Bioenergy:Techno-economic Assessment

1. Energy Conclave-2006 Bioenergy:Techno-economic Assessment Dr. Jyoti Parikh Integrated Research and Action for Development (IRADe), New Delhi 27 July, 2006

2. Contents • Biodiesel • Bioethanol • Biomass Gasification

3. Integrated Energy Policy (IEP) • Biomass provides 1/3 of India’s total primary energy. • Biomass based fuels provide 81% of domestic energy. • This non-commercial energy sector is mainly managed by women without technology, management or investment involving backbreaking drudgery.

4. Integrated Energy Policy Biodiesel • Biodiesel provides an option to substitute diesel. Its economic practicability depends largely on the yields one can get from wasteland and /or returns one can get from good quality land with irrigation and fertiliser compared to other crops.

5. Integrated Energy Policy Bioethanol • Ethanol is used in Brazil as a fuel for cars. • Under Indian situation, there is scarcity of land and water , and the available quantities of ethanol. • There is need to find more economic use of other feedstock for the production of chemicals and potable alcohol. Biomass • Biomass can become a major energy source if fuel wood plantations are developed. This requires land which may have other competitive use.

6. Biodiesel

7. Biodiesel System Modification needed to use in Transport vehicles, stationary equipment, and oil cakes Separation of seeds, kernels, Procurement of seeds plantation of Oil bearing trees Oil extraction, blending and processing Plantation of Oil bearing trees Energy Policy

8. Selection of Species • 450 oil seeds species identified in various parts of India • For focused development only one or two species like Jatropha and Pongamia should be selected • However oil seeds which can yield suitable grade oil on economic scale can be tried to run R&D projects • Ratanjot (Jatropha curcas) • Adaptability to difficult agroclimatic conditions • Recommended by Committee on Biofuel Development, GOI • Karanj (Pongamia pinnata) • Avenue tree and wide adaptability • 27 % oil from seeds

9. Possible Yield Levels Under favourable agro-climatic conditions, it has potential to yield seeds up to 1 to 2 kg /plant or 2 to 5 tons /ha. Assuming: Yield variability 2 –5 tons and average oil content 33% For producing 1 mt of biodiesel: seeds required will be 3.3 mt Land required for producing 3.3 mt Jatropha seeds: At yield level 2 tons/ha: 1.65 m ha At yield level 5 tons/ha: 0.66 m ha

10. Wasteland that can be considered for Jatropha plantation

11. Criteria for Land Availability Department of Land Resources under Ministry of Rural Development, GOI has proposed the criteria: • Annual rainfall should exceed 600mm • The pH of soil should be less than 9 • Temperature should not fall below 00 C. • The slope of land should not exceed 300 • The land should not be waterlogged • The land should not be barren rocky/stony

12. Byproducts The marketing of byproducts is necessary for economic viability • Glycerol • Oil seed cake There will be 1.9 mmt oil seed cake (excluding shell) and 0.095 mmt glycerol as byproducts while producing 1mmt of clean Jatropha oil.

13. Overall Assessment • Uncertainty about Jatropha oilseeds yields, quotes for which range from 2 to 5 tons per ha. • Availability of land and competition of oilseeds crops with food crops.If arable land is diverted for Jatropha cultivation, economic returns should be around Rs. 30,000/ha/year. • Extent of byproducts, their potential uses and market availability and their prices

14. POLICY FRAMEWORK

15. Policy Interventions • Allocating community/forest land for Jatropha plantation • Minimum Support Price (MSP)/ Buy Back Guarantee of seeds • Bank Finance for plantation • Tax Exemptions/holiday • National Coordinated Research Project

16. Recommendations and Action Plan • Increasing the yield of Jatropha plants by using elite planting material. • Selection of varieties/strains which have more seed production and oil content. • Development of processing techniques which results in maximum oil recovery from seeds.

17. Bioethanol

18. Indian Government Initiatives • The Government of India has already announced the use of 5% ethanol-blended petrol from 30th Sep. 2003 in certain regions of nine states, the proportion of which would be increased to 10% in the later stage. • The price of ethanol is less than Rs 19 with no incentive for oil companies.

19. Potential of ethanol production

20. Sugar Industry • In India, about 60% the cane is utilized for sugar production, 30% for alternative sweeteners and balance 10% for seeds. • In Brazil, 45% goes for sugar production and 55% for production of ethanol directly from sugarcane juice.

21. Barriers and Constraints Market constraints • Biofuel Prices • State government clearance • Pricing of Ethanol • Interstate movement of ethanol • Concessional excise duty surcharge

22. Technological Constraints • Lower Plant Capacity • Use of batch fermentation process • Pollution control technologies in India • Non-economic returns from the Co-products and Effluents

23. Policy Interventions

24. At National Level • Detailed timeline for implementation of the programme • Incentive similar to other renewable sources of the energy (reduced taxes, duties etc.). • R & D for alternative subtract, processing technology • Institutional framework among different stakeholders involve in the production and distribution of the ethanol.

25. At national level……. • Uniform tax policy for all states and UTs • Institutional support for the fuel grade certification, labeling, and standardizing • Centralized agency for license to the agents involved in the supply and distribution • Maximizing the research and development effort in this field to develop efficient technology for processing and production of ethanol

26. At State Level • Clear cut state policy on the charges, levies fees etc related to the production and interstate transportation and use of the ethanol. • Proper incentives, licensing facility and cooperation for alcohol industry and entrepreneurs to set up ethanol plants. • Less interference of state excise department for the repair, modification, and expansion of the ethanol plants. • Remove restriction on the use of subtracts involve in the production of ethanol like sugarcane, bagasse, cane juice etc.

27. Recommendations and Suggestions • Elite planting material for producing sugarcane. • Uniform policy for Sales Tax on molasses and rectified spirit. • Removal of ‘Export Pass Fees’ for inter-state movements • Permission to sugar mills to manufacture alcohol from cane juice • Use of secondary juice for fermentation and production of ethanol.

28. Biomass Gasification

29. Potential of Biomass Gasification in India • In the area of small-scale biomass gasification, significant developments in technology have made India a world leader.

30. Barriers • Technical barriers • The induction of a gasifier system into a specific industry is not a simple add-on job. • Many small, trivial matters related to operation and maintenance procedure are act as barriers. • Financial barriers Both the small industry user and conventional financing institutions hesitate to invest in new technologies such as gasification.

31. Barriers cont… • Social barriers Biogasifiers are feasible given the inequalities with in villages, lack of skilled manpower to install and operate systems. • Institutional barriers The lack of in-house capabilities of small and medium industries in solving operational and maintenance problems

32. Policy Interventions

33. Financial Incentives A host of fiscal incentives and facilities should be available to both manufacturers and users of biomass gasification systems, including: • 100% accelerated depreciation for tax purposes in the first year of the installation of projects/systems. • No excise duty on manufacture of most of the finished products. • Low import tariffs for capital equipment and most of the materials and components. • Soft loans to manufacturers and users for commercial and near commercial technologies. • Five year tax holiday for power generation projects.

34. State government's policy • A number of States have announced policy packages including Wheeling, Banking, Third Party sale and Buy-Back which have been outlined. • In addition some of the states are providing concession/exemption in State Sales Tax and Octroi etc.

35. Recommendations and Action Plan Define mission statement • Support the development of gasification technologies for the conversion of biomass into clean, sustainable energy and other products Conduct situation analysis It will lead to conclusions defined in terms of: Science : Not sufficient Technology : Barriers exist Market : Large potential exists Awareness : Limited

36. Recommendations and Action Plan Define strategic elements/goals • Build on successful and existing technology platforms • Plan and implement a robust R & D program • Establish supportive infrastructure • Promote public communication programs Implement strategic planning process

37. Conclusion • The availability of land was considered as a major barrier in IEP for the development of bioenergy in India. • A massive programme is needed to develop energy plantations consisting of oil seeds species on large tracts of wastelands and fast growing tree species in pockets around villages for a national network of small, decentralised biomass gasifiers power plants. • The irrigated crop area could be used for sugarcane growing for bioethanol production.

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