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Madhya Pradesh
Madhya Pradesh biomass based electricity (power) project implementation policy 2011

Date of issue

12 October 2011 (amended on 21 February 2013)

Title of policy document

Madhya Pradesh Biomass Based Electricity (Power) Project Implementation Policy, 2011

Nodal agency

New and Renewable Energy Department, Madhya Pradesh

Capacity target and period


Offtake arrangement

Power Purchase Agreement (PPA)


Use for captive

Yes. The Industrial units which install biomass power plant or purchase power generated from biomass shall be provided the facility of reduction in contract demand.

Sale to third party

Sale to a discom

Grid interfacing

Biomass Power Producer (BPP)

The developer shall arrange separately for ability based tariff (ABT) metering on his/her expense, for which suitable meters and metering equipment shall be installed at the injection and drawal points as per provisions mentioned in Clause 16 of the “Terms and Conditions of Intra State Open Access in Madhya Pradesh Regulations, 2005” issued by the Madhya Pradesh Electricity Regulatory Commission (MPERC).

The developer shall have to follow the transmission metering code (Part 5, Section 16) of MPERC and related regulations issued by the Central Electricity Authority (CEA) for setting up and operation of meters.

Wheeling charges

As per the wheeling charges determined by MPERC, BPP shall be provided wheeling facilities by the Madhya Pradesh Power Transmission Company.

4% subsidy shall be provided by the State Government on wheeling charges for 10 years from the commercial date of operation (COD) of the project. The balance amount of wheeling charges after subsidy shall be borne by the project developer.

Registration of projects

  • The projects registered and approved under Energy Policy 2006 shall be migrated in this

  • Following documents are required to be submitted to the New and Renewable Energy
        Department, Madhya Pradesh
  • a.    Application in prescribed format before registration
    b.   Memorandum of the articles of association of the company
    c.    Certified copy of partnership deed
    d.    Balance sheets for the last three years
    e.    Pre-feasibility report

  • If the project is found eligible, a non-refundable registration fee of Rs1.00 lakh per MW shall
        be deposited by the selected applicant within 15 days from notification.

  • Within three months of registration, following documents shall be provided
  • a.   Detailed project report
    b.   Biomass assessment report
    c.    Land-related documents
    d.   Programme Evaluation Review Technique (PERT) chart
    e.   Water allocation order
    f.    In-principle consent of grid connectivity for power evacuation from local electricity
          transmission or distribution company
    g.   Performance guarantee as mentioned in the section below
    h.  Certificate from Divisional Forest Officer verifying that the plant is at a minimum
         distance of 2 kilometres from the range of nearest protected/reserved forest
    i.    If the project is located in urban or rural area, then No Objection Certificate (NOC) of
          the concerned municipal body or gram panchayat

    Time schedule and penalty provisions

    Delays in activities

    The time limit may be extended in two blocks of two months each.

    Performance guarantee

    1% of the total project cost shall be deposited in two instalments

  • The first instalment shall comprise a guarantee amount of Rs 1.00 lakh/MW and shall be
       paid within one month of project allotment.

  • The second instalment (remaining amount) shall be paid at the time of submission of the
        Detailed Project Report (DPR).

  • This performance guarantee is valid for 30 months.

  • The guaranteed amount shall be released in instalments on completion of each stipulated
        benchmark as shown below.

  • S. No.


    Time limit

    Release of performance guarantee


    Date of issuance of administrative approval

    0 day



    Land ownership/ possession/diversion information

    3 months



    Allotment –

  • Consent of pollution control board for project installation

  • Power purchasing agreement/ Power sale arrangements

  • Financial closure

  • 8 months



    Appointment of Erection, Procurement and Commissioning (EPC) contractor

    10 months



    Certificate of 50% completion of physical and financial progress of the total project

    18 months




  • Commercial operation date (COD)
  • 24 months


    Incentives by State Government

    Electricity duty

    Exempted from electricity duty and cess for 10 years from COD

    Industrial grant


    Land allotment

  • The allotment of Government revenue land and the permission to use the land shall be
        governed by the terms and conditions laid down in circular No. F-16-14/2013/Seven/Gov.2A
       dated 30 May 2013, issued by the Revenue Department of the Government of Madhya Pradesh .

  • A maximum of 2 acres of land per MW may be used for establishing biomass based power
       generating plants.

  • For the use of forest land, permission needs to be obtained under the Forest Conservation
       Act, 1980 through the competent authority of Forest Department.

  • In case of private land, the BPP shall be eligible for 50% exemption on stamp duty.
  • Water availability

    The developer shall be permitted to use water at the prevailing rates charged by the Narmada Valley Development Authority or the Water Resources Department or at the rates determined by the State Government.

    Other promotional schemes

  • Use of non-forest wastelands for biomass production

  • The maximum area of land for the project shall be 100 acres per MW for a maximum of
        5 MW

  • If the project is based solely on biomass, additional 50 acres per MW shall be made
       available for biomass production

  • The state owned power trading company shall have the first right to buy the electricity
       generated from these projects

  • Clean Development Mechanism (CDM) benefits as per the guidelines of MPERC may
        be availed of

  • Contact details

    New and Renewable Energy Department
    Main Road No. 2, Urja Bhawan, Near 5 No. Bus Stop
    Shivaji Nagar, Bhopal 462 016
    Tel: 0755 255 1438
    Fax: 0755 255 3122


    Policy document


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    Last updated on: May 20, 2016