April, 2011.

DLEC process DC approved the recommendation and advised DFO to call DLEC meeting for consideration of the proposal for approval. Normally DC, DFO, Revenue officer, Deputy Director Agricultural, District Transportation Officer, RREC are the members of DLEC. The project developer is the invite member of DLEC. The DLEC meeting was held on 2nd July 2011. During the meeting various issues including approval of land allocation and biomass prices as per policy of RREC were discussed and approved. The MOM was approved on 28th Aug 2011 and Power Plant developer was informed accordingly. Initiating the development work The development work has to be undertaken by JFM, which required it to undertake several activities in parallel: Obtaining the Unique code from the Block development Officer (BDO) Approval of Gram Panchayat for undertaking the development activities through NREGS/other schemes Getting local labour (Outside labour not permitted as per policy) and only manual method can be deployed for plantation work

The unique code was obtained on 14th September, 2011, practically 9 months after initiation of the land identification work and with almost day to day follow up work for expediting approval process at various ends. The plantation work could not be initiated planned for the rainy season as now hurdles are being faced in getting labour.

Concluding recommendation
Plantation would provide the most attractive option for sustaining fuel supply to biomass power plants at acceptable price level. There are quite a few commonalities amongst various programs on development of agroforestry in wasteland, which can be synergised for accelerating development of biomass power There are many complex issues, as presented in the following table that need to be addressed through both Central and State level policy and program intervention.

Following conclusions can be drawn from the policy and case study analyses presented above.

Table 13: Policy recommendations

Issue Policy and program administration

Present status There are two central policies and few State policies DLEC to administer Green India & Plantation whereas it is DWDU for water shed development

Hurdles Possible Implementation hurdles as there are different institutional arrangement and it is proposed to use same primary resource base for implementation

Present best practice None identified

Recommendation It is recommended that the same District Level Committee, DLEC is empowered to administer all the three programsWater Shed development, Green India Mission and Energy Plantation and ensure optimum allocation of resources for best results overall. State Energy development Agencies

Nodal Agency

Different in different States for different schemes

Multiple transaction processes

OrissaOREDA RajasthanRREC Orissa & Madhya PradeshDistrict Level Committees are required to identify land DLEC

Land identification

Different methods in different States

Time consumed in identifying Government/Panchayat land Parcel size Fencing & protection cost

State Nodal Agency to prepare a record of land bank based on identification done by DLEC

Land allocation

DLEC

Use of private land Implementation

Permitted in few States JFM/Gram Sabha with budgetary support from NREG/Government schemes and technical inputs from Agricultural department/Power plant developers Exclusive use of local resources

Not permitted in most of the States Land ceiling Act This is proving to be the biggest hurdle due to several reasons like: Non-formation of JFM Impediment in forming the JFM Non interest of Panchayat/lack of motivation/conflict of interest-public vs. private benefits Non availability of labour and nonallowance of mechanised farming Delay in getting unique code as the same is

Tamil Nadu

Water shed developmen t schemeSelection of Project Implementat ion Agencies Tamil NaduContract farming

DLEC-however, process needs to be simplified to reduce the transaction time It should be permitted with livelihood safe guard for sellers Two alternative schemes could be adopted: 4. As provided in the water shed development scheme 5. DLEC/Panchayat to tender for attracting private developers including the Power Plants-terms of tender can be designed for getting maximum benefits to the local community and faster development of waste land for sustainability of the

Financing

Mainly from NREG/Partly from other running schemes like BRGF

Monitoring

Not clear except for the Watershed development by District Planning Committee

provided only as per an approved budget itemdifficult to include project mid-stream. No scheme for private investment in developmental activities Bank finance not available due to allocation and development policy hurdles Finance for R&D for varietal development also not available Remedial action in case of delay by JFM/Panchayat in starting and maintaining development work

None

power plants Allowing contract farming in private land Inclusion of Energy Plantation under agriculture Developing credit enhancement scheme under MNRE patronage Development subsidy for few pilots 6. DLEC to develop and implement a monitoring system

Watershed developmen t project