Clenergen Corp., biomass power developer, recently announced that it has entered into a 15-year power purchase agreement with PTC India Ltd. The agreement is through Clenergen’s wholly owned subsidiary, Clenergen India. PTC India, a public-private partnership company, is the leading provider of power trading solutions in India, and is focused on developing a commercially vibrant power market in the country.
Clenergen currently has plantations in the Tuticorin and Tirunelveli districts in southern India, totaling 4,000 acres, of which 1,200 acres are earmarked for cultivation of bamboo and 2,800 acres for paulownia, two carefully researched and chosen biomass crops. The company plans to lease a total of 16,000 acres for biomass plantations in India, supplying various power plants operating on gasification technology.
Clenergen CEO, Mark Quinn, indicated that the first of the power plants has already started operation in Tuticorin. The 1.5 megawatt facility will be expanded to about 10 megawatts within one year. The company also plans to set up a 16 megawatt plant in Tamil Nadu, and a 64 megawatt plant in Karnataka, both in southern India.
The agreement calls for PTC India to pay Clenergen a guaranteed rate for supplied power, plus 90% of whatever PTC gets over and above that guaranteed price. PTC will pay on a monthly basis, with its payments backed by an irrevocable letter of credit with Indian Overseas Bank. Clenergen expects an internal rate of return of at least 30%, over and above any benefits from carbon trading.
Clenergen will require approximately 200 acres of land, producing 40 metric tons of biomass per acre (a total of about 8,000 metric tons), for every megawatt generated. The company is working with Bangalor-based Growmore Biotech to source Beema Bamboo, a high-yielding bamboo variety developed by Growmore, with a potential yield of 60 metric tons per acre. Anything over 40 metric tons increases Clenergen’s profits.
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