Kolkata, March 23 (IANS): The country's 550 odd sugar mills can produce at least 2,500 MW of electricity if they install high-power boilers which will involve an investment of Rs.150 crore for each mill, an industry official said here on Monday.

"The sugar mills can produce 2,500-3,000 MW of power from bagasse (a sugarcane byproduct) if they install 120 kg (capacity) high-pressure boilers," former president of Indian Sugar Mills Association (ISMA) O.P. Dhanuka told IANS.

He said now around 100 sugar mills have installed 33 kg capacity boilers to produce power.

Uttar Pradesh is leading on this front with 37 mills producing electricity followed by Maharashtra, Chhattisgarh and Bihar.

"Most of the energy generated from the 33-kg capacity boilers is consumed locally by the mills to run their operations," he said.

According to Dhanuka, who has himself implemented the project of extracting power from bagasse, each of the mills is producing about 25 MW of power. Of this, 10 MW is consumed to run mill operations and 15 MW is supplied to power companies.

"15 MW of electricity per mill is estimated to be in surplus category which can be sold," he said.

Dhanuka said state governments need to come forward to help sugar mills become "power generating houses" by providing tax holidays and other incentives.

"Already state governments are promoting the use of bagasse and buying the electricity produced. Clearance is easy to get as this process to extract electricity from the sugar byproduct is eco-friendly and saves the nation's coal reserves," he said.