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The power produced by co-generation
is used in internal industry processes, and excess power is sold to
State Utilities/ Distribution Companies. Long-term Power Purchase
Agreements (PPAs) are signed with these buyers based on terms and
conditions as decided by the State Electricity Regulatory Commissions
(SERCs).
Co-generation of power by sugar mills in India began in the year
1993-1994 with the Ministry of Non-conventional Energy Sources (MNES)
formulating its guidelines for fixation of the rate of power produced
from non-conventional sources including by the sugar mills and supplied
to the Electricity Boards. With a small beginning by 8 sugar mills
generating 50 MW power, today, 48 units have set up their co-generation
plants generating 680.0 MW power. According to information currently
available, an equal number are in the process of putting up power plants
to produce another 700 MW, taking the total generation to about 1400.0
MW (Source: ISMA Website accessed on May 16, 2005). The assessed
potential for power by sugar co-generation is more than 5000 MW for
India (Source: The Energy Research Institute).
One of the objectives of the National Electricity Policy issued by the
Government is to promote co-generation and generation from renewable
sources of energy. The urgent need to promote generation of power from
such sources of energy, and the significant potential for co-generation
in the sugar industry is well observed. There has been appreciable
growth in this segment and this trend can be expected to continue in
future as well because of growing demand for power in the country.
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