Biomass is typically an agriculture waste with no intrinsic value. However, the logistics involved in its collection and transportation involves costs and defines its price.

The company has a two-fold strategy. One, to obtain long term commitment from the local communities for supply of biomass to the road head and subsequent transportation to the plant and two, to stabilize at a mutually beneficial procurement rates of biomass for the power plant operations. A suitable mix of the two objectives is essential to allow the development of a biomass procurement mechanism, which is balanced, for operations on a sustained basis. This would serve both purposes of sourcing suitable raw material and also generating rural employment. We hope to source majority part of our bio-fuel from pine needle with would provide extensive employment to far flung communities.

Based on prior experience in other regions of India the following picture emerges:

Typically, communities would prefer to deliver the fuel at the factory gate as they feel they would get a fair deal at factory gate in terms of weighment and also payment.

Communities would be willing to store fuel at their end. Company may have to devise an incentive scheme for the same-price preference and also extending advance against future committed supplies.

There is a preference for a transparent biomass procurement and management system, which they can also comprehend.

Broadly the biomass strategy is proposed as follows:

The biomass is proposed to be collected directly from the communities without involvement of any non-government middlemen.

Develop & maintain a strong personal bonding, mutual trust and partnership with the communities.

The farmers would be involved in the effective collection, storage and transportation of the biomass.

The company shall motivate the farmers by providing them a regular source of income by entering into long term arrangements for supply of biomass.