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Bagasse when burned in quantity produces sufficient heat energy to supply all the needs of a typical sugar mill, with enough energy to spare. To this end, a secondary use for this waste product is in cogeneration, the use of a fuel source to provide both heat energy, used in the mill and the electricity which is typically sold on to the consumer through power grids.

The power produced through co-generation substitutes the conventional thermal alternative and reduces greenhouse gas emissions. In India, interest in high-efficiency bagasse based cogeneration started in the 1980s when electricity supply started falling short of demand. High-efficiency bagasse cogeneration was perceived as an attractive technology both in terms of its potential to produce carbon neutral electricity as well as its economic benefits to the sugar sector. In the present scenario, where fossil fuel prices are shooting up and there is a shortage and non-availability of coal, co-generation appears to be a promising development. The thrust on distributed generation and increasing awareness for cutting greenhouse gas emissions increases the need for cogeneration. Also it helps in controlling pollution from fossil fuels. The Company's current aggregate power generation capacity stands at 22 MW - of which, 6 MW is surplus and free for export to state utilities.