Home >Politics >Policy >Govt plans to spend Rs10,000 crore during FY18-22 on integrated bio energy mission

New Delhi: The central government on Tuesday proposed an integrated bio energy mission which will focus on progressive blending and substitution of fossil fuels like petrol and diesel with greener fuels like bioethanol and biodiesel.

The Union ministry of new and renewable energy (MNRE), which made the proposal, also recommended spending 10,000 crore from 2017-18 to 2021-22 for initiatives in this field. It will also approach the finance ministry to request that the biofuels sector gets benefits such as customs and excise duty exemptions and tax holidays, currently available to other renewable energy sectors.

The renewable energy ministry also unveiled a draft of the National Wind-Solar Hybrid Policy, which aims to encourage new technologies involving combined operation of wind and solar plants.

The ministry has sought comments on the draft policy from all stakeholders by 30 June. The draft policy aims to achieve 10 gigawatts (GW) of wind-solar hybrid capacity by 2022.

The need for a wind-solar hybrid policy was felt because, the draft policy said, “studies revealed that solar and wind are almost complementary to each other and hybridization of two technologies would help in minimizing the variability apart from optimally utilizing the infrastructure including land and transmission system".

“Superimposition of wind and solar resource maps shows that there are large areas where both wind and solar have high to moderate potential. Existing wind farms have scope of adding solar PV capacity and similarly, there may be wind potential in the vicinity of existing solar PV plant... Suitable policy interventions are required not only for new wind-solar hybrid plants but also for encouraging hybridization of existing wind and solar plants," the draft policy added.

Since coming to power in May 2014, Prime Minister Narendra Modi-led National Democratic Alliance government has repeatedly pushed for greater use of renewable power to reduce India’s dependence on fossil fuels.

As per India’s Intended Nationally Determined Contribution (INDC) submitted to United Nations in the run-up to the December 2015 Paris Climate Summit, India aims to have 350GW of installed capacity from renewable power by 2030 and 175GW by 2022. India crossed 26.8GW of wind and 7.6GW of solar power installed capacity in May 2016.

According to MNRE joint secretary Varsha Joshi, the draft renewable energy legislation places particular emphasis on non-electrical energy sources, primarily all bio-energy sources, which were not currently covered under any legislation.

According to the ministry, the integrated bio-energy mission will aim to help achieve greenhouse gas emission reduction targets as agreed in the INDCs through “the progressive blending/substitution of fossil fuels such as coal, petrol, diesel, natural gas and LPG (liquefied petroleum gas) with biomass pellets, bio-ethanol, biodiesel, bio-methane, and similar green fuels, both for electrical and non-electrical uses".

At a meeting of industry executives and government officials on 27 April, MNRE secretary Upendra Tripathy had sought “immediately actionable recommendations" which could be taken up as the first components of the integrated bio-energy mission. Tripathy had also directed that the National Institute of Bio-Energy at Kapurthala in Punjab be upgraded and developed into a world-class institution to support the mission.

Biodiesel and bioethanol manufacturers who attended the meeting, however, had raised concerns over the uneven taxation regime of these fuels across states.

“It was decided to request all the states, in writing, to create a rational and uniform taxation structure to support the growth of this sector. It was also decided to request the Ministry of Finance, Government of India, to extend all benefits available to other renewable sectors such as customs and excise exemptions, tax holiday to the biofuels sector," said the minutes of the 27 April meeting reviewed by Mint.

The ministry has also decided to undertake a study to determine the appropriate mechanism for collection and monitoring of used cooking oil from commercial establishments in major cities for use as raw material for biodiesel plants.

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