The Ministry of Power vide its notification dated 2nd March 2022, has prepared a model contract for the use of biomass in thermal power plants. The policy on “Biomass Utilization for Power Generation through Co-firing in Coal based Power Plants” issued in October 2021 mandates all thermal power plants in the country to use 5 to 10% biomass along with coal for power production.
The following has been stated under the model contract:
· The scope of work under this package shall include supply, loading, transport, and delivery of material at the Power plant as per the guaranteed parameters.
· Base material for pellet manufacturing shall be agro residue which means the leftover portion of the agriculture produce such as stubble/straw/stalk/husk of those agro residues which are surplus and not being used as animal fodder such as paddy, soya, arhar, gwar, cotton, gram, jawar, bajara, moong, mustard, sesame, til, maize, sunflower, jute, coffee, etc., groundnut shell, coconut shell, castor seed shell, etc., pine needle, elephant grass, sarkanda and horticulture waste such as dry leaves and trimmings generated during the maintenance and pruning of trees and plants.
· Agro residue-based biomass pellets can be manufactured by mixing single or multiple base materials together.
· The period of contract shall be for a minimum period of seven (7) years. Further, after award, if the supplier is not able to supply the allocated quantity of pellets to Plant due to any reason attributed to Plant or reason mentioned in force majeure clause, an additional three-months grace period corresponding to each one year of supply period shall be provided to the supplier.
·The supplier shall commence delivery of material within 270 days from the issue of the Purchase Order.
· The materials shall be dispatched by road on “Freight paid” basis through supplier’s transporter.
· The Supplier shall have to commence delivery of material within 270 days from the date of issue of the Purchase Order. To facilitate initial capacity ramp up, no Liquidated Damage shall be levied for initial 120 days from the delivery start date.
