Ashish Bhandari, Managing Director and CEO of Thermax Ltd, recently shared an interesting datapoint. Ten years ago, Thermax started a subsidiary, Thermax Onsite Energy Solutions Ltd (TOESL), to install biomass-fired plants on customers’ premises and sell them steam.
“After seven years, we were operating only about 15 boilers,” Bhandari said. But business picked up thereafter and TOESL today has 40 plants either operating or under construction. “Business is growing at 50 per cent a year,” he said.
What changed in the last three years? The answer, in two words, is ‘energy transition’. Earlier, TOESL’s potential customers — companies such as those in the food and beverages segment — were using coal to produce steam. “Now every one of my customers is asking himself, ‘what is my energy transition story?’,” Bhandari said. TOESL today processes 2,000 tonnes of biomass a day.
Thermax’s experience is indicative of the changes sweeping across the Indian biomass industry, which, after years of fits and starts, appears to be on the move.
Shift from electricity to biofuels
For years, ‘biomass industry’ meant plants that burnt biomass to produce electricity. In retrospect, it appears that these early movers had started off on the wrong foot. Biomass produced expensive electricity, which was never viable. Availability of biomass was uncertain, and farmers — who generated the bulk of it — jacked up prices when they saw the biomass plant was dependent on them. There was no way to pass on the additional costs to consumers. Furthermore, biomass storage often involved crude shacks (cost control); when it rained the plant had to be shut till the biomass could be dried out.
Even now, biomass-based electricity production has not seen any traction. Since July 2020, the country has added just 312 MW of capacity.
But once the biomass companies gave up electricity generation and shifted to biofuels or other output like steam, things began looking up. This shift coincided with the growing emphasis on energy transition and favourable regulations that ensured greater demand for biomass to help meet international emission reduction commitments.
The government is pushing for more ‘compressed biogas’ (CBG) plants. According to the GOBARdhan portal, 1,137 CBG plants have been registered (which gets them government benefits as and when they are announced). These include 677 operating biogas plants and 290 under construction.
Reliance Industries has said it would set up 100 CBG plants in the next five years. These plants would consume 5.5 million tonnes of agri-residue and organic waste.
Punjab Renewable Energy Solutions Pvt Ltd (PRESPL), a company backed by Mitsui, Shell and the NEEV fund (of the UK government and State Bank of India), is seeing 60-70 per cent annual growth, the company’s Chairman and Managing Director, Lt Col Monish Ahuja, told businessline recently. Like TOESL, the Rs 160-crore PRESPL, too, puts up biomass-fired plants on customers’ premises and sells steam.
PRESPL, which was set up in 2011, counts well-known names such as Pepsi, L’Oreal, Sun Pharma and Glenmark among its customers.
Then we have the examples of the Bengaluru-based GPS Renewables, which recently took over a German biomass company called Proweps Envirotech. Founded in 2012 by two alumni of IIM, Bengaluru, Mainak Chakraborty and Sreekrishna Sankar, GPS Renewables, which is backed by NEEV Fund, Triodos and Capsian Impact Investments, produces an assortment of biofuels, including bamboo-based ethanol.
Gruner Renewable Energy, a five-month-old company that has tied up with German company BioEnergy for Technology, has orders to build 42 biogas plants. The company’s founder and CEO, Utkarsh Gupta, said they would build at least 100 biogas plants in 2023.
Varanasi-based Biezel Green, established by Dr Preetam Singh, who teaches at IIT BHU, makes and sells his invention, ‘thermally accelerated anaerobic digestor (TAD)’, which can produce hydrogen and other products like methane and biochar from biomass. India’s first biomass-based hydrogen plant, put up by Watamo Energies of Uttar Pradesh, is based on Biezel Green’s TAD.
There are many other companies in the biomass segment such as Swaraj Green Power and Praj Industries.
Clearly, biomass energy is taking off. And it is likely to get better, not in the least because of the upcoming Global Biofuels Alliance with participation from India, the US and Brazil, among other countries.