CO-GENERATION POWER PROJECTS :

Combined generation of heat and power in industry is termed as co-generation. The fuel for generating steam and power in sugar mill, bagase is available as a by product of sugar production. Normally, bagasse is used to generate captive steam and power during off season making the sugar industry self sustaining where energy (steam and electricity) needs are concerned.

State of Punjab has an established industrial base, which is expanding. The Sugar, paper, fertilizer chemical, textile and other industries are having an estimated co-generation potential of 500 MW. Adoption of co-generation by these industrial units/undertakings would not only augment the state grid   capacity but would also create conducive conditions for providing employment generation, utilisation of clean environment friendly resources.  This total potential would be exploited by the year 2012.

Bagasse / Biomass co-generation in sugar mills and industry has the following inherent advantages over thermal power generation :

• It is environmentally friendly because of relatively lower CO2 and particulate emissions

• It displaces fossil fuels such as coal

• It is a decentralised, load based means of generation, because it is produced and consumed locally, losses associated with transmission and distribution are reduced

• It offers employment opportunities to locals

• It has a low gestation period and low capital investment

• It helps in local revenue generation and upliftment of the rural population

• It is an established and commercially viable technology option.

• A bagasse based co-generation project of 12MW will reduce emission at least 511960 tones of CO2 eg for a crediting period of 10 years i.e. 51196 tones of CO2 per annum. This will provide additional revenue stream.

PEDA has facilitated co-generation projects in the assisted sector. Many other co-generation projects are in the pipeline which shall be commissioned in the near future.

It is planned to achieve a target of 500MW through co-generation in the next three years. The State govt. has formulated a New and Renewable Sources of Energy Policy (NRSE Policy) in 2006. Cogeneration projects of 67 Bar pressure and above with the qualifying criteria i.e. for the co-generation facility to qualify under topping cycle mode, the sum of useful power output and one half the useful thermal output be greater than 45% of the facility’s energy consumption, shall only be eligible for consideration under this policy. 

The govt. has offered following financial and fiscal incentives for co-generation projects as under : To promote manufacturing and sale of NRSE devices/ systems, and equipments/ machinery required for NRSE Power Projects, Value Added Tax (VAT) shall be levied @ 4%.

1. Octroi : on energy generation and NRSE devices/ equipment/ machinery for NRSE Power Projects shall be exempted. 

2. Wheeling: The PSEB/LICENSEES will undertake to transmit through its grid the power generated from NRSE projects set up inside or outside the State and make it available to the producer for captive use in the same company units located in the state or third party sale within the State at a uniform wheeling charge of 2% of the energy fed to the grid, irrespective of the distance from the generating station.

3. Sale of power : Baggasse/ Biomass Cogeneration Projects- Rs. 3.49 per unit (Base Year 2006-07) with five annual escalations @ 3% upto 2011-2012.

4. Banking: The banking facility for the power generated shall be allowed for a period of one year by the PSEB/ Licensees.

5. Exemption from Electricity duty: 

a)  The Power Generation from NRSE projects shall be exempted from levy of Electricity Duty.

b) PSEB/ Licensees will accept the injection of energy in full during sustained high frequency hours to ensure full utilization of non-conventional energy resources. 

c) PSEB/ Licensees will provide facility of irrevocable and revolving, Letter of Credit issued by any nationalized bank. The amount of the Letter of Credit shall be equal to the bill amount of one month on the basis of average of last three months.  All expenditures on Letter of Credit shall be borne by the power producers. These co-generation projects are economically & financially viable having a break even period of less than 5 years and good IRR or 16-18%.

Co-generation Power Projects:

Cogeneration Projects Completed and Commissioned in the state : (280.85 MW)

CO-GENERATION POWER PROJECTS UNDER IMPLEMENTATION