The proposal aims to streamline power purchase, ride tariff challenges, and fuel confidence in India's waste-to-electricity sector, spurring investments and cost reduction
In a bid to address the challenges faced by waste-to-electricity plants in India, a Parliamentary panel has recommended the establishment of a special purpose vehicle (SPV) involving key entities like the Solar Energy Corporation of India (SECI), Indian Renewable Energy Development Agency (IREDA), and private firms. The move aims to expedite power purchase agreements (PPAs) for these plants.
The waste-to-electricity sector has encountered significant delays in executing PPAs with State Electricity Departments/DISCOMS, primarily due to the relatively high tariff of approximately Rs 8 per kilowatt-hour (KWH). This tariff is higher than other renewable energy sources, such as solar power.
The Parliamentary Standing Committee on Energy, in a report presented in Parliament, suggested that creating an SPV could streamline the procurement of power from waste-to-electricity plants. With partnerships from central public sector undertakings like SECI, IREDA, and private companies, this SPV would procure power from these plants.
Once the SPV acquires power from the waste-to-electricity plants, it can sell the generated power to interested entities and even list it for trading on power exchanges. This proposed arrangement is expected to provide a guaranteed off-take of power, instill confidence among stakeholders, and make a compelling case for attracting low-cost capital from the market.
Many waste-to-electricity projects operate under the public-private partnership (PPP) model, relying on the sale of power generated from municipal solid waste (MSW) and byproducts used in construction. The revenue from these projects comes from selling the ability to state DISCOMs.
Addressing environmental concerns associated with waste-to-electricity plants, the panel suggested that Engineers India Ltd., with its ecological engineers and scientists, could assist in developing technology-based mechanisms to reduce emissions, including emission filters.
The committee emphasised the importance of studying and adopting global best practises in waste-to-electricity plants. It proposed the establishment of biomass trading platforms to ensure real-time availability and accessibility of raw materials and finished products.
Additionally, the panel called for comprehensive mapping of waste and feedstock to optimise utilisation in various areas such as compressed biogas, bio-ethanol, biomass-to-power, methanol, green hydrogen, and more. Regular mapping updates were recommended to improve the demand-supply situation and enable short and long-term planning for bioenergy and waste-to-energy in the country.
The committee's recommendations also extended to developing a robust market for biofertilisers through public awareness campaigns, information and education programmes, incentivisation of farmers, and supply chain development.
Furthermore, the panel suggested that setting up waste-to-energy plants in industrial townships could reduce net waste generation and save transportation costs. Mandatory establishment of such plants was viewed as contributing to achieving the goals of Extended Producer Responsibility (EPR).