Biomass Energy in India: Policies and Prospects

Despite rapid growth of commercial energy, biomass remains principle energy source in rural and traditional sectors and contributes a third of India's energy. Technologies like biogas and improved cook-stoves exist in India since half a century. The national biomass policy however has a two decades of history, emanating with the rural energy policies. In midseventies decade, a rural energy crisis manifested as a fallout of high oil price, population growth and depletion of wood fuel resources. Import of oil was resorted to as a short-term supply-side solution. But this was unviable in the long run. India's oil imports rose rapidly in 1970s, rising from 8% of total imports in 1970 to 24% in 1975 and 46% in 1980. High oil imports led to growing trade deficit and balance of payment crisis. At household level, a vast section of rural poor had little disposable income to spend on commercial fuels. Policy makers perceived biomass as an energy alternative that could alleviate the crisis. The biomass strategy was multi-pronged. It focused on improving efficiency of traditional technologies, enhancing supply of biomass, introducing modern biomass technologies to provide reliable energy services at competitive prices and establishing institutional support. The DNES, established in 1982, implemented the programme for biogas and improved cookstoves with moderate success. The programmes such as fuel-wood plantation and biomass based electricity generation have begun recently. There is a growing experience of managing biomass projects. Despite some successes, the overall impact of biomass programmes on the Indian energy scene is marginal. The policy perspective was too narrow and supply dominated. Biomass programmes were confined to traditional applications. Market was given little role in energy supply as well as conversion. Lately, under the economic reforms, the market oriented policies are given a greater role. The upgradation of DNES to MNES in 1992, has accorded a higher status to renewable energy technology programmes. The new policies aim to promote modernization and commercialization of biomass production, combustion, densification, and electricity generation. The ninth five year plan proposes a higher support to biomass energy. A longterm techno-economic analysis using the MARKAL model shows that biomass electricity technologies have significant potential to penetrate Indian market under a fair competition with the fossil technologies. Under an optimal greenhouse gas mitigation regime, biomass electricity penetration can reach 35 gigawatt in 2035. It is too premature to judge the effectiveness of these policies. Myriad economic, social, technological and institutional barriers remain to be overcome. The future prospects of biomass technologies depend considerably on removing these barriers. The key issue before the Indian policy makers is to develop the market for biomass energy services by ensuring reliable and enhanced biomass supply, removing the tariff distortions favouring fossil fuels and producing energy services reliably with modern biomass technologies at competitive cost.