Harnessing Paddy Residue for Power Generation: A Profitable Agribusiness Opportunity in Punjab

Utilizing crop residues as feedstock for bioenergy supports Sustainable Development Goal (SDG) 7 by advancing clean energy, while also contributing to SDG 1 through enhanced farmer incomes and improved household food and nutritional security. Punjab, a major agricultural state, produces substantial biomass in the form of crop residues, particularly paddy straw. Of the nearly 500 lakh MT generated annually, only 97.5 MW of bioenergy capacity is currently harnessed through 11 operational plants, utilizing just 6% (8.76 lakh MT) of the available surplus biomass. This study evaluates the economics of the paddy residue supply chain and identifies key challenges in scaling biomass-based power generation in the state. Primary data from 90 farmers and 15 residue collectors in the vicinity of three operational plants indicate that paddy straw baling for power generation is financially viable. The activity yields net returns of Rs. 644.23 per acre, with a benefit-cost ratio of 2.36 , a payback period of 2.59 years, and a breakeven level of 3,727.65 acres. The findings highlight the need for a comprehensive approach encompassing technological investments, robust supply chain infrastructure, financial incentives, awareness generation, and supportive policy frameworks. Strengthening these areas can enable sustainable, socially acceptable, and economically viable ex-situ crop residue management, promoting greater biomass utilization and contributing to a greener future.