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Biomass Power in India Key Highlights

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The table gives an overall view of the potential of biomass power, installed capacities, government incentives, and major barriers for biomass based power production in India.

Total available potential

19500 MW

Exploited potential (production/installed capacity)

  • Direct Biomass 901 MW
  • Cogeneration (bagasse and non-bagasse) – 1649 MW installed
  • Gasification: 125 MW

Specific government incentives

  • Customs Duty Exemption/Reduction on parts of Biomass Operated Electricity Generator
  • Excise Duty Exemption on parts of Biomass Operated Electricity Generator
  • Exemption in Central Sales Tax
  • 100 % accelerated depreciation
  • Income Tax Holiday for ten years (can be availed within 15 years).
  • Power sector reforms have encouraged investment in grid-connected biomass projects.

Amount of investments happening in this now, expected in future

In the current Five Year Plan period (2007 to 2012), the government’s target for biomass power capacity is 1200 MW and 500 MW for cogeneration plants 

Key bottlenecks and barriers

  • Feedstock supply and price security
  • A less concentrated form of energy, making it less efficient
  • Emergent competing usage: Recently developed plastics from biomass are cheaper and meet or even exceed most performance standards, but lack the water resistance or longevity as conventional plastics.

Cost of power generation - and trends in the same over years

Cost of electricity production – Rs 2.25-3.25 / kWh. This includes all costs, including capital depreciation, O&M, insurance and interest costs. This cost could increase over the years as the cost of biomass increases.


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