What Is The Future of the Biogas Industry in India?

. 6 min read
What Is The Future of the Biogas Industry in India?

All about the Biogas Industry

Biogas is a cheap, commonly available and renewable energy source that can be generated from organic feedstocks under anaerobic conditions. It is primarily methane and can be generated from various sources like animal manure, crops residues, municipal solid waste, etc. The disposable bio-waste in India is estimated to be around 600 million tonnes. If all of these are put into productive use, it will produce 25 times the CNG that we are using today, and replace more than 50 percent of the total fuel imports.

India is the second largest consumer of biogas in the world. As per Shri Dharmendra Pradhan, the minister for Oil and Natural Resources, India will receive an investment of Rs 2 lakh crore in setting up 5000 biogas plants, by 2023-24.

Biogas industry is really taking off in India as it has happened with solar and wind energy. The Ministry of Renewable Energy under which it falls is very bullish about it. India is becoming a favoured destination for investing in renewable energy. Between 2014 to 2020 over $ 64 billion was invested in this sector, and much of it was from foreign countries.

To formulate a biogas policy, the government is looking at it from a financial, technical and social engineering angle. To promote biogas business in India, the government is offering a lot of direct and indirect incentives like capex subsidies and tax holidays. Suppose an entrepreneur sets up one megawatt biogas plant. Then he would get ten years of tax holidays.

Based on the size, biogas plants can be divided into 3 categories:

  1. Small scale biogas plant which comes in the household and community level.
  2. Mid-size biogas plant.
  3. Industrial size.

The total number of small and mid-size plants in India is about 5 million. In the large scale biogas plants, there are about 300 megawatts of installed capacity.

Bio-Waste to Bio-Gas in India

The main animal manure for generating renewable natural gas or biogas is cattle manure. Other things which are being considered is chicken manure or poultry litter and horse dung. Biogas can be made by capturing methane from manure lagoons at dairy farms, landfills or elsewhere.

Along with that energy crops like Napier grass or elephant grass are being used. Agricultural wastes like wheat straw, rice straw and husks are being explored, because burning of rice straw by farmers causes huge pollution. Using rice straw to produce biogas might solve this problem.

The other raw materials are liquid manure, agricultural products like silage maize and agro-industrial and food wastes. Landfills and waste water treatment plants produce or handle organic wastes that can be reconverted into biogas.

How does a biogas plant work?

In biogas plants, the biomass is fermented in a controlled environment, to produce a gas that can be used to produce electrical and thermal energy. This gas has a high percentage of methane.

With the aid of a loader, the raw materials are tipped into a cement storage bin after which it is taken by a conveyor belt to a separator where it is mixed with liquid manure for fermentation.

Then the liquid mixture is heated with hot water to 270 degrees centigrade in a heat exchanger. Then the biogas is produced in the fermentation chamber. The total time taken is usually 60 days for the entire hydrogenation process to be complete.

What does biogas plant cost?

Biogas plants for dry fermentation produce renewable energy and have great growth potential globally. But when does the construction and operation of a biogas plant pay off? To find out, we have to know the cost of a biogas plant.

There are three major categories of costs:

1. Capital Costs

These comprise the depreciation and the interest rates. In calculating the depreciation, the economic life of the plant is taken as 15 years, provided that maintenance and repair work are carried out regularly.

2. Production Costs

These include all expenses which are necessary for the construction of the plant, like the cost of land, excavation work, building construction, the digester and gas manufacturing equipment, etc. It depends mainly on the land cost and the model of the plant. The total cost for a simple biogas plant excluding land comes to around $50-$75, per cubic meter capacity.

3. Running Costs

These comprises of the operations and maintenance costs like wages, collection of substrates, water, etc.

Compressed Bio-Gas (CBG)

In Compressed Bio-Gas (CBG) the percentage of methane is higher than biogas, and must constitute a minimum of 90%. It is important for the country’s economy, and will reduce the imports of petroleum. 5000 such plants are to be opened by 2023, under the Sustainable Alternative Towards Affordable Transportation (SATAT) scheme. The SATAT initiative will provide an ecosystem for production of CBG from various biomass and waste resources.

Any aspiring entrepreneur can set up a CBG plant in India, and sell it to the Oil Marketing Companies (OMCs). The Government is offering various supports to CBG plants like floor price guarantee for 10 years, priority in lending, subsidies, and help in allotment of land. The Ministry of Petroleum and Natural Gas has signed agreements with leading private sector energy companies for establishing around 900 CBG plants.

The process of generating CBG from any agricultural waste or plants like bamboo is a two step procedure.  First the waste is treated with a special bacterial solution which generates the gas. This gas is then cleaned and compressed.

CBG can be further purified and transformed into Compressed Natural Gas or, CNG, and it does not have any gaseous impurities.  CNG can be stored in cylinders and is being widely used as an alternative to fossil fuels like diesel and petrol as a fuel for transport. CBG being an environment-friendly fuel and a renewable energy source, can reduce greenhouse gas emissions by 98%.

A by-product of CBG is bio-manure which can be used as organic fertiliser to nurture the soil.

Renewable Natural Gas (RNG)

Renewable Natural Gas (RNG) is purified biogas that is an alternative to conventional natural gas, and can be used to run vehicles. It is used in place of fossil fuels in the form of CNG, or Liquified Natural Gas (LNG).

Benefits of biogas

Most of the Indian cities are facing the problems of dumping of wastes. Municipal bodies are struggling with collection and disposal of wastes. Recycling waste into biogas and using this energy helps cut carbon dioxide emissions into the atmosphere. It also eliminates food waste.

The advantage of replacing natural gas with biogas is that biogas is renewable while the supply of natural gas is limited. Biogas is piped through existing natural gas pipelines. So, the switch from natural gas to biogas is easy and cheap.

Biogas production is 100% indigenous. So, it is local and sustainable. Use of biogas will improve the air and water quality, and also create jobs.

Schools that operate canteens can shift to the environment friendly biogas. This mode of cooking is cost-efficient and also solves the problem of disposing kitchen wastes.

The petrol costs are rising and there is a shortage of CNG pumps. So, there is a good prospect for bio-CNG pumps.

Sale of Biogas

Companies like Indian Oil Corporation procure biogas and sells it at its retail outlets, as part of the government’s strategy to reduce dependence on imported fuels. It will be sold to both domestic and industrial customers.

How is biogas profitable in India?

Biogas has a number of applications:

  1. Household cooking and lighting.
  2. Production of electricity by running gensets or engines.
  3. The residues can be utilised as high quality compost to fertilise the soil.
  4. Can be used as vehicular fuels reducing the need for imports.

One 100 meter cubic per day biogas bottling plant can fill 8 cylinders of 6 kg capacity per day. In one year, such a plant can supply the energy equivalent of 17,520 litres of petrol or diesel. This amounts to around Rs 10 lakhs of fuel annually and can be sold as fuels for vehicles like auto-rickshaws, buses, and also used for running irrigation pump sets and electricity generators. With such widespread application of biogas, the cost of one enriching and bottling plant can be recovered in three years.

Due to a lot of support from the government, biogas business in India is a sunrise sector and shows a lot of prospects.

Many biomass utilisations projects in India get subsidies and show profits. The raw materials used in such plants are mostly wastes, and the major expense is only on the construction of the plant. Selling biogas can be a profitable venture for an entrepreneur who is into dairy farming with between 50 to 60 animals. The gas which is produced through anaerobic digestion can be stored in small cylinders and used as cooking fuel. In rural areas it can be a source of clean energy, reduce the reliance on firewood, and increase the income of dairy farmers.

Also read:

1) Non-biodegradable Waste: A Looming Problem For All Of Us
2) How to become Environment Friendly?
3) How do businesses affect the environment?
4) 15 Easy Ways to Become Environmentally Friendly