📅 Issued By: Ministry of Power (MoP), Government of India
📍 Key Dates:

08 Oct 2021: Original Policy Issued
03 May 2023: Addendum Introduced
14 May 2024: Clarification Issued
🗂️ Reference Document:

MoP_Biomass Cofiring Policy L-O Download

📘 Description

This policy outlines the Indian government’s commitment to integrating biomass as a co-fuel in coal-based thermal power plants (TPPs). It includes provisions on:

Tariff structure
Types of acceptable biomass
Fuel cost pass-through eligibility
Penalty for non-compliance

The goal is to curb agricultural stubble burning, reduce carbon emissions, and promote a cleaner, more sustainable energy mix in India’s power sector.

🧾 Key Policy Updates

🔹 Original Policy (08.10.2021)

Encourages TPPs to adopt biomass co-firing.
Provides tariff mechanisms for Energy Charge Rate (ECR) inclusion of biomass.
Applicable to plants under Section 62 and Section 63 (competitive bidding) of the Electricity Act, 2003.

🔹 Addendum (03.05.2023): Expanded Biomass Types

Newly Eligible Biomass Materials under Para 4:

Agro-Residues:
Paddy straw, soya husk, cotton stalk, jawar, bajra, maize, jute, mustard, sesame, etc. (if not used as fodder).
Additional Types:
- Bamboo and its by-products (dust, chips, cuttings)
- Horticultural waste (dry leaves, tree prunings)
- Elephant grass, pine needles, sarkanda

🔹 Clarification (14.05.2024): Section 63 PPAs

In projects with fuel cost pass-through, biomass pellet costs are also eligible for pass-through in ECR, without invoking Change-in-Law clause unless the cost increase exceeds 10% of the Letter of Credit value.
Especially applies to Case-2, Scenario-4 plants.

🏭 Applicability: Who Must Comply?

✅ Mandatory Compliance

CPSUs: Central entities like NTPC, NLC India Ltd
State Gencos: All state-run thermal plants
IPPs (Independent Power Producers): Under PPAs (Section 62/63)
Private Plants Selling to Discoms: Via long-term PPAs
Captive Coal Plants: Advisory compliance unless made mandatory by state pollution control boards

⚠️ Penalty for Non-Compliance

🚫 Enforced by MoP, CERC, CEA

Issue	Penalty/Consequence
<5–10% Biomass Usage	0.25% of Fixed Cost per Day (per unit of shortfall)
Grid Dispatch Priority	Reduced merit order status
Environmental Clearance	Delay or rejection in EC/NOC approvals
ECR Compensation Disallowed	No cost recovery for biomass if not implemented or reported

✅ Compliance: How to Prove Co-firing

Area	Proof Required
Fuel Procurement	Invoices, GST slips, vendor details
Feeding Record	Boiler logs, hopper feed logs, system integration data
Monitoring Reports	Flue gas analysis, ash content logs
Monthly Submissions	Reports to MoP, CEA, SLDC
Audits	CEA/3rd-party compliance verification

📎 Supporting Documents

🗂️ Download Policy PDF
🔗 Ministry of Power Website
🔗 Central Electricity Authority (CEA)
🔗 Ministry of New and Renewable Energy (MNRE)

🧩 Conclusion

The Biomass Co-firing Policy is a critical step toward a sustainable, cleaner energy future for India. It mandates coal-based TPPs to transition partially to renewable biomass fuel sources, offering tariff recovery benefits and helping combat environmental pollution.

All thermal power stakeholders—central, state, or private—must align with these rules, submit regular compliance data, and ensure transparency in biomass procurement and consumption.

⚠️ Disclaimer

This summary is intended for general informational use. Always refer to official policy circulars and consult legal or energy regulation experts for detailed implementation.

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