Tariff extension for bagasse-based cogeneration plants in Maharashtra

• 14 years ago (2010-08-03)
• David Flin

North America 1021

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In Maharashtra state, India, the Maharashtra Electricity Regulatory Commission (MERC) has granted an extension to the tariff fixed for bagasse-based cogeneration projects up until March 2011. The tariff of Rs 4.79 per kWh, fixed last year, was valid until March 2010.

A statement issued by Prakash Naiknavare, Executive Director of the Cogeneration Association of India (Cogen India) and the Managing Director of the Maharashtra State Federation of Cooperative Sugar Factories (Sakhar Sangh) said that MERC had proposed to slash the tariff, in view of the reduction in bagasse prices. He then said: “However, both Cogen India and Sakhar Sangh opposed the move and pointed out that the generation cost has gone up and expenditure also had to be incurred for modernisation and expansion of the cogeneration projects.”

MERC had initially fixed the tariff at Rs 3.05/kWh, which was revised last year to Rs 4.79/kWh. Naiknavare said that bagasse prices, which were Rs 2200 per tonne when the tariff was revised, fell to Rs 1900 per tonne, and currently stand at Rs 1400-1500 per tonne. “We told MERC that bagasse prices are not stable as they depend on the availability of sugar cane for crushing and on the alternative uses of bagasse such as making particle board. The commission agreed with our argument. We also explained that the generation cost of a cogeneration project was Rs 5.25/kWh.”

Reacting to the extension granted by MERC, Naiknavare said that it was a welcome development for sugar factories, especially when sugar prices were on the decline. He said: “Cogeneration projects are proving to be a good source of additional income for sugar factories.”

There are currently 26 cooperative sugar factories in Maharashtra generating 317 MW of electricity, which is supplied to the Maharashtra State Electricity Distribution Company. Another 11 sugar factories will start generating 206 MW from December 2010.