Punjab paddy straw-based 10MW Jalkheri power plant a non-starter

Three years on, work at biomass project in Fatehgarh Sahib district fails to start over unviable tariff of 5.84/unit
The 10MW biomass power plant at Jalkheri village in Fatehgarh Sahib district of Punjab was aimed to provide an eco-friendly solution to the state’s stubble burning problem. (HT file photo)
The 10MW biomass power plant at Jalkheri village in Fatehgarh Sahib district of Punjab was aimed to provide an eco-friendly solution to the state’s stubble burning problem. (HT file photo)
Published on Nov 01, 2021 05:07 PM IST
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Amid the spike in paddy stubble fires over the past week, the much-hyped eco-friendly alternative of the Jalkheri biomass project of Punjab State Power Corporation Limited (PSPCL) has remained a non-starter even three years since its re-tendering.

Also read: Farm fires: Provide cost-effective tech to farmers

The 10-MW biomass power project, located at Jalkheri village in Fatehgarh Sahib district, can handle paddy straw of one lakh acres. The plant has been idle since September 2007.

In December 2018, the PSPCL leased it out on renovate, operate and transfer (ROT) basis for 20 years. Citing it as a major development at that time, the PSPCL said it has managed to bring M/s Sukhbir Energy Private Limited for this work in reverse tendering of tariff at 5.84 a unit. But the private company didn’t do anything to restart the plant.

This biomass fuel-based plant built by the erstwhile Punjab State Electricity Board was commissioned in June 1992. The plant remained operational till July 1995 after which it was given on lease to M/s Jalkheri Power Plant Ltd (JPPL) in July 2001. The plant was commissioned in July 2002 and operational till September 2007. In 2012, efforts were made to restart the project by giving a licence to a private developer to run it for a specific period by giving it on lease. Even then no response was received.

In 2018, the plant was re-tendered to be leased out. On December 27, 2018, during reverse auction (RA), a tariff rate of 5.84/unit was quoted by one of the participant bidders. According to the Punjab State Electricity Regulatory Commission, however, generic tariff for biomass power projects (RE technologies) for FY 2018-19 is 8.25 to 8.36 per unit for the projects that are tendered by Punjab Energy Development Agency (PEDA). The PSPCL had projected a saving for 13 crore per annum.

Project was to be operational in March 2021

According to the tender, the project was to be operational in 27 months from the date of signing the lease. However, not a single work was initiated to renovate the plant. “We have written to the company repeatedly to comply with the provisions of the tender and start the plant. However, no investment was made to restart it. We have now started penal proceedings,” said a PSPCL official.

“Once the Jalkheri power plant becomes operational, not only 80,000MT per annum of rice straw shall be consumed for producing electricity, but this will also help in meeting renewable purchase obligations (RPO) requirements of the PSPCL. But now the PSPCL’s plans are shattered,” said the official, requesting anonymity.

He said that the company is citing Covid-19 related force majeure (unforeseeable circumstances that prevent from fulfilling the contract) for not initiating the process, but the fact is that it is unviable to run the project at 5.84 unit. He said that the company roped was running two similar projects at 8.36 per unit and both started after this tender process.

Penal proceedings against private firm

PEDA has twice floated tenders for 150-MW biomass projects, but no one came forward to install such plants over tariff-related issues.

When contacted, PSPCL CMD A Venu Prasad said that he is seized of the matter. “We will take strict action against the company as it didn’t commence work and time has lapsed. They are citing force majeure, but it is not the case. I have asked officials to start penal proceedings and similarly to restart the process to re-allocate it,” he said.

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Wednesday, December 08, 2021