DESIGN AND DEVELOPMENT OF A BUSINESS MODEL FOR BIOMASS POWER PLANT USING

DATA ENVELOPMENT ANALYSIS (DEA)

P. Raman, The Energy and Resources Institute (TERI), New Delhi, India
T. Nambirajan, Department of Management Studies, Pondicherry University, Puducherry, India

ABSTRACT

With rapid development of technology and life style, the entire world faces challenge to meet the energy
demand. Increase in fossil fuel price adds to the problem. The present work focuses on alternative
solution to tackle the challenging problems of electrical energy production to meet the total demand. The
existing electric power scenario of India is discussed in detail. Biomass energy contribution to produce
electricity is discussed in detail. India having agricultural activity as a major component, agro residues
(like rice husk, ground nut shell, coconut shell, mustard stalk, cotton stalk etc.) are considered to replace
the fossil fuel used for power generation. State wise electric power demand-supply gap is discussed in
detail. Present work focuses on detailed economics of various options of power generation and the need
for biomass power generation plants. Fossil fuels are available in one place and can be easily collected
and transported, whereas agro residues are available in wide geographical region. That has to be
collected and processed to make them into usable form. A business model is proposed in the paper for
sustainable establishment of biomass power plant using DEA. The purpose of designing the business
model is to manage the demand – supply of electric power.

Key words: Data Envelopment Analysis (DEA), Efficient operation, Value added efficiency, Relative
efficiency, Efficiency frontier rand Biomass power

1. INTRODUCTION

The entire world is undergoing a transformation change in technology, product and life style. These
changes demand a lot of energy input, which is beyond affordability of an individual, Nation and
Worldwide. With the increase in energy demand, the fossil fuel become highly expensive and its
availability are also limited. At this situation, there is a need to address the problem and work on finding
solutions to it. Electricity is one of the secondary energy sources, which is primarily produced using fossil
fuel like coal, natural gas, diesel etc. In this study, the problem and possible solutions are discussed with
reference to Indian context. According to the Ministry of Power, the total installed capacity of the power
plants in India is 1, 52,148 MW. Under this circumstance, there is a demand-supply gap of 100000MW.
According to Ministry of Power, there is a plan to bridge this gap by 2012. Almost all the states in India
have power shortage problem up to 18%. Ministry of Power, Government of India is taking several
measures to bridge the gap. Ministry of New and Renewable Energy (MNRE) achieved 14,914 MW of
power generated using renewable energy power plants. However, the available total renewable power
potential is 84,776 MW. Present status of power generation system and biomass power plants are
discussed in the following sections. Economics of various sources of power production is compared with
“Data Envelope Analysis” (DEA). A businessl model is developed for frontier analysis of various types of
plants used for production and distribution of Electricity.

2. PRESENT SCENARIO OF ELECTRIC POWER DEMAND AND SUPPLY IN INDIA

Power distribution network in India comprises of four regions, namely:

i. Northern region consisting of 9 states and Union Territories with total power supply of 196147
million units (MU).
ii. Western region consisting of 7 states and 2 Union Territories, with a total power supply of 208228
million units
iii. Southern region consisting of 6 states and 2 Union Territories with a total power supply of 181820
million units

iv. North Eastern region consisting of 7 states and Union Territories with a total power supply of 7713
million units.

REVIEW OF BUSINESS RESEARCH, Volume 10, Number 2, 2010 133

Details of demand - supply situation during 2007-08 is shown in Table 1. All Regions are having power
shortage (CEA 2009). Majority of regions are having a power shortage of more than 10 %. Some of the
states have shortage of power from 10,000 to 20,000 million units. It may be noted that the shortage of
power is directly propositional to the increase in demand due to development and industrialization of the
state.

Table 1 Power supply position (2007/08)

Region Requirement (MU) Availability (MU) Deficit (MU) Deficit (%)
Northern Region 219797 196147 23650 10.8
Western Region 247173 208228 38945 15.8
Southern Region 187743 181820 5923 3.2
Eastern Region 75833 72099 3734 4.9
North Eastern Region 8799 7713 1086 12.3
All India 739345 666007 73338 9.9
Source: http://www.cea.nic.in/power_sec_reports/executive_summary/2008_04/25-26.pdf, last accessed on 28
November 2008

3. NEED FOR THE PRESENT RESEARCH

As said earlier, the power requirement is increasing with the increase in development activities of the
country. To maintain the growth rate of GDP, it becomes essential to provide power to the industrial and
commercial sector along with their growing need. The demand-supply gap is shown in Table 2. The
power supply has doubled. However the shortage level is always remaining around 12%. This indicates
that there is a need to identify alternative power generation source to meet the growing demand. The
existing combination of resources and their contribution for power generation is given in Table 3. It may
be noted that majority of the power is (about 54.2%) being produced from coal and 27.5% is produced by
hydro. There is a possibility of changing this ratio by focusing on electric power generation using biomass.
The electric power generation using biomass is a future source of energy.

Table 2 Power supply position, since 1999

Power Supply Position (Peak demand and Supply) in India
from 1996 to 2009 (In MW)
Year Peak demand Supply Shortage Shortage in %
1998-99 67905 58445 9460 13.9%
1999-00 72669 63691 8978 12.4%
2000-01 78872 65628 9244 12.3%
2001-02 78441 69189 9252 11.8%
2002-03 81492 71547 9945 12.2%
2003-04 84574 75066 9508 11.2%
2004-05 87906 77652 10254 11.7%
2005-06 93255 81792 11463 12.3%
2006-07 100715 86818 13897 13.8%
2007-08 108866 90793 18073 16.6%
2008-09 109809 96785 13024 11.9%
Source: Ministry of Power, Govt. of India (10591)

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Table 3 Contribution of different fuel for installed capacity
Sl.No Fuel used Percentage of total power produced
1 Coal 54.2
2 Hydro 27.5
3 Gas 8.8
4 Nuclear 3.1
5 Lignite 2.9
6 Oil 1.3
7 Diesel 0.9
8 Naphtha 0.4
9 Others 0.9
Source: http://www.powermin.nic.in/JSP_SERVLETS/internal.jsp

4. BIOMASS POWER PLANT AS A SUITABLE OPTION

Reduction in fossil fuel consumption and looking for alternative solution becomes essential based on
three major reasons which are given below:

i. Scarcity /availability of fossil fuel

ii. Increasing cost of fossil fuel increases the cost of power generation and affects the industrial
sector as well as domestic conveniences and affordability.
iii. Environmental concerns like Green House Gas (GHG) emission and its contribution to global
warming. Because of these reasons, lot of research being done for the development of various
“New Products” namely Renewable Energy Power Plants (RE Power Plants). About six types of
Renewable Energy based power plants are compared with conventional fossil fuel based power
plants in Table 4. It may be noted that power generation cost using biomass power plant and
wind turbines are closer to the power generation cost using coal fired thermal power plant.

Biomass power plants are considered as a more suitable option for places, where agricultural residues
are available. Wind turbines are site specific to those locations where wind speed is sufficient enough to
generate reasonable electric power. Biomass power plant can be operated at any time to meet the power
requirement but wind mills operate only during the season when sufficient wind flows with reasonable
speed. Thus the capacity utilization of a wind mill will be much lower than the biomass power plants of
equal capacity. To promote RE power plants, power purchase policy exists in the country as per the
Electrical Act 1983. The different power purchase rate provided by Tamil Nadu Government is given in
Figure 1. In Figure 1, Solar PV represents the solar Photo voltaic.

Table 4 Different cost factors of conventional and RE power plants

Sl.no Product name Average size Capacity Capital Production Cost
of the plant Utility investment per unit
kW Factor $/kW $/kWh
1. Biomass Power Plant 10 to 500 .78 800 .07
2. Wind Mill 10 to 2000 .30 1500 .05
3. Photo voltaic Plant 1 to 100 .18 7000 .25
4. Solar Thermal 50 to 300 000 .18 3000 .14
5. Fuel Cell 10 to 200 .45 3000 .13
6. Micro Turbine 30 to 300 .80 1000 .12
7. Fossil Fuel Power Plant* 500 000 to .80 1000 .05
300 000
8. Diesel Power Plant* 50 to 5000 .80 700 .27
Note: kW - Kilo Watt; kWh- kilo Watt hour; * Conventional power plant

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 Figure 1 Purchasing cost of electricity produced by various resources

5. SUPPLY CHAIN OF BIOMASS POWER PLANTS

Biomass fuel is geographically scattered. It is available only on a particular season depending upon the
harvesting time of the crop. Agricultural residues available in India are given in Table 5. The biomass
available is initially harvested, and then transported to fuel processing factories, which is situated near
biomass power plants. The processed biomass is stored in warehouse and supplied to the biomass
power plants at the right quality, at the right quantity and at the right time (David Simichi-Levi, 2008).
Supply chain components of biomass power plant are shown in Figure 2.

Figure 2 Supply chain components of “Biomass Power Plant”

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6. A BUSINESS MODEL FOR COMPUTATION OF BIOMASS POTENTIAL AND ANALYSYS OF THE
ECONOMIC ASPECTS OF THE “BIOMASS POWER PLANT”

6.1 Estimation of biomass potential

Biomass potential can be estimated in two ways:

i. Using the area of cultivation of a particular crop and its corresponding crop residue ratio and
ii. In case where area of cultivation is not known, then the total crop yield of the selected location
and crop to residue ratio is used to calculate the potential of biomass residue availability. For
example in Table 5, crop yield and “crop to residue ratio” is used for estimation of biomass
residues.
Case (i)
In case of availability of the data related to type of crops and its cultivated area, then the biomass
potential of the country or region can be estimated by using the Equation 1.

where `s’ represents the individual state selected for estimation of biomass potential
(Here ‘s’ varies from 1 to 35)
`A’ represents the total area of cultivation of a crop residue (in the State‘s’)
`r’ represents the type of the crop residue and `i’ represents the area of cultivation of that
particular crop. Here ‘i’ and ‘r’ varies from 1 to 7.
`Nj’ represents number of crop cultivated each year, corresponding to the crop ‘Cr’. Here j
varies from 1 to 4 depending upon the type of crop.
Case (ii)
In case of crop yields of the State/UT is known, then the biomass potential BP can be estimated using the
Equation 2.

where `Ci’ represents the yield of the crop `i’ and `Wr’ represents the weight ratio of crop residue to crop
yield for a given crop `i’.
`Nj’ represents number of crop cultivated each year (as in Equation 1)

6.2 Availability of different types of crop-residues in India

As agriculture is one of the major growing industrial sectors in India, there is a large scope to convert the
agricultural residues (Biomass) available into electrical power to meet our growing electricity demand.
Different crops and biomass availability is shown in Table 5. Those residues suitable for power production
are considered as potential sources (Pallav Prohit, 2006). Residues like saw dust from Wood is not
considered for avoiding deforestation and baggase from sugar cane is not considered because it is
already in used in the sugar factory.

Table 5 Selected Biomass potential for electric power generation

Sl.no Crop Crop-Residue Crop yield Residue to Residue Potential for Electric
(x1000 Tonne) crop ratio Available power generation
Cr ‘Ci’ ‘Wr’ (x103 Tonne) (Million Units)
{Ci*Wr} {(BP/1.5)x10-6 }
1 Paddy Rice Husk 96431 0.33 31822 21215
2 Cotton Cotton Stalk 10047 3.00 30141 20094
3 Maize Corn cob 19310 0.30 5793 3862
4 Mustared Mustard Stalk 5803 1.85 10736 7157
5 Ground nut Ground nut shell 6095 0.33 2011 1341
6 Arahar Arhar Stalk 3091 1.32 4080 2720
7 Coconut Coconut Shell 10893 0.13 1416 944
8 Total 85999 57333

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6.3 Warehouse sizing:

Different crops are cultivated in different seasons. To operate the biomass power plant round the year, it
is important to harvest and store the biomass available in different seasons. A suitable warehouse needs
to be designed and constructed to store the biomass and also to protect the biomass from wind and rain.
Area required for the warehouse of a given location can be written as:

Where `R’ is the weight of the crop residues (in tones), for a given type of crop ‘i’, `ρ’ is the bulk density of
the crop residue (in tones/m3).
` ’ is the height of the biomass storage (in meter). Here ‘h’ can vary from 4 to 6 meter
depending upon the equipment used for raw material (biomass) handling.

6.4 Estimation of potential for electricity generation:

1.5 kg of biomass will be used as raw material to generate one unit of electricity (one kilo watt hour, i.e. 1
kWh). Considering this biomass to electricity conversion ratio, the potential for electricity generation can
be written as:

Where ‘BP’ represents biomass potential in Kg

‘Eu’ represents Quantity of Electricity generated in number of units (in kWh), using the
available biomass potential ‘BP’
Since `U’ is large in number, for convenient usage, Equation 4 can be written as:
(5)
Where, ‘Em’ represents ‘Million Units’ of Electricity that can be generated using the available biomass
potential ‘BP’.

6.5 Cost Volume and Profit analysis of “Biomass Power Plant”

About 8000Biomass Power Plants (BPP) are necessary in order to convert the available biomass residue
which is shown in Table 5. The capacity of the biomass power plants will be of 1 Mega Watt (1MW) each.
The model shown in Figure 2 will be used to produce7.2 Million units of Electricity (per year) from 10800
tonnes of biomass. This electric power generated will be subsequently distributed to the respective user
sector as shown in Figure 2. A detailed business model is worked out for establishment of each Biomass
Power Plant.
Fixed cost involved for establishing a Biomass Power Plant can be written as a function of costs involved
as shown below:
FC  f ( Ei , C j )
(6)
Where ‘FC’ represents fixed cost
‘Ei’ represents type of equipments, where ‘i’ varies from 1 to n, here n represents different types of
equipments. In this case,
‘E1’ represents cost of equipment for collection & processing of biomass
‘E2’ represents cost of equipments for production of Syngas
‘E3’ represents cost of equipment for production of electricity and
‘E4’ represents cost of equipment for distribution of Electricity
‘Cj’ represents cost of civil works where ‘j’ varies from 1 to m, where m represents total number of
civil works. In this case,
‘C1’ represents Biomass processing shed
‘C2’ represents Biomass storage shed
‘C3’ represents Syngas production building
‘C4’ represents Biomass Power Plant shed
‘C5’ represents buildings for Electricity distribution equipments

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The above relations of these variables can be written as follows in order to compute the total fixed cost for
one Biomass Power Plant.
n m
FC   X i Ei  Y j C j (7)
i 1 j 1
where ‘Xi’ represents cost of equipment corresponding to ‘Ei’ where ‘I’ varies from 1 to n; and ‘Yj’
represents cost of each civil work ‘Cj’ where ‘j’ varies from 1 to m
Variable cost (VC) incurred for establishing of a Biomass Power Plant can be written as a function of the
following components:
(i) Cost involved in purchasing of raw material
(ii) Expenditure on manpower
(iii)Other miscellaneous expenditure incurred to operate the plant (like electricity, water etc.) and
(iv) Expenditures related with grid connection and Electric power transmission line.

VC  f ( Ri , M j , Pk , Lm )
(8)
The above relations of four variables shown in Equation 8 can be written as follows in order to compute
the total variable cost incurred in one Syngas production and bottling unit.
7 2 3 4
VC    j    k    l  Pl   Lm   (9)
j 1 k 1 l 1 m 1
where, ‘VC’ represents the variable cost incurred
‘j’ varies from 1 to m (in this case ‘j’ varies from 1 to 7)
‘j’ represents the cost of biomass corresponding to ‘j’
‘βk’ represents cost of manpower corresponding to ‘k’
‘Pl’ represents electric power consumed for particular process in production of Electricity, where ‘l’
varies from 1 to 3 as shown in Figure.5
‘l’ represents different process of Electricity production and distribution
 l represents cost of electricity consumed corresponding to Pl
The following are the deferent process involved in electricity production using Biomass Power Plant:
(i) Raw material processing is represented by (l=1)
(ii) Syngas production is represented by (l=2)
(iii) Electricity production is represented by (l=3)
‘γ’ represents the cost of electricity per unit
The following are the different activities of Electricity production using Biomass Power Plant:
(i) Transportation of biomass, from collection center to warehouse located, near Biomass
Power Plant (m=1)
(ii) Biomass Storage activity in the warehouse located in the Syngas production unit (m=2)
(iii) Electricity generation activity in the Biomass Power Plant near the warehouse (m=3) and
(iv) Electricity distribution from Biomass Power Plant to the user sectors as shown in Figure2
(m=4)

‘Lm’ represents the cost incurred in transportation/storage corresponding to ‘ m’

‘ω’ represents the overhead/ miscellaneous expenditure regarding operation and maintenance
Total annual cost (AC) of expenditure incurred on production of Electricity in one Biomass Power Plant
can be written as 20% of the total fixed cost (FC) incurred and the total variable cost (VC)
(i.e.) AC = (FC x 0.2) + VC (10)
Total annual profit realized through production and distribution of Electricity produced for each Biomass
Power Plant per year can be written as
AP = AS - AC (11)
where ‘AP’ represents the annual profit
‘AS’ represents the Annual sales in $.
‘AC’ represents the total annual cost incurred for production and distribution of Electricity as shown
in equation 10.

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Profit to Cost of investment Ratio (PCR) is one of the important parameter which can be computed as per
the following equation:
PCR = (AP/AC) x 100 (12)

6.6 The Breakeven point

The breakeven point for production of Electricity in terms of quantity of Electricity to be generated (per
year) can be written as
BEP qty = FC / (P- AVc) (13)
where, ‘BEPqty’ represents the breakeven point of quantity of Electricity to be generated in number of units
per year.
‘FC’ represents fixed cost;
‘P’ represents price of Electricity per unit of Electricity sold and ‘AVc’ represents average
variable cost per unit of Electricity Generated.
BEPs = BEP qty x P (14)
Where, ‘BEPs’ represents the breakeven point of the sale volume in $.
Profit to sales volume ratio can be written as
PVR = (AS - VC)/AS (15)
Where ‘PVR’ represents the profit to sales volume ratio
Variation in the biomass cost play a crucial role in governing the Electricity generation cost. The profile of
change in the Electricity generation cost versus the change of biomass cost is shown in Figure 3.
.

PC2

PC1

BC1 BC2

Figure 3 Profile of the Electricity generation cost versus the biomass cost

6.7 Sensitivity ratio:

The sensitivity ratio of the biomass cost to the Electricity generation cost can be computed using the
following equation:
 PC  PC1   BC2  BC1 
SR   2    (16)
 PC1   BC1 
Where, ‘SR’ is the sensitivity ratio of the biomass cost per Kg to the Electricity generation cost ($ per unit)
‘PC2’ is the Electricity generation cost per unit when the biomass (Raw material) cost is
‘BC2’ ($ per kilo gram)
‘PC1’ is the Electricity generation cost ($ per unit) when the biomass (Raw material) cost is
‘BC1’ ($per kilo gram)

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Further ‘SR’, the Sensitivity Ratio can be written as:
(17)
Where represents the deference between PC2 and PC1 and PC is the reference value that is PC1
Similarly represents the deference between BC2 and BC1 and BC represents the reference value that
is BC1

7. ECONOMICS OF THE BIOMASS POWER PLANTS

From Table 6, it would be noted that the biomass power plant needs about $.800. per kilowatt of
installation capacity. That is $ 800000 per Mega Watt of installed capacity. To minimize the transportation
cost, it is advisable to install smaller plant at different places in line with “Decentralized and Distributed
power Generation” (DDG) concept. One MW power plant can generate 7.2 Million units of electric power
per year.Biomass cost as $ .04 per Kg (which includes cost of raw material harvesting, transportation,
cost of processing and cost of storage). Various cost components are shown in Table 6. Power
generation cost per unit of electricity from biomass power plant works out to be $ .06, with the selling
price of .09 $ per unit; one MW biomass power plant can make a profit of .23 million $ per year. Thus the
payback period for capital investment works out to be about 4 years. “Profit to Cost Ratio” in case of
“Biomass Power Plant” is 0.72.

Table 6- Economics of Biomass Power Plant

Sl.No Component Amount ($/y.)
1. Capital investment (FC) 800,000
2. Biomass expense per year (@$.04/Kg) 288,000
3. Manpower cost 12,000
4. Operation and maintenance cost (ώ) 10,000
5. Total (Annual) expenditure (AC) 422,000
6. Total Revenue* (@$ .09 per unit) ( AS) 648,000
7. Net Profit (AP) 226,000
(With a power generation rate of 7.2 million units (MU) per year)

8. “DATA ENVELOPMENT ANALYSIS –DEA” OF ELECTRIC POWER GENERATION USING

VARIOUS RESOURCES

DEA, is a methodology based upon an interesting application of linear programming. DEA is originally
developed for assessing the relative performance of a set of firms (decision making units – DMU) that use
a variety of identical inputs to produce a variety of identical outputs. In DEA, instead of arriving at the
value added efficiency, a second level efficiency of Relative efficiency is calculated having the best
performing plant as base line. That is the best performing power plant have a relative efficiency of 100%.
The best performing plant which is having the assigned value of 100% Relative efficiency is also used to
arrive at several operating decision acts as Decision Making Unit (DMU) (Ramanathan R, 2009). Various
equations worked out for electrical power production and distribution units are given below:

8.1 Value added efficiency in power production plant can be written as:

(18)
where Ev represents value added efficiency,
Mu represents electrical power generated in Million units per annum
TC represents total cost ( FC+ VC)
Sp is selling cost of power in $ per unit
Some of plants operated at loss for deferent reasons (for example Diesel, Solar thermal and photovoltaic
power plants are operated at high cost of power generation to meet several requirements which is varying
from place to place). In such a situation, a weighted efficiency is calculated to eliminate negative factors.
The weighted value added efficiency is written as given below:
(19)

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where, ‘Ev.w’ represents the weighted value added efficiency,
are arbitrary numbers to remove negative numbers and are selected such a way as

8.2 Relative efficiency of the power plants

The relative efficiency of power plants can be written as given below:

(20)

where Er represents the Relative Efficiency

Pi represents the ith plant where i vary from 1 to 8.
DMU represents the best performing plant which is the decision making unit of value added efficiency Ev

8.3 Best performing plants

Value added by capital investment with respect to “Relative Efficiency” is obtained by using the following
formula:

Ecap=Er/FC (21)
and
Value added by Electric power production cost with respect to “Relative Efficiency” is obtained using the
following formula:

EPc =Er/PC (22)

Total Value Added Relative Efficiency (TVARE) is written as

TVARE = Ecap x Epc (23)

The Data Envelopment Analysis diagram (DEA) is shown in Figure 4.

In this case, TVARE for Coal, Natural gas and Wind mill are higher than TVARE corresponding to other
Electric power production plants (Biomass, Micro turbine, Diesel power, Fuel cell, PV and Solar Thermal).
To obtain the “Efficiency Frontier line”, authors join points B and C corresponding to Coal, Natural gas
and Windmill in the Data Envelopment Analysis diagram (DEA). Authors draw horizontal line from the
point B(referring Coal and Natural Gas) upto Y-axis. Similarly a vertical line is drawn from the point C
(referring Wind mill) upto X- axis. These points are named as A and D. The line ABCD is the “Efficiency
Frontier” line. Any point closer to ABCD can be considered as high performing “Efficient Production
Plant”.

Solar thermal power plant has the lowest value of Ecap when compared to other power production plants.
Solar thermal power plant can be identified by the point Q and the origin of (0, 0) as P. P and Q are joined
and the line PQ is extended upto Efficiency Frontier line (ABCD). The intersection point of the extended
line PQ with line CD is named as R. Since PQR is the bottom most line in the DEA diagram, Solar
Thermal power plant is comparatively less in “Performance Efficiency”.
To obtain the region of Data Envelopment for analysis of performance level, authors draw a parallel line
to X-axis starting from Q and draw another parallel line to Y-axis starting from Q upto the Efficiency
Frontier line (ABCD). The intersection points of these lines on ABCD can be named as F and E. QEBCF
represents the Data Envelopment for Analysis (DEA).

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 Coal / Natural Gas
E

Figure 4 DEA- Diagram showing the Efficiency Frontiers and Efficient operating zone
Ap= Ct x U x 8760 (24)
Where, Ap is the total electrical power produced in unite of kWh per year.
Ct represents the installed capacity of the plant in kW
U represents the Capacity utility factor of the plant over the period of one year (that is 8760 hours) is
computed using the above model developed for Electric power production and distribution plants. The
installed capacity per kWh and its annual production based on Capital utility factor were calculated.
Results of eight types of power plants are given in Table 7.

Table 7 Value added efficiency of power plants

Sl. Power Production production Out put Value Weighted Relative Epc= Ecap=
No Plants cost per cost per (Annual added Efficiency Efficiency Er/PC Er/FC
unit year sale) Efficiency Ev.w Er
$/kWh PC $/y $/y Ev
1 Fossil Fuel 0.05 350 561 0.60 1.60 100 0.29 0.50
Power
Plant*
2 Wind Mill 0.05 131 210 0.60 1.60 100 0.76 0.33
3 Biomass 0.07 441 543 0.23 1.23 77 0.17 0.48
Power
Plant
4 Micro 0.12 806 561 -0.30 0.70 43 0.05 0.22
Turbine
5 Fuel Cell 0.13 512 315 -0.38 0.62 38 0.08 0.06
6 Solar 0.14 207 123 -0.41 0.59 37 0.18 0.03
Thermal
7 Photo 0.25 383 123 -0.68 0.32 20 0.05 0.03
voltaic
Plant
8 Diesel 0.27 1892 561 -0.70 0.30 19 0.01 0.13
Power
Plant*

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9. RESULTS AND DISCUSSION

Till date, the shortage of electricity power demand is not met in india. It is found that there is always a gap
of 11 % to 18% of power demand-supply level. To meet the demand of power, Biomass is the major
promising source of energy. The production cost of Biomass power and its selling cost indicates a
brighter future for Biomass power plants. Detailed Economical analysis model was worked out using DEA
concept to analyze the performance of several plants with reference to the decision making unit DMU. It
may be noted that Fossil and wind power comes on the boundary of the “Efficiency Frontier”. “Bio mass
power plant” is closer to the efficiency frontier line.

REFERENCES:

Pallav Prohit et.al. “Energetic of coal substitution by briquettes of agricultural residues”. Energy, 31 (2006)
1321-1331.
Ramanathan, R. “Data Envelopment Analysis and an Application of
for Environmental Policy in the UK”. Paper presented in XIII Annual Conference of the Society of
Operations Management – OM13 (ACSOM2009 – OM13)” IIT Chennai, India, 2009
A report “Cumulative achievements as on 31.07.09” By Ministry of New and Renewable Energy
Government of India- 2009
David Simichi- Levi, et al., Designing and Managing the Supply Chain, TATA McGraw- Hill Publishing
Company Limited, 2008
http://www.cea.nic.in/power_sec_reports/executive_summary/2008_04/25-26.pdf
http://www.powermin.nic.in/JSP_SERVLETS/internal.jsp. As on August 31,2009.
Statistical information, www.Indiastat.com

AUTHOR PFILES:

P. Raman, is working as fellow in The Energy and Resources Institute (TERI), New Delhi, India.
His is pursuing Doctoral program in Pondicherry University, India. His interests area of research are New
product design, Supply Chain Management and Green Technology.

Dr. T. Nambirajan earned his Ph.D at Pondicherry University in 2001, He is currenly Reader in
Operations & Systems at Department of Management Studies, School of Management, Pondicherry
University, India. His research areas are Production & Operations Management, Supply Chain
Management, Quality Management and Management Information Systems. He has published several
research articles in National and Intrernational Journals to his credits.

REVIEW OF BUSINESS RESEARCH, Volume 10, Number 2, 2010 144

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