The Indian biomass industry has suffered from a number of inherent risks

1.      Non-availability of feedstock within a certain radius

2.      Cartelization of feedstock, waste and otherwise leading to price instability

3.      Unorganized market without long term supply contracts being possible

4.      Greed of farmers and developers alike

5.      Inadequate awareness of the impact on the environment due to burning

6.      Poor technology availability with efficiency rates of power plants at just 20-25% – 9000 Metric tons (equivalent to 6000 midsized cars) of biomass is required to annually generate 1MW

7.      Large scale plantation management, biomass plant technology and supply chain expertise is lacking in general

8.      Open access is restricted in a large number of states or is an onerous process, preventing third party sales

9.      Power rates are insufficient to match the increasing costs of feedstock, transportation and storage

10.  Payment issues with monopolistic State Electricity Boards

11.  Insurance doesn’t cover feedstock risk

12.  Seasonality of feedstock availability and crop failures

13.  Poor supply chain management

14.  Grid availability, tail end consumptions are limited

15.  Uncertainty of carbon credits CDMs post 2012