Biomass Price Analysis Report - Main Report PDF

Biomass Price
Analysis Report
18th March 2011
Biomass Fuel Supply Study in the

State of Rajasthan
Submitted to:
Rajasthan Renewable Energy Corporation Ltd.,
E-166, Yudhisthir Marg, C-Scheme,
Jaipur-302005
Dalkia Energy Services Ltd

Formerly DSCL Energy Services Co Ltd.
Ist Floor, 70, Great Eastern Center,
Nehru Place,
Rajasthan Renewable Energy Corporation Ltd.
TABLE OF CONTENTS
1.
INTRODUCTION............................................................................................................. 6
2.
EXECUTIVE SUMMARY .................................................................................................. 7
3.
APPROACH & METHODOLOGY FOR THE FIELD STUDY .................................................... 8
4.
FINDINGS .................................................................................................................... 11
4.1
Farmer survey .....................................................................................................................................11
4.1.1
Current prices ............................................................................................................................. 11
4.1.2
Price trend .................................................................................................................................. 15
4.2
Trader survey ......................................................................................................................................16
4.2.1
Current prices ............................................................................................................................. 16
4.2.2
Trader margin ............................................................................................................................. 18
4.3
Juliflora price survey ...........................................................................................................................21
4.3.1
Current prices ............................................................................................................................. 21
4.3.2
Price trend-Juliflora .................................................................................................................... 23
4.4
Seasonal variation in prices-power plants ...........................................................................................24
4.5
Competitive prices paid by different users ..........................................................................................28
4.5.1
Power plants ............................................................................................................................... 28
4.5.2
Brick kilns .................................................................................................................................... 32
4.5.3
Briquetting units ......................................................................................................................... 34
4.5.4
Overall comparasion................................................................................................................... 35
4.6
5.
Comparative analysis with coal/lignite ...............................................................................................36
BIOMASS POLICY REVIEW............................................................................................ 39
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6.
RECOMMENDATIONS .................................................................................................. 40
6.1
Price trend ..........................................................................................................................................40
6.2
Projected price ....................................................................................................................................40
6.3
Recommendations on transparent mechanism for biomass price linkage ...........................................41
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LIST OF TABLES
Table 1: District farmer biomass price survey ..................................................................................................... 11
Table 2: Biomass prices-districts having power plants ......................................................................................... 14
Table 3: Farmer average biomass selling price in last five years .......................................................................... 15
Table 4: District trader biomass price survey ....................................................................................................... 16
Table 5: Trade margin ........................................................................................................................................... 18
Table 6: Juliflora costing ....................................................................................................................................... 21
Table 7: Trend analysis of landed cost of Juliflora ................................................................................................ 23
Table 8: Average landed cost at factory gate for various months in FY 2010-11 (Rs/MT) ................................... 24
Table 9: % biomass procured in season ................................................................................................................ 27
Table 10: Trend of landed cost of biomass at factory gate .................................................................................. 28
Table 11: Average fuel procurement cost paid by power plants for last three years .......................................... 30
Table 12: District Brick kiln .................................................................................................................................. 32
Table 13: District briquetting units ....................................................................................................................... 34
Table 14: Biomass comparative prices ................................................................................................................. 35
Table 15: Biomass comparison with coal.............................................................................................................. 36
Table 16: Biomass comparison with lignite .......................................................................................................... 37
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LIST OF FIGURES
Figure 1: Map-operating biomass power plants in Rajasthan ................................................................................ 8
Figure 2: Field survey ............................................................................................................................................ 10
Figure 3: District farmer Biomass price survey ..................................................................................................... 13
Figure 4: Farmer average biomass selling price in last five years ......................................................................... 16
Figure 5: District trader biomass price survey ...................................................................................................... 18
Figure 6: Trade margin.......................................................................................................................................... 20
Figure 7: Trend analysis of landed cost of Juli flora .............................................................................................. 23
Figure 8: Trend of landed cost of biomass at factory gate for various months in FY 2010-11 ............................. 26
Figure 9: Trend of landed cost of biomass at factory gate ................................................................................... 29
Figure 10: Average fuel procurement cost paid by power plants for last three years ......................................... 31
Figure 11: Biomass comparison with coal ............................................................................................................ 36
Figure 12: Biomass comparison with lignite ......................................................................................................... 37
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1. INTRODUCTION
In the order dated 11th Oct., 2010, Rajasthan Electricity Regulatory Commission (RERC) had
nominated Rajasthan Renewable Energy Corporation Ltd., nodal agency for the promotion of
renewable energy in the state, to get the prices and the price trend of main biomass fuel in the state
studied/surveyed, particularly in respect of mustard crop waste and Juliflora biomass. In response to
the mentioned order, Rajasthan Renewable Energy Corporation Limited had invited proposal from
Consultants for carrying out Biomass Fuel Supply Studies in the State. The basic TOR of the study
was as following:
i.
District wise estimates of surplus biomass that is available for energy production on
a long term sustainable basis.
ii.
Biomass price and price trend
iii.
Average calorific value of fuel and loss during storage.
Dalkia Energy Services Ltd. (DESL) was awarded the contract for carrying out the study. During the
inception phase, DESL has also performed a comparative assessment of biomass price with coal E
Auction-price and Lignite Price (which is available from Rajasthan State Mines & Minerals Ltd.) in
order to rationalize the biomass price.
It was also decided that the entire assessment work be carried out in two phases-the 1st one on
Biomass Price Analysis and the 2nd one on availability, average calorific value and losses during
storage.
This present report is being submitted covering the findings from the 1st phase of assessment work
on price and price trend and comparative assessment of biomass prices with E-Auction coal price
and lignite price. The report has been structured as follows:
i.
Executive summary-Covering the snapshot summary of the findings
ii.
Approach and methodology
iii.
Analysis-Detailing the findings
iv.
Recommendations report on prices of biomass for power generation.
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2. EXECUTIVE SUMMARY
DESL has carried out this study by carrying out extensive field survey covering the districts having
biomass power plants.
The 1st part of the report on biomass price scenario, analysis and conclusions on prevailing and
projected prices of biomass for the power plant is prepared and presented herewith.
During the field survey, farmers, traders, operating power plants, forest department, agriculture
department, other Govt. agencies, brick kilns and other industries were visited in different districts
and requisite details were collected. The summarized findings are as following:
The present average prices of biomass of all the power plants have been assessed at Rs.
2077/T average. However, this price seems to be as a result of some market distortion, likely
reason being draught of last year and panic buying by the power plants.
The projected price has been worked out based on competitive scenario analysis and
projected as follows:
o
Based on farmers price and efficient logistics management-Rs 1896/T
Based on coal and lignite (Competitive user end)-Rs 2469/T
Based on Juliflora (Developmental alternative)-Rs 2135/T
It is therefore, recommended that for the year 2011-12 the price of Rs 1896/T may be considered
and for the next year Rs. 2146/T based on the price trend at the farmers end (refer Figure 4) &
traders margin (Table 5) and also benchmarking against Juliflora price of Rs. 2135/T.
In the longer term, Juliflora would be the benchmark against which prices would prevail. The policy
announced by the State on use of Juliflora in the power plant should therefore, be vigorously
implemented to ensure sustainable operation of biomass based power plants in the State.
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3. APPROACH & METHODOLOGY FOR THE FIELD STUDY

In order to assess the price and price trend, DESL has visited Govt. Offices, Agriculture Department,
Forest Department, Farmers, Traders, operating Biomass Power plants, Brick Kilns, & other
industries in different districts in the state of Rajasthan.
Figure 1: Map-operating biomass power plants in Rajasthan1
The methodology for the study includes the field survey and secondary data available from various
sources including Government departments and DESL database.
Note: 15.0 MW Captive Power Plant at Birla Corporation Limited at Chanderia, Chittaurgarh District is registered under Biomass Policy.
However, power is not using biomass as fuel.

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The following information was collected in the field study:
By interacting with farmers in various districts, the information about the crops being
grown and field end prices of biomass was gathered.
The survey team interacted with traders in various districts to revalidate the data on
prices quoted by farmers. Traders also provided the information about export/import of
biomass in the area.
Forest department was visited to know the royalty charges being paid to Forest
Department for uprooting of Juliflora. The central farms under the agriculture
department were also visited to know about auction price of Juliflora.
The operating power plants were visited to gather information on fuel purchase sources,
purchase prices, fuel logistics, proof of purchase at different periods over the year for
the past three years.
The local brick kilns and other industries in various districts were visited to know about
the biomass being used by the industry for power and steam generation. This also
helped in further validating biomass purchase price.
Other Govt. agencies such as Rajasthan State Mines & Minerals Limited were visited to
know the price of lignite and central farms under the Agriculture department were
visited to know the auction price of Juliflora.
The detailed survey data and statistical information have been provided in the attached
annexure (I-IX)
The methodology adopted for field survey is illustrated in the Figure 2.
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Farmer
Field end prices.

Previous year biomass assessment study
Trader
Field end purchase price

Export/import & sale price
Forest Department
Field
Survey
Power Plant
Brick Kiln & other

Industries
Quantum of purchase
Periodicity of purchase
Price at purchase-weighment slips, invoices
Quantum of purchase
Source of purchase & purchase price
Other Govt. Agencies
Juliflora pricing
Price of lignite at source

Coal e-auction price from Coal India magazine-Coal Insights
RREC Biomass policy
Auction price of Juliflora from Central Farms under agriculture
department
Figure 2: Field Survey
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4.
4.1
FINDINGS
FARMER SURVEY
4.1.1 CURRENT PRICES

The biomass prices prevalent during the survey period (Dec-Feb, 2010-2011) show wide variations between
district to district (Table-1). During the survey, most of the farmers indicated that bulk of the residue is sold
during the seasonal period. About 30% of the produce is stored at farmers end for selling at higher prices
during off-season. In determining average price therefore, we have computed on the following basis:
70% sold at lower price
30% sold at higher price
This is also in line with observations from the analysis of purchase data from the power plants-about 72%
purchase by power plants is being done during seasonal period. (Cross reference from power plant analysis
in Table 9).
Table 1: District farmer biomass price survey 2
Sr. No.
Districts
Farmer Biomass Selling Price

/Field Price (Rs/MT)
Mustard Husk
Minimum
Maximum
Average
Kota
1300
1400
1330
Alwar
1400
1800
1520
Jaipur
1900
2100
1960
Baran
800
1100
890
Barmer
800
900
830
Bharatpur
800
1000
860
Source: Farmer Survey -Annexure I
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Sr. No.
Districts

Mustard Husk
Bikaner
1500
1800
1590
Churu
1100
1350
1175
Jhunjhunu
1600
1900
1690
10
Bundi
1100
1300
1160
11
Dausa
1600
1800
1660
12
Dhaulpur
1200
1500
1290
13
Ganganagar
1600
1800
1660
14
Hanumangarh
1600
1800
1660
15
Jaisalmer
900
1000
930
16
Jalore
1800
2000
1860
17
Jhalawar
700
1000
790
18
Jodhpur
900
1000
930
19
Karauli
1000
1400
1120
20
Ajmer
1500
1700
1560
21
Nagaur
1500
1700
1560
22
Pali
1500
1800
1590
23
S. Madhopur
1500
1700
1560
24
Sikar
1500
2000
1650
25
Sirohi
1800
2100
1890
26
Tonk
1300
1400
1330
1315
1552
1386
Average
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Avg. Farmer Biomass Selling Price /Field Price

(Rs/MT)
2500
2000
1500
1000
500
Jaipur
Sirohi
Jalore
Jhunjhunu
Hanumangarh
Ganganagar
Dausa
Sikar
Pali
Bikaner
S.Madhopur
Nagaur
Ajmer
Alwar
Kota
Tonk
Dholpur
Churu
Bundi
Karauli
Jodhpur
Jaisalmer
Baran
Bharatpur
Barmer
Jhalawar
Farmer Biomass Selling Price /Field Price (Rs/MT)

Figure 3: District farmer biomass price survey
From the Farmer Survey, following conclusions are drawn:
The farmer selling price is varying from Rs. 700/MT to Rs. 2100/MT and the average district price is
coming out to be Rs. 1386/MT.
Districts Jaipur, Sirohi, Jalore have high farmer selling price due to high demand in that area. One of
the important reasons is that all these districts have operating biomass based power plants
(Figure1).
Amongst the districts, which have lower prices:

o
Bharatpur because of low local demand (No power plant) and abundant availability.
Barmer and Jhalawar districts have neither power plant (refer Figure 1) nor other
competitive industries like brick kiln (refer Annexure III).
Other districts can be considered representing the average scenario
In case of the districts, which have power plants (operating or about to be commissioned), the
average price is higher by about Rs 300/T as would be seen from Table 2.
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Table 2: Biomass prices-districts having power plants
Sr. No.
Districts

Mustard Husk
Minimum
Maximum
Average
Kota
1300
1400
1330
Jaipur
1900
2100
1960
Ganganagar
1600
1800
1660
Hanumangarh
1600
1800
1660
Jalore
1800
2000
1860
Nagaur
1500
1700
1560
Sirohi
1800
2100
1890
Tonk
1300
1400
1330
Average
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4.1.2 PRICE TREND

DESL has been carrying out biomass fuel assessment study for development of power plants all over the
country including the State of Rajasthan since for more than 5 years. With a view to determine the price
trend, DESL data base available for the districts as under has been used as shown in the following table.
Table 3: Farmer average biomass selling price in last five years3
Sr. No.
FY
Districts
2006-07
Alwar
Bharatpur
Churu
Jhunjhunu
Ganganagar
Hanumangarh
Tonk
Average price at different

ends
2008-09
2010-11
2009-10
Minimum
Maximum
652
1400
1800
750
800
1000
1100
1350
900
1600
1900
1100
1600
1800
1600
1800
1300
1400
1343
1579
800
770
900
650
705
Biomass price increase as a percentage

over last year
2007-08
1059
850
1019
1200
20
20
18
Average
18
Source: DESL Data base- Annexure VI
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1520
860
1175
1690
1660
1660
1330
1414
Rs/MT
1900
2000
1900
1800
1700
1600
1500
1400
1300
1200
1100
1000
900
800
700
600
500
400
300
200
100
0
1650
1414
1200
1020
850
706
2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13

FY
Figure 4: Farmer average biomass selling price in last five years
The biomass prices at farmers end have been increasing almost at a constant rate from FY 2006-07
to FY 2010-11. In the current year also, the price increase has been at 18% compared to previous
year.
From the Figure3, prices at farmers end are projected at Rs. 1650/MT and Rs. 1900/MT for the
years 2011 and 2012 respectively.
4.2
TRADER SURVEY

For each district, we have interviewed number of traders and gathered information on biomass being
traded, export/import of biomass, the minimum and maximum biomass selling price etc.
The
summary of biomass price at traders end is shown in the table below.

Table 4: District trader biomass price survey4
Sr. No.
1
Traders Selling Rate

(Rs/MT)
Districts
Kota
Minimum
Maximum
Average
1600
1700
1630
Source: Trader survey Annexure- II
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Sr. No.
Traders Selling Rate

(Rs/MT)
Districts
Minimum
Maximum
Average
2
3
4
Alwar
Jaipur
Baran
1800
2600
1200
2050
2750
1500
1875
2645
1290
5
6
7
8
9
10
Barmer
Bharatpur
Bikaner
Churu
Jhunjhunu
Bundi
1300
1800
1700
1900
1600
1500
2100
2000
2100
1750
1360
1890
1850
1960
1645
11
12
13
14
15
16
Dausa
Dhaulpur
Ganganagar
Hanumangarh
Jaisalmer
Jalore
1800
1900
2000
2000
2100
2000
2100
2300
2300
2300
1860
1960
2090
2090
2160
17
18
19
20
21
22
Jhalawar
Jodhpur
Karauli
Ajmer
Nagaur
Pali
900
1200
1500
1800
1900
1900
1200
1400
2000
2000
2100
2150
990
1260
1650
1860
1960
1975
23
24
25
26
S. Madhopur
Sikar
Sirohi
Tonk
Average
1800
1900
2100
1800
1754
1900
2100
2200
2000
1979
1830
1960
2130
1860
1823
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Average Trader Sale Price (Rs/MT)

3000
2500
2000
1500
1000
500
Average Trader Sale Price (Rs/MT)
Figure 5: District trader biomass price survey
On average basis, trader is selling the biomass between Rs. 1754/MT to Rs. 1979/MT and the overall
average selling price at trader end is around Rs. 1823/MT. The detailed list of traders with biomasses
being traded, biomass prices who have been interviewed in various districts is attached as Annexure II.
4.2.2 TRADER MARGIN
Traders margin has also been analyzed as shown in the table below.
Table 5: Trade margin5
Sr.
No.
Districts
Trade
Margin(Rs/MT)
Kota
300
Alwar
355
Jaipur
685
Source: District Farmer Price Survey & District Trader Price Survey- Annexure I & Annexure II
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Jaipur
Jalore
Sirohi
Hanumangarh
Ganganagar
Pali
Sikar
Nagaur
Dholpur
Jhunjhunu
Bikaner
Alwar
Tonk
Ajmer
Dausa
Churu
S.Madhopur
Karauli
Bundi
Kota
Bharatpur
Baran
Jodhpur
Jhalawar
Jaisalmer
Barmer
Sr.
No.
Districts
Trade
Margin(Rs/MT)
Baran
Barmer
Bharatpur
500
Bikaner
300
Churu
675
Jhunjhunu
270
10
Bundi
485
11
Dausa
200
12
Dhaulpur
670
13
Ganganagar
430
14
Hanumangarh
430
15
Jaisalmer
16
Jalore
300
17
Jhalawar
200
18
Jodhpur
330
19
Karauli
530
20
Ajmer
300
21
Nagaur
400
22
Pali
385
23
S. Madhopur
270
24
Sikar
310
25
Sirohi
240
26
Tonk
530
Average
346
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Trade Margin(Rs/MT)
800
700
600
500
400
300
200
100
0
Trade Margin(Rs/MT)
Figure 6: Trade margin
Traders margin also includes the transportation, loading and unloading of the biomass.
Average traders margin including handling and transportation cost about Rs 346/T.
Considering the average transportation cost of about Rs 100-150/T, as has been seen from the cost
data from power plants, traders margin is about Rs 200/T which includes both cost of storage and
handling losses.
The trade profit has accordingly been estimated at about Rs 100/T.
Thus, it can be concluded that price rise is mostly on account of increase at the farmers end and
trade including import and export do not have significant impact on the prices.
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4.3
JULIFLORA PRICE SURVEY

In the state of Rajasthan, Juliflora is available to the power plant from three different sources namely
Auction by central farms under the department of Agriculture
By State Forest department
Directly from traders and farmers
The cost of procurement from these different sources for FY 2010-11 has been computed as shown in the
following table. Detail information on auction price by Central Farms under Agriculture Department,
Royalty Charges being paid to Forest Department and purchase price of Juliflora from farmers/traders has
been provided at Annexure-VIII.
Table 6: Juliflora costing6
Auction by Central
Farms under
Agriculture
Department
State Forest Department
Direct from
Traders/ Farmers
Rs / MT
Rs / MT
Rs/ MT
1250
730
1900
Cutting cost through contractor
included in above
300
included in above
Transportation cost from forest

(average transportation distance
of around 75 KM is considered)
600
600
included in above
Loading & Unloading Cost
140
140
included in above
Work Description
State Average Forest Deptt.

Royalty Charges/ Basic Cost
Source: Agriculture department, Forest department, power plant- Annexure VIII.
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Auction by Central
Farms under
Agriculture
Department
State Forest Department
Direct from
Traders/ Farmers
Rs / MT
Rs / MT
Rs/ MT
Chipping Cost in the Plant
225
225
225
Sub-Total
2215
1995
2125
Average
Moisture
Loss
considered for Price Calculation
(Moisture Level in landed
Juliflora is 15 -- 20 % and
inherent moisture level is around
8%)
10%
10%
10%
Total cost of chipped Juliflora at

plant considering moisture loss
2377
2135
2338
Work Description
It is clear from the table above that:
The cost of Juliflora varies, lowest at Rs 2135/T when purchased from State forest department and
highest at Rs 2377 when purchased from central farm under agricultural department
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4.3.2 PRICE TREND-JULIFLORA

DESL has analyzed the price trend of Juliflora for last 3 years. The percentage increase in landed cost over
previous year in FY2009-10 and FY2010-11 is around 10.56% and 19.45% respectively. This trend is also in
line with average increase of 18% in prices at farmers end observed for other biomasses.
Table 7: Trend analysis of landed cost of Juliflora7
Year
Landed Cost of Juliflora at factory Gate

from Central Farms by Agriculture
% Increase in Landed Cost over

Previous Year (%)
2008-09
1800
2009-10
1990
10.56%
2010-11
2377
19.45%
Rs./MT
Trend of Landed Cost of Juliflora

2500
2400
2300
2200
2100
2000
1900
1800
1700
1600
1500
2377
1990
1800
2008-09
2009-10
2010-11
Figure 7: Trend analysis of landed cost of Juliflora
Source: Central Farms under Agriculture Department- Annexure VIII
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4.4
SEASONAL VARIATION IN PRICES-POWER PLANTS
The seasonal price variation has been determined by collecting purchase data from the power plants as shown in the following Table. The detailed working
of monthly average landed cost is provided in Annexure IV.
Table 8: Average landed cost at factory gate for various months in FY 2010-11 (Rs/MT) 8
Average Landed Cost at Factory Gate for various Months in FY 2010-11 (Rs./MT)
S M Env. Tech.
Pvt. Ltd.
Surya
Chambal
Power Ltd.
Kalpataru
Power
Transmission
Ltd. (Uniara)
Kalpataru Power
Transmission Ltd.
(Sri Ganganagar)
Sambhav
Energy Ltd.
Sathyam
Power
Pvt. Ltd.
Transtech
Green Power
Pvt. Ltd.
Amrit Env.
Tech. Pvt. Ltd.
Apr
1348
1505
1498
2389
2462
1851
2086
2415
May
1346
1591
1790
2187
2336
2148
2361
2416
Jun
1350
1968
2024
2326
2375
2290
1957
1869
2488
2321
2405
1843
2497
2311
2462
1779
2207
2334
3050
1636
2316
2634
2881
Months in
FY 2010-11
Jul
Aug
1599
Sep
Oct
1151
1962
1889
Source: Power Plant Survey - Annexure IV
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Average Landed Cost at Factory Gate for various Months in FY 2010-11 (Rs./MT)
Surya
Chambal
Power Ltd.
Kalpataru
Power
Transmission
Ltd. (Uniara)
Kalpataru Power
Transmission Ltd.
(Sri Ganganagar)
Sambhav
Energy Ltd.
Nov
2226
2121
1133
Dec
1852
1934
1033
Jan
1800
Feb
2263
Mar
2473
Months in
FY 2010-11
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Pvt. Ltd.

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Sathyam
Power
Pvt. Ltd.
Transtech
Green Power
Pvt. Ltd.
Amrit Env.
Tech. Pvt. Ltd.
2351
2773
2175
2396
2690
2706
1300
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2860
3500
3000
2500
Rs./MT
2000
1500
1000
500
0
Apr
May
Jun
Jul
S M Env. Tech. Pvt. Ltd.
Kalpataru Power Transmission Ltd. (Uniara)
Sambhav Energy Ltd.
Transtech Green Power Pvt. Ltd.
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Surya Chamcal Power Ltd.
Kalpataru Power Transmission Ltd. (Sri Ganganagar)
Sathyam Power Pvt. Ltd.
Amrit Env. Tech. Pvt. Ltd.
Figure 8: Trend of landed cost of biomass at factory gate for various months in FY 2010-11
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Table 9: % biomass procured in season
Power Plant Name

S M Env. Tech. Pvt. Ltd., Dist. Baran
Surya Chambal Power Ltd., Dist. Kota
Kalpataru Power Transmission Ltd. , District Tonk
Kalpataru Power Transmission Ltd. , District Sri
Ganganagar
Amrit Env. Tech. Pvt. Ltd., District Jaipur
Overall Average
% Biomass Procured in
Season
68.46%
86.61%
97.40%
83.60%
26.87%
72.59%
From the pattern, it would be seen that the price behavior does not show any secular trend. The key
observations are as follows:
The prices are lowest in the period April to June (harvesting period for mustard) for all the plants
depending upon mustard residue as main fuel.
However, for Kalpataru Power Transmission Ltd., District Sri Ganganagar, the price behaviors is
different as this plant also uses cotton sticks in a significant quantity and harvesting time for the
same is November and December.
The % of biomass procured during season is 72%.
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4.5
COMPETITIVE PRICES PAID BY DIFFERENT USERS
The major competitive users of biomass are power plants, brick kilns and briquetting units and other
industries. The price paid by different users is given in the sections below.
4.5.1 POWER PLANTS
The working of weighted average landed cost of fuel at factory gate for FY 2008-09, FY 2009-10 & FY
2010-11 for various power plants is provided in Annexure IV.
Table 10: Trend of landed cost of biomass at factory gate9
Trend of landed Cost of Biomass at Factory Gate of Various Power Plants

Weighted
Average Fuel
Procurement
Cost at Factory
Gate in FY 201011 (Rs./MT)
Sr. No.
Power Plant
S.M Environmental Technologies Pvt.

Ltd.
500
1123
1426
Surya Chambal Power Ltd.
1255
1406
1902
Kalpataru Power Transmission Ltd.

(Uniara)
1159
1194
1850
Kalpataru Power Transmission Ltd.

(Ganganagar)
1283
1346
2132
Sambhav Energy Ltd.
2282
2358
Sathyam Power Pvt. Ltd.
1683
1944
Transtech Green Power Pvt. Ltd.
1927
2373
Amrit Environmental Technologies

Pvt. Ltd.
2032
2169
2629
1246
1641
2077
Overall Plant Average
Weighted Average
Fuel Procurement
Cost at Factory Gate
in FY 2009-10
(Rs./MT)
Weighted Average Fuel

Procurement Cost at
Factory Gate in FY 200809 (Rs./MT)
Source: Data collected from various power plants-Annexure IV
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3000
2500
Rs./MT
2000
1500
2077
2077
2077
2077
2077
2077
2077
2077
1641
1641
1641
1641
1641
1641
1641
1641
1246
1246
1246
1246
1246
1246
1246
1246
1000
500
0
S.M
Surya Chambal Kalpataru Power Kalpataru Power Sambhav Energy Sathyam Power Transtech Green
Amrit
Envirnomental
Power Ltd.
Transmission Ltd. Transmission Ltd.
Ltd.
Pvt. Ltd.
Power Pvt. Ltd. Environmental
Technologies Pvt.
(Uniara)
(Ganganagar)
Technologies Pvt.
Ltd.
Ltd.
Weighted Average Fuel Procurement Cost at Factory Gate in FY 2008-09 (Rs./MT)
Average Fuel Procurement Cost for all power plants in FY 2008-09 (Rs./MT)
Figure 9: Trend of landed cost of biomass at factory gate
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From the above it is clear that:
The average cost at factory gate has increased from Rs1246/MT in 2008-09 to Rs.2077/MT in
2010-11 showing an unusually high increase of over 60% in three years.
The weighted average cost of fuel at factory gate for FY2010-11 is the highest for Amrit
Environmental Technologies Pvt. Ltd., District Jaipur as the demand for the biomass is very
high in district Jaipur because of high demand from many industries including Brick kilns &
briquetting units (refer Section 4.5.2 Brick Kiln & 4.5.3 Briquetting Units).
The lowest weighted average cost of fuel at factory gate for FY2010-11 is for S.M
Environmental Technologies Pvt. Ltd., District Baran as the plant has not yet started full
operation due to technical problems.
Further, general demand in the district is also low
(very few brick kilns).

Table 11: Average fuel procurement cost paid by power plants for last three years
Average Fuel
Procurement Cost for
all power plants in FY
2008-09 (Rs./MT)
Average Fuel Procurement

Cost for all power plants in FY
2009-10 (Rs./MT)
Average Fuel Procurement Cost for all

power plants in FY 2010-11 (Rs./MT)
1246
1641
2077
31.74%
26.53%
% Change with
respect to Previous
Year
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3050
2550
2077
1641
Average Fuel
Procurement Cost
for all power
plants in FY 201011 (Rs./MT)
1246
Average Fuel
Procurement Cost
for all power
3300
3200
3100
3000
2900
2800
2700
2600
2500
2400
2300
2200
2100
2000
1900
1800
1700
1600
1500
1400
1300
1200
1100
1000
900
800
700
600
500
400
300
200
100
0
Average Fuel
Procurement Cost
for all power
Rs./MT
Trend Line of Average Landed Cost at factory Gate
Figure 10: Average fuel procurement cost paid by power plants for last three years
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In case the trend remains the same, the prices can rise to Rs. 2550/MT in the current year
and Rs 3050/MT next year.
However, with introduction of Juliflora policy, the price ceiling is likely get controlled against
the benchmark cost of the same as delivered to the factory gate.
4.5.2 BRICK KILNS
DESL team has visited the brick kilns in various districts to understand the biomass consumption by
brick kilns, purchase price of biomass etc. The summary of biomass purchase price at brick kilns end
is summarized in the table below. The detail list of brick kiln visited is attached as an annexure III.
Table 12: District Brick kiln 10
Sr. No.
Brick Kilns (Rs/MT)
Districts
Mustard Husk
10
Minimum
Maximum
Kota
2000
3000
Alwar
2350
3200
Jaipur
2250
3000
Bharatpur
1800
2500
Bikaner
2200
2300
Churu
1800
2300
Jhunjhunu
2200
2400
Source: District Brick Kiln Price Survey- Annexure III
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Sr. No.
Districts
Brick Kilns (Rs/MT)

Mustard Husk
Bundi
1500
2000
Dausa
2100
2600
10
Dhaulpur
1800
2200
11
Ganganagar
2100
2200
12
Hanumangarh
2100
2200
13
Karauli
1800
2000
14
Ajmer
2000
2100
15
Nagaur
2000
2100
16
Pali
2100
2300
17
S. Madhopur
1500
2100
18
Sikar
2350
2600
Average
1997
2394
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4.5.3 BRIQUETTING UNITS

DESL team has visited the briquetting units in various districts to understand the briquetting sale
price and purchase price of biomass.
From the table below, it is clear that for biomass briquetting units, biomass purchase rate of biomass
is varying between Rs. 1400/MT to Rs. 2300/MT and sale price of briquettes is varying between Rs.
2530/MT to Rs. 3565/MT.
Table 13: District briquetting units11
Sr. No.
Briquetting Units (Rs/MT)
Districts
Purchase
11
Sale
Minimum
Maximum
Minimum
Maximum
Kota
1400
1800
2530
2990
Alwar
1800
2000
2990
3220
Jaipur
2000
2300
3220
3565
Bikaner
1800
2000
2990
3220
Bundi
1600
1800
2760
2990
Ganganagar
2000
2300
3220
3565
Hanumangarh
2000
2300
3220
3565
Tonk
1700
1900
2875
3105
Average price at different

ends
1788
2050
2976
3278
Source: District Briquetting Unit Price Survey- Annexure III
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4.5.4 OVERALL COMPARASION

Table 14: Biomass comparative prices
Comparative-Biomass prices/landed cost-Rs/Mt
Farmers sale price

Traders sale price
Juliflora landed at factory gate
Power plant landed cost
Brick kilns- landed cost
Briquette plant- landed cost
Mark up from farmer to Power
Plant
2008-2009
1020
2009-2010
1200
1800
1246
1990
1341
226
141
2010-2011
1414
1823
2377
2077
2344
1911
Power Plant
over others
663
254
-300
0
-267
166
663
Some of the critical observations are:
The marginal cost at factory gate over farmers price has shown a sharp increase of Rs
663/MT against earlier high of Rs 226/MT and trade margin over farmers price of about Rs
400/MT. This is indicative of some inefficiency and may be distressed purchase by power
plants.
By controlled purchase and sound management, it should be possible to contain this margin
up to Rs 400/T.
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4.6
COMPARATIVE ANALYSIS WITH COAL/LIGNITE
From the analysis and findings so far, it has been established that the brick kilns are providing the
maximum competition. The alternate fuel for such kilns can be coal or lignite. Therefore,
comparative analysis has been carried out against the same for determining the likely relationship of
biomass prices with coal/lignite.
Table 15: Biomass comparison with coal12
2009
2010
Rs/MT
3511
3865
Rs/Mcal
Year
Average price
Coal
Average
calorific value
Kcal/Kg
4095
4095
1.00
0.90
0.80
0.70
0.60
0.50
0.40
0.30
0.20
0.10
0.00
Cost/Heat
Average price
Rs/Mcal
0.86
0.94
Rs/MT
1641
2077
Biomass
Average
calorific value
Kcal/Kg
3297
3297
Heat
value
Rs/Mcal
0.50
0.63
Biomass
price (% of
coal price)
58%
67%
0.94
0.86
67%
0.63
58%
0.50
2009
2010
FY
Coal
Biomass
Biomass price (% of coal price)
Figure 11: Biomass comparison with coal
Similar analysis against the lignite price was also carried out.
12
Source: Coal Insights by Coal India Ltd.-Annexure VII
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The competitive analysis of biomass with lignite is given below:

Table 16: Biomass comparison with Lignite13
Lignite
Biomass
Average
price
Average calorific
value
Heat value
Average
price
Average
calorific value
Heat
value
Rs/MT
Kcal/Kg
Rs/Mcal
Rs/MT
Kcal/Kg
Rs/Mcal
Biomass price (%
of lignite price)
2008
2456
3000
0.82
1246
3297
0.38
46%
2009
2539
3000
0.85
1641
3297
0.50
59%
2010
2761
3000
0.92
2077
3297
0.63
68%
Rs/Mcal
Year
1.30
1.20
1.10
1.00
0.90
0.80
0.70
0.60
0.50
0.40
0.30
0.20
0.10
0.00
0.92
0.82
46%
0.38
2008
0.85
68%
0.63
59%
0.50
2009
2010
Lignite
FY
Biomass price (% of lignite price)
Poly. (Biomass price (% of lignite price))
Biomass
Poly. (Lignite)
Figure 12: Biomass comparison with lignite
The price linkage on heat value has increased from about 50% to over 60%. In the current year, this
percentage has increased to about 67%. As already indicated, in the current year the rise in prices of
13
Source: Rajasthan State Mines and Minerals Ltd.-Annexure-VII
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biomass has been abnormally high. This is likely to get contained by more efficient purchases and
availability of Juliflora alternative.
On that basis, the prices of biomass is projected at Rs 2469/T.
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5. BIOMASS POLICY REVIEW

Rajasthan is one of the few states in India to have a well defined policy for promoting the generation
of electricity from biomass. The salient features of the biomass policy issued by GoR in February
2010 and RERCs order which helps in achieving sustainability of biomass based power plants are
being summarized below.
The policy has defined the catchment area depending upon the generation capacity of the
power plant in order to ensure biomass availability to the power plant and stabilization of
the prices over a period of time.
In order to facilitate faster project development and execution, mechanism of single

window clearance has been provided.
To maintain the PLF during the lean period, the policy is having the provision for 15%
utilization of fossil fuel by biomass based power plants during the lean period in some years
as per RERC order dated 17th August, 2009.
The biomass policy is being upgraded on regular basis depending upon feedback/suggestions
of the operating biomass based power plants.
The policy is having the provision for long term PPA which is required to achieve financial
attractiveness of the project and resulting in early financial closure of the project.
From long term reliability and promoting the low water consumption technology, policy is
having the preferential tariff provision for air cooled condenser based power plants as per
RERC orders dated 9th March 2007, 17th August, 2009 and 31st March, 2010.
In order to achieve long term fuel availability and to achieve biomass price stabilization, the
policy is also promoting the development of energy plantation (Juliflora) on Govt.
waste/barren/saline lands, Panchayat waste/barren/saline lands, degraded forest land and
private Khatidari land. The development of Juliflora plantation will not only spur the rural
economy by creating employment opportunities but also will have governing effect on
biomass prices in the long term.
Current lower price of Juliflora is Rs 2135/T when procured directly from the forest. Taking
advantage of this policy, the power plant should be able to get fuel at the same or lower
price.
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Further, the price of biomass produced from Juliflora/other plantation shall be determined
on the basis of fuel cost prescribed by the RERC.
6. RECOMMENDATIONS
6.1
PRICE TREND
The current prices of biomass at the factory gate for the different power plants have been
assessed at:
Lowest average of Rs 1850/T (Excluding S M Baran ignored as the plant is not operating
due to technical reason) for Kalpataru Power Transmission at Uniara
Highest of Rs 2629/T for Amrit Environmental at Kotputli
Average of Rs 2077/T for all the plants put together
There has been sharp increase in the margin from framers end to Power plant end in the
current year from about Rs 200/T to over Rs 600/T. This should be containable to the
maximum mark up prevailing at the trade level, which is about Rs 400/T.
6.2
PROJECTED PRICE
The following price projection for the Year 2011-2012 has been made considering the
followings, which have direct or indirect impact on the biomass for competitive use:
Based on farmers price and trade margin (Competitive at source end)
Projected farmer end price for FY 2011-12-Rs 1650/T (Fig-4)
Projected farmer end price for FY 2012-13-Rs 1900/T (Fig-4)
Trade margin-Rs 346/T (Table-5)
Less trade profit-Rs 100/T
Based on the above factors, projected price for FY 2011-12

=Projected farmer end price for FY 2011-12 + Trade Margin Trade Profit
= 1650+ 346-100 =Rs. 1896/MT
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Based on the above factors, projected price for FY 2012-13

=Projected farmer end price for FY 2012-13 + Trade Margin Trade Profit
= 1900+ 346-100 =Rs. 2146/MT
DESL recommend that power plants should procure maximum amount of biomass directly
from the farmers in order to reduce the average landed cost of fuel at the factory gate of
power plant.
Based on coal and lignite (Competitive user end)

Based on biomass comparative study with lignite, the projected price of biomass
is Rs 2469/T (ref. Figure 12).
Based on Juliflora (Developmental perspective)

Based on biomass Juliflora plantation, the projected biomass price is Rs. 2135/T
(ref. Table 6).
6.3
RECOMMENDATIONS ON TRANSPARENT MECHANISM FOR BIOMASS PRICE

LINKAGE
Based on the current survey and analysis, it has been established that there would be about 17% and
15% annual increase in the prices at the farmers end in FY 2011-12 and FY 2012-13 respectively.
However, as more and more Juliflora gets developed, the same would provide containment cushion
and it is likely that the prices would stabilize after 2-3 years.
It would be desirable to carry out a similar exercise in the next two years by which time sufficient
amount of Juliflora is likely to be available for the power plants.
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Biomass Price

Biomass Fuel Supply Study in the

Dalkia Energy Services Ltd

Rajasthan Renewable Energy Corporation Ltd.

EXECUTIVE SUMMARY .................................................................................................. 7

APPROACH & METHODOLOGY FOR THE FIELD STUDY .................................................... 8

Farmer survey .....................................................................................................................................11

Current prices ............................................................................................................................. 11

Price trend .................................................................................................................................. 15

Trader survey ......................................................................................................................................16

Current prices ............................................................................................................................. 16

Trader margin ............................................................................................................................. 18

Juliflora price survey ...........................................................................................................................21

Current prices ............................................................................................................................. 21

Price trend-Juliflora .................................................................................................................... 23

Seasonal variation in prices-power plants ...........................................................................................24

Competitive prices paid by different users ..........................................................................................28

Power plants ............................................................................................................................... 28

Brick kilns .................................................................................................................................... 32

Briquetting units ......................................................................................................................... 34

Comparative analysis with coal/lignite ...............................................................................................36

BIOMASS POLICY REVIEW............................................................................................ 39

Rajasthan Renewable Energy Corporation Ltd.

Rajasthan Renewable Energy Corporation Ltd.

Price trend ..........................................................................................................................................40

Projected price ....................................................................................................................................40

Recommendations on transparent mechanism for biomass price linkage ...........................................41

Rajasthan Renewable Energy Corporation Ltd.

Rajasthan Renewable Energy Corporation Ltd.

Rajasthan Renewable Energy Corporation Ltd.

Rajasthan Renewable Energy Corporation Ltd.

Rajasthan Renewable Energy Corporation Ltd.

Rajasthan Renewable Energy Corporation Ltd.

Biomass price and price trend

Average calorific value of fuel and loss during storage.

Executive summary-Covering the snapshot summary of the findings

Approach and methodology

Analysis-Detailing the findings

Recommendations report on prices of biomass for power generation.

Rajasthan Renewable Energy Corporation Ltd.

Rajasthan Renewable Energy Corporation Ltd.

Based on farmers price and efficient logistics management-Rs 1896/T

Based on coal and lignite (Competitive user end)-Rs 2469/T

Based on Juliflora (Developmental alternative)-Rs 2135/T

Rajasthan Renewable Energy Corporation Ltd.

Rajasthan Renewable Energy Corporation Ltd.

3. APPROACH & METHODOLOGY FOR THE FIELD STUDY

Figure 1: Map-operating biomass power plants in Rajasthan1

However, power is not using biomass as fuel.

Rajasthan Renewable Energy Corporation Ltd.

Rajasthan Renewable Energy Corporation Ltd.

The following information was collected in the field study:

Rajasthan Renewable Energy Corporation Ltd.

Rajasthan Renewable Energy Corporation Ltd.

Field end prices.

Field end purchase price

Brick Kiln & other

Other Govt. Agencies

Price of lignite at source

Figure 2: Field Survey

Rajasthan Renewable Energy Corporation Ltd.

Rajasthan Renewable Energy Corporation Ltd.

4.1.1 CURRENT PRICES