Indian Government Support for MSW to Energy Projects

The Ministry of New and Renewable Energy (MNRE) offers financial incentives to a proponent who plans to set up a waste-to-energy project as per the prevailing policies of the ministry. The incentives are given to both private as well as public sector entrepreneurs and investors having technical and managerial capabilities MNES gets the detailed project reports appraised by the financial institutions to ensure that the project is feasible, viable and sustainable. The incentives offered are:

  • For commercial projects, financial assistance is provided by way of interest subsidy in order to reduce the rate of interest to 7.5%, capitalized with an annual discount rate of 12 %. The assistance is routed through financial institutions (FIs)/ Lead FI of the project, etc.

 

Type of Projects

Maximum Eligible Interest Subsidy to Reduce the Interest Rate to 7.5% (Rs. in Crore/ MWh)

 

Urban and Municipal Wastes 

Industrial Waste

Waste to power 

2.00  

1.50

Waste to fuel  

0.50  

0.50

Fuel to power   

1.00    

1.00

 

  • For demonstration projects comprising innovative projects for generation of power from municipal solid wastes and selected industrial wastes, financial assistance up to 50% of capital cost of the project limited to Rs. 3.00 crore per MW is provided to the project proponent.
  • For power generation through Sewage Treatment Plants (STPs), financial assistance up to 50% of the incremental capital cost for generation of power from biogas being generated at STPs is provided.
  • In addition to the above, financial incentive at the rate of Rs. 15.00 lakh per MWe is given to Municipal Corporations/ Urban Local Bodies, for supplying the garbage free of cost at the project site and providing land on a long-term lease, viz. 30 years and above, at a nominal rent.
  • State Nodal Agencies are given an incentive @ Rs.5.00 lakh per MWe of power for promotion, co-ordination and monitoring of projects.
  • For financial institutions, a service charge of 2% of the actual subsidy channeled through them to the promoter or other FIs is allowed, subject to a maximum of Rs.2.00 lakh per project.
  • There is also a provision for giving 50% of the cost of preparation of Detailed Project Reports (DPR) or Techno-economic Feasibility Reports, subject to a maximum of Rs.2.00 lakh per report to the project proponent.
  • If considered necessary by MNES, financial assistance may also be provided towards full cost of carrying out studies for assessment of resources for setting up waste-to-energy projects.
  • For promotional activities, assistance is available for organizing of training courses, workshops and seminars, awareness generation and publicity.

 

Incentives under the National Program on Energy Recovery

S. No

Project Description

Incentives

1

Power generation from MSW involving RDF

Rs. 15 million per MW

2

Power generation on high-rate biomethanation

Rs. 20 million per MW

3

Power from MSW on gasification-pyrolysis & plasma arc

Rs. 39 million per MW

4

Biomethanation technology for power generation from vegetable market waste, slaughterhouse waste above 250KW capacity

50% of project cost; max Rs 30 million per MW

5

Project development assistance per project

Up to Rs. 1 million

6

Capacity building initiatives

Rs 0.3 million per event

Source: MNRE

Carbon Credit Benefits from MSW to Energy

Solid waste management practices release high quantities of green house gases in the atmosphere. This sector therefore creates significant opportunities for carbon mitigation, which could eventually become tradable carbon credits. Some waste to energy projects in India have already started earning carbon credits.

As of 2011, there is a total of 10 registered projects fetching about 889,358 CERs /annum (Corresponding to a revenue potential of 0.5 billion INR). Presently 32 CDM projects are under validation stage seeking for registration. These projects can generate more than 10 million CER’s/annum (Corresponding to a revenue potential of around 6 billion INR) (Data as on Feb 2011).

Examples for Carbon Credits Projects by the Indian Waste Management Industry

Project

Average Annual Emission Reduction

(CERs)*

Bundled Waste Processing Facilities in India

158,077

Gorai Landfill closure and Gas Capture Project, Mumbai, India

124,028

Installation of Bundled Composting Project in the state of Tamil Nadu

115,162

Upgradation and expansion of APMC compost plant at Tikri, Delhi

35,329

Establishment of compost production unit of 100TPD at Lalganj

42,050

Upgradation, operation and maintenance of 200TPD composting facility at Okhla, New Delhi

33,461

Avoidance of methane emissions from MSW and food waste through composting

23,431

MSW based composting at Kolhapur, Maharashtra

30,430

The Timarpur-Okhla Waste Management Company Pvt Ltd’s (TOWMCL) integrated waste to energy project in Delhi 

262,791

SESL 6MW MSW based power project at Vijayawada & Guntur, Andhra Pradesh

64,599

*Certified Emission Reduction


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