Introduction to the Sugar Industry
Sugar is one of the oldest commodities in the world and traces its origin to 4th century AD in India and China. In those days sugar was manufactured from sugarcane. But both countries lost their early initiative to the European, American and Oceanic countries, as the eighteenth century witnessed the development of new technology to manufacture sugar from sugar beet. However, India and Brazil are dominant players in the global sugar industry along with Brazil. Given the growing sugar production and the structural changes witnessed in the Indian sugar industry, India is all set continue its domination at a global level.
In comparison with the rest of the world, the Indian sugar industry is in a better position regarding raw material availability, crushing period, size of sugar mills, production cost and prices. The major advantage that Indian sugar mills have over others is lower production costs. There are many by-products in the sugar industry. The major one is bagasse which is used for co-generation of power.
Sugar is one of the industries that comes under the REC scheme. Sugar factories can set up power plants with a specific generation capacity based on the availability of bagasse per day. The availability of bagasse, therefore generation, is for the sugarcane season only, between November to March. For the rest of the year, the industry is closed and the power is imported from the utility to meet the internal requirement.
With the generation of power from bagasse, the industry gets cheaper power for sugar production, earns by exporting additional power, and can earn RECs which can be traded adding to the financial benefit to the sugar industry. Besides this, there are options like banking of energy produced which allow the factory to use cheaper energy during the off-season.
The conditions necessary for acquiring a REC certificate are:
- Submit a daily consumption report to SDLC
- Submission of a daily fuel usage report to SLDC every month.
- Monthly joint meter reading (JMR) through MRI (a hand-held unit) by the utility and industry.
- Energy injection report comprising total monthly generation and consumption (excluding auxiliary consumption). This report too needs to be submitted to SLDC