ACADEMIA SUMMARIES

Sustainable model for financial viability

of decentralized biomass gasifier based
power projects
The original paper contains 36 sections, with 10 passages identified by our machine learning
algorithms as central to this paper.

Paper Summary
SUMMARY PASSAGE 1

Introduction
The World Bank (2008) argues that while the benefits of rural grid electrification are similarly realized
in off-grid situations, the amount of power made available by decentralized systems are relatively
smaller and the services provided are more basic. Specifically, for biomass gasifier based power
projects (BGPP), many of the projects are not showing the desired success due to low load factor
and financial unviability in spite of the subsidy amount of as high as 90% of the total project cost
(TERI, 2009a). This unviability may be true for other developing countries also where biomass
projects have been attempted to electrify rural and off-grid areas.

SUMMARY PASSAGE 2

Biomass Gasification Based Power Generation

Biomass gasification is a process of converting solid biomass fuel into combustible gaseous fuel
(called producer gas) through a sequence of complex thermo-chemical reactions. A BGPP usually
consists of a biomass preparation unit, a biomass gasifier reactor, gas cooling and cleaning system,
internal combustion engine suitable for operation with producer gas as main fuel, electric generator,
and electricity distribution system. Biomass preparation unit is used to cut the collected biomass to
proper size suitable for feeding into the biomass gasifier.
SUMMARY PASSAGE 3

Rationale
Apart from the immediate techno-economic viability of small capacity biomass gasifier projects, it is
also pertinent to consider their long term sustainability. The introduction of productive load connected
to the biomass gasifier can address this issue to the some extent due to increase in CUF of BGPP
and usual practice of recovering little higher price of electricity from such productive micro-enterprises
as compared to domestic consumers. However, it is also important to ensure that the operation of
microenterprises receiving electricity supply from BGPP remain viable by paying such higher prices of
electricity as compared to their earlier expense on fuel (such as diesel or kerosene).

SUMMARY PASSAGE 4

Broad Framework
This paper estimates the cost of electricity generation under different operating conditions and
thereby the minimum desired price of electricity for ensuring viability or financial sustainability of the
BGPP from a PIA perspective. The estimation is based on actual field performance data collected
from a number of projects implemented under test phase of VESP (TERI, 2009b).

SUMMARY PASSAGE 5

Financial Viability From Pia Perspective

Capacity utilization factor (CUF): It was observed during field assessment, that most of the BGPP,
implemented under VESP, operates at a load of 40-50% of their rated capacity for 3-5 h daily to meet
lighting requirement with hardly any productive load. Considering these aspects, a CUF of 7% has
been considered for estimating the MDP for BGPP without any productive load. For best-case
scenario, a 33% CUF (which is 80% of connected load and about 10 h of operation) has been
considered for the analysis.

SUMMARY PASSAGE 6

Results And Discussion

4.29/kWh, respectively, at a CUF of 33%. However, based on the field assessment of the VESP test
projects, it was found that most of the BGPP have been operating at a CUF of only 7%. In such case,
with the above mentioned assumptions (with subsidy), the MDP for 10 and 25 kWe gasifier systems
was found to be substantially higher at Rs.
SUMMARY PASSAGE 7

Viability Form A Consumer Perspective

The real challenge is to bring down this price of electricity in line with the rural consumer's payment
capacity. It was observed during the assessment of VESP test projects, that lighting load accounts for
about 40% of the rated capacity of the BGPP. Thus, one way to enhance the CUF and bring down
the cost of generation is introduction of productive load or creating convergence with economic
activity based on electricity.

SUMMARY PASSAGE 8

Case Study For Village Dicholi

During the field assessment of the village, it was observed that there is an existing 5 HP diesel-
engine-based flour mill and rice mill managed by a woman self help group (SHG) in the village. To
make the BGPP financially sustainable, the existing flour mill and rice mill can be easily coupled to an
electric motor, which can be powered by the gasifier system. This will help the SHG to save on fuel
(diesel) expenses and the saving, if diverted to VEC, could become an additional revenue source for
VEC.

SUMMARY PASSAGE 9

Table 5
Required tariffs at different domestic (Dom) and commercial (Com) load for sustainability in Scenario-
2 (10 kWe BGPP). Rs. 2400/-per month.

SUMMARY PASSAGE 10

Conclusion
The above analysis indicates that for achieving financial sustainability, the BGPP should operate at
more than 30% CUF i.e. average load of 70-80% of the rated capacity for 8-10 h per day and about
350 days in a year. The economics of BGPP become more favorable for a higher capacity system
such as a 25-kWe system as the MDP for that scale (running at 80% of the rated capacity and about
4 h of operation) is lower at about Rs. 6.62/kWh as compared to Rs.