The Hindu Business Line : Factor carbon emissions into fuel costs

"Biopower compares favourably with other renewables such as wind and hydel as also fossil fuels such as coal, oil and gas if the environmental impact is factored in." — MR BANMALI AGRAWALA, MANAGING DIRECTOR, WÄRTSILÄ INDIA

When climate change worries and global warming fears surround us, as they do now, solace comes in the form of those who talk `green'. Such as, Mr Banmali Agrawala, Managing Director of Wärtsilä India Ltd, and perhaps, `the Sexy Green Car Show' in the Eden Project, UK.

Many a `beauty' is lined up at the Eden Show, on till April 15. Sean O'Grady writes (www.belfasttelegraph.co.uk) about `the ultra-economical little Volkswagens and Citroëns', `future- facing carbon-fibre technology and biofuels, thanks to Ford and Saab', and `Le Mans racer that can run on biodiesel derived from the seeds of jatropha trees'.

Biopower is energy or power produced from biomass, usually agricultural, plantation and forestry residues or municipal and other wastes, explains Mr Agrawala. "It could also refer to power generation using liquid bio-fuels such as straight vegetable oils. It is another form of renewable power and it is far more reliable as compared to other renewables such as wind and solar, in the sense that it can ensure 24x7 availability of power, right through the year, using a mix of biofuels."Here, Mr Agrawala takes on a few questions from Business Line.

How much biopower do we produce? What is the potential?

The total installed capacity of biomass-based power plants in India is around 1100 MW, with more than half of this coming from bagasse-based generation of sugar plants.

Our studies on availability of non-bagasse biomass across 10 agri-progressive States indicate that there could be a surplus biomass availability of 130 million tonnes a year.

Out of this, 106 m.t. are fit for use in power generation. This translates theoretically to a power potential of 9600 MW. If we apply filters such as seasonality of the fuels, problems of aggregation and issues of power evacuation, I would say that we are still left with an immediate potential of over 2000 MW.

What of costs, and how do they compare with the alternatives?

They compare quite favourably with other forms of renewables such as wind and hydel and are far cheaper than solar.

They would also compare well with traditional fossil fuels such as coal, oil and gas if the environmental impact, particularly carbon emissions is also factored in the cost of fuel.

It is time that even India recognised the need to be careful about emissions because the density of population in Asia/India is far more than in the West.

Further, we in India are heavily dependant on coal as a fuel for our energy needs and have a tendency to use the generation cost of coal-based power as the benchmark while evaluating other fuel options.

Coal might be a cheap fuel but is also the dirtiest and most polluting of all fossil fuels. It is therefore important that we have policies where by we allow coal to be used only if the overall thermal efficiency is at least 50 per cent.

What challenges, technological and otherwise, need to be surmounted?

The main challenge in biomass energy is managing the fuel side and aggregating the fuel of right quality and quantity in time for sustained operation of biopower plant.

The area over which fuel needs to be collected is rather large, further there is little consistency in the type and kind of fuel.

In Europe the fuel side is far better organised and therefore the efficiency of solutions available is far higher. In India, as our solutions are made to cater to a range of fuels, the efficiencies are far lower.

Do we need fiscal incentives and policy changes in this sphere?

Yes there would be a need for incentives, which is nothing but a way of recognising the emission dimension.

The European Union is the most aggressive in terms of reducing emissions and actually enacting policies to make this happen.

We need to take a leaf out of the EU book and see what can be implemented in India.

Recently, China also initiated measures to encourage biopower, including the idea of increasing the charges for fossil-fuel based power so as to cross-subsidise biopower.

Most countries have also set definite targets on the percentage of generation from renewable sources out of the total generation, as the targets are in terms of units (kWh) rather than installed MW, the annual plant load factor assumes importance.

Wind, solar, etc., with their poor PLF will not help in achieving these targets. Biopower will be the best, if not the only answer.

In sum, therefore...

We In India seem to be taken up by the wind power phenomenon but we need to realise that power from wind is not a 24x7, all-season option. Consequently you need to set up an equal amount of standby capacity.

This means the capital cost of wind solutions is actually double of what is apparent. Western countries are realising this and one now consistently reads the concerns that managers of utilities have in managing infirm wind power.

Biomass power on the other hand is not only firm but it also promotes rural employment. It is an ideal and eco-sensitive form of decentralised generation that can be used in industrial captive consumption, rural electrification or in enhancing the grid capacity.

As I mentioned earlier, several countries have set themselves clear targets on renewable energy. Even in India, the Electricity Act specifies that the grids should aim at sourcing a certain percentage of total power from renewable sources, in the medium term.

Because biopower is a 24x7 option and because it offers good employment potential, I am sure that it will be adopted in a big way.

The growing concern about global warming and the cry for restriction on carbon emission will further accelerate the growth of biopower.

There is tremendous amount of biomass available around the world and this has been traditionally been used for energy production globally, he assures. Thankfully, over time, the efficiency of biomass combustion has improved substantially, one learns.

Mr Agrawala is Vice-President-Bio Power and a member of the global Power Plant Board of Wärtsilä. He was recently elected as the Deputy Chairman of the Confederation of Indian Industry (CII), Western Region for 2007 - 08.

Wärtsilä, a 170-year old Finnish corporation, is deep into biopower. Literally, at times, as in the case of Vilppula sawmill owned and operated by Finnforest; it processes around 1.35 million m³ of spruce every year. The sawmill's biopower and bioenergy plants from Wärtsilä, delivered in 2004, `cover 70 per cent of the mill's electrical consumption and 100 per cent of their thermal energy need for drying the lumber, as well as heating the nearby town of Vilppula with its 5000 inhabitants'. District heating energy sales will generate valuable additional income and thus further improve the feasibility of the project, explains a page on www.wartsila.com.

With regard to biopower, Wärtsilä specialises in products that burn high-moisture, fuels which are typically available in northern Europe, says Mr Agrawala. "We have set up a number of biomass based plants in Northern Europe. We are now expanding the concept in Asia and other parts of the world, to burn tropical biofuels that are available there."

Wärtsilä's revenues add up to more than 3 billion euros, and are from ship power, power plants, and services. It is present in over 60 countries around the world and employees over 12,000 people. The Indian operations of Wärtsilä are the largest that the Wärtsilä Group has outside of Europe. Wärtsilä has close to 3,000MW of installed capacity within India and employs around 1,300 people in the country.

The latest India news is about the `successful' delisting. In January, the company had offered to acquire `1,240,599 shares, or 10.3 per cent of the share capital'. Pursuant to the offer about 7 per cent of the total shares are to be acquired for consideration of approximately 9 million euros. "After the completion of the offer Wärtsilä Corporation will hold directly or indirectly 96.6 per cent of Wärtsilä India shares."

http://AccountSpeak.blogspot.com

D. Murali

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