Energetica India Magazine December 2020

58 energetica INDIA- December_2020 Solid biofuels especially Briquettes are manufactured in a very distributed manner and offers investment opportu- nity across India. This has not only enabled many entrepreneurs to start the business but also generated huge rural employment. A standalone briquette plant can generate Rs 50,000-70,000 per month net income if run optimally. This implies very good returns on investment especially in rural areas where the capital cost is relatively less. Clean energy encompasses all zero-car- bon energy sources and is in a sweet spot in India, offering a huge investment opportunity. Clean Energy has support from not only the government but also from global funds and multinational com- panies who value the Paris Accord and are looking to comply. All renewables sources such as Solar and Wind form part of clean energy, however, there is relatively new and developing source – Biofuels – clean energy products made from agri and wood waste generally in the form of pellets and briquettes. Biofuels are a renewable source of ener- gy as well cleaner source than fossil fuels such as coal or furnace oil. These pro- duce minimal amount of Carbon monox- ide and oxides of Sulphur and Nitrogen, which are polluting and damaging to the environment. Most users have moved from Fossil fuel to biofuels as a source to adhere to tightened pollution norms and lower operating cost. Usage pattern for biofuels especially the solid biofuels made from agriculture residue has found its way to Industrial boilers, heat gener- ators and even small burners. Some of biofuels products such as pellets have recently been procured by NTPC for co-firing with coal in their power plants. A single tender from NTPC for 5% co-fir - ing is worth $400mn and this is expected to be followed by even the private power producers. Similarly biofuel pellets have been replacing LPG and Diesel with huge cost savings and thus as a much wider acceptance among applications. Moreover, the raw material for this type of fuel is wastage or agriculture residue and thus has minimal usage or cost. Cost savings and consistent supply of raw material, the usage patterns of com- panies has now become long lasting, thus making the biomass a sustainable investment option for the VCs. Anything with lucrative economics of production and visibility on sale attracts investment. This can be well established from invest- ments seen in the solar and wind energy segment. Solid biofuels especially Briquettes are manufactured in a very distributed man- ner and offers investment opportunity across India. This has not only enabled many entrepreneurs to start the business but also generated huge rural employ- ment. A standalone briquette plant can generate Rs 50,000-70,000 per month net income if run optimally. This implies very good returns on investment espe- cially in rural areas where the capital cost is relatively less. Although, the possibility of mega plant is unlikely since the raw material is very scattered, multiple plants remain viable with controlled raw material cost. Similarly for pellets business the operat- ing margins are even better with possible branding and multiple pricing options. We clearly see pellet manufacturing as an emerging trend expect investments in this field. Another potential area of investment is biomass or raw material procurement for these plants or even for direct firing into biomass based power plants. India gen- erates ~500 mn tonnes of agri residue every year and of which almost 200mn tonnes has been destroyed/ burnt with- out any productive use. This in value terms is almost Rs 500 bn ($6bn) worth of business. The agri residue can also be used as a feedstock for manufacturing of liquid or gaseous biofuels using bio-di- gestors or making of ethanol 2G technol- ogy. We expect investment in automation and supply chain of agri residue to be the biggest investment opportunity still to be exploited. Needless to say that equipment manufacturing for collection Ashvin Patil Founder and Director, Biofuels Junction Pvt Ltd POWER SECTOR Growing Opportunities to Invest in the Clean Energy Sector