Cogeneration in Sugar Mills

  Aug 01, 2020

Cogeneration in Sugar Mills

The Ministry of New and Renewable Energy released a scheme to support the promotion of biomass based cogeneration in sugar mills, and other industries.

What is cogeneration?

Cogeneration means generating both electricity and useful heat at the same time, therefore utilising the available energy in more than one form. 

What is the duration and financial outlay for the policy?

The total central financial assistance towards the scheme will be Rs 170 crore for the period 2017-18 to 2019-20.

What does the policy envisages?

The programme will provide central assistance for projects utilising biomass such as bagasse, agro-based industrial residue, crop residue, weeds, and wood waste produced in industrial operations.

Who are eligible for the scheme?

 Municipal solid waste is not covered under the scheme. Firms eligible for financial support under the scheme include registered companies, partnership firms, cooperatives, and public sector companies. To avail such financial support, the applicant must have availed a term loan (for the eligible project) from any financial institution like public or private sector banks, central or state cooperative banks, or a non-banking financial company.

In what form the financial assistance shall be given by central govt.?

Central assistance under the scheme will be Rs 25 lakh/MW for bagasse cogeneration projects, and Rs 50 lakh/MW for non-bagasse cogeneration projects. The assistance will be released to the term loan account to reduce the loan component of the promoter.

What is the project timeline to avail the assistance?

Promoters will have to complete the project within 24 months (with a six-month extension) from the date of sanction of the central assistance. If the project is not completed within the stipulated time, the central assistance will be cancelled.