IBA bats for concessional electricity tariff for CBG plants

The Indian Biogas Association (IBA) has called on the Central Government to offer concessional electricity tariffs for compressed biogas (CBG) plants to enhance the sector’s viability and accelerating India’s clean energy transition.

In a detailed representation to the Ministry of Petroleum and Natural Gas, IBA highlighted that electricity costs constitute a major component of operational expenditure (OPEX) for CBG facilities—averaging 30% and ranging between 20% and 48% depending on the feedstock and plant size.

IBA held that high industrial power tariffs, currently around ₹7 per kWh, are particularly burdensome for commercial-scale plants.

IBA’s cost analysis reveals that electricity accounts for 48% of OPEX in Municipal Solid Waste (MSW)-based plants. Similarly, its 34% in paddy straw-based plants, 28% in press mud-based plants and 19% in cow dung-based facilities.

To ease this burden, the association has proposed a shift from the prevailing industrial electricity rates to subsidized domestic tariffs (₹4.5 per kWh). IBA says that this tariff rationalization could make CBG projects significantly more cost-effective and operationally sustainable across various feedstock categories.

Gaurav Kedia, Chairman of IBA, stated, “The CBG industry is a keystone in achieving India’s Panchamrit commitments announced at COP26. By easing the cost burden of electricity for CBG plants, we can drive our 50 per cent non-fossil energy transition by 2030 and underpin our Net Zero emissions goal by 2070. With one such policy measure, we can reverse the economics of clean energy manufacturing and bring much-needed private capital to scale the sector across the country.”

IBA warned that the prevailing industrial electricity rates act as a structural barrier to growth, particularly during the critical early stages of plant operations. These high costs impact profit margins, restrict cash flows, discourage new entrants and limit the expansion of existing players.

The association also noted that concessional electricity tariffs would not only improve the competitiveness of CBG projects but also catalyze private sector participation and facilitate deeper integration of biogas into India’s evolving energy landscape.

Recently, IBA also advocated for the mandatory offtake of manure from CBG plants and raising the biogas price to improve the earnings of the projects and give necessary fillip to the sector.