Tariff Regulation for Renewable Energy Sourceswith Bar 18.10.2010

8/13/2019 Tariff Regulation for Renewable Energy Sourceswith Bar 18.10.2010

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CERC

TARIFF REGULATIONS

FOR

RENEWABLE ENERGY PROJECTS


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Scope

These Regulations shall apply for tariff of Renewable

Sources of Energy to be determined by Commission u/s

62 and 79 of EA,2003.

These Regulations shall apply in case of wind power,

small hydro, biomasspower, non-fossil fuelbased co-

generation, Solar PV, solar Thermal subject to

fulfillment of certain eligibility criteria.


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Eligibility Criteria

Wind Power: - Annual mean wind power density 200 W/m2

Small hydro: - Capacity 25 MW at single location

Biomass: - Plants based on Rankine Cycle technology.

- Fossil fuel restricted to 15% of total fuel

consumption on annual basis.Solar PV

& Thermal : Based on technology approved by MNRE.

Non Fossil fuel

Co-generation: Power generation and utilization of thermal heat

for other industrial activities.


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Control Period or Review Period

Control period = Period during which norms remains

valid.

3 years (first year upto 31.03.2010)

Benchmark capital cost for Solar PV and Solar Thermal

Projects may be reviewed annually.


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Tariff Structure

-Single Part Tariff

-Fixed Cost Component: ROE

Interest on term loan

Depreciation Interest on working capital

O&M Expenses

-RE Technologies having fuel component like Biomass,

non-fossil fuel cogeneration shall have two component-Fixed Cost and fuel cost.


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Tariff Design

Generic Tariff shall be on Levelised basis for the tariff

period.

Discount factor shall be equivalent to weighted averagecost of capital.

Levellisation shall be carried out for the useful life while

tariff shall be specified for Tariff Period.


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Tariff Period and Useful Life

Tariff Period Useful Life

Wind energy 13 25

Solar PV/Thermal 25 25

Small Hydro 5 MW 13 35

Small Hydro < 5 MW 35 35

Biomass (+) non-fossil

fuel cogeneration

13 20


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Dispatch Principles

All RE Power except biomass plants with capacity of 10

MW and aboveand non-fossil fuel cogeneration plants

shall be treated as MUST RUN.

Biomass plants of 10 MW and above and Non-fossil fuel

cogeneration plants shall be subjected to scheduling &

Despatch code as per IEGC and UI Regulations.


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Financial Principles

Capital CostPlant & machinery,

Civil work

Erection & Commissioning

Financing, IDC

Evacuation infrastructure upto interconnection point.

For project specific tariff determination, breakup of

capital cost to be submitted to Commission.


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Debt:Equity

- For generic tariff: 70:30- Equity > 30% of capital cost, excess equity shall be treated as normative loan.

- Equity < 30% of capital cost, actual equity shall be considered for tariff.

Loan Tenure: 10 years

Interest Rate: Normative Interest Rate shall be average of LTPLR of SBI

prevalent during the previous year plus 150 basis point.

Depreciation: first 10 years : 7%11thyear onwards : Spread over remaining useful life.

ROE: first 10 years : Pre tax 19%

11thyear onwards : Pre tax 24%


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Interest on Working Capital(IWC):

Wind Energy/Small Hydro/Solar PV/SolarThermal.

- O&M : 1 month

- Receivables : 2 months

- Maintenance Spares :15% of O&M

Biomass/ Non-fossil fuel cogeneration

-Fuel Cost :4 months

-O&M :1 month

-Receivables : 2 months

- Maintenance Spares :15% of O&M

IWC shall be average of SBI ST PLR duringprevious year plus 100 basis point.


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O&M:

First year of Control Period: As specified under Regulations. Subsequentyear to be escalated @ 5.72% per annum.

Subsidy or incentive by the Central / State Government:Any incentive or subsidy offered by the Central or State Government,

including accelerated depreciation benefit if availed by the company, shall

be taken into consideration for tariff determination.

Taxes & Duties:Allowed as pass through on actual incurred basis.


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Project Specific Tariff

MSW

RE Projects commissioned before notification.

Solar PV and Solar Thermal (if opted for project specific

tariff).

Hybrid Solar Thermal.

Biomass projects other than Rankine cycle.


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Sharing of CDM Benefits

Year ProjectDeveloper

Beneficiaries

First Year 100 % 0 %

Second Year 90 % 10 %

Third Year 80% 20%

Fourth Year 70% 30%

Fifth Year 60% 40%

Sixth Year onwards 50% 50%


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CAPITAL COST (FY 2011-12)

Wind Energy: Rs. 492.52 Lakhs/MW

Small Hydro: HP, Uttarakhand, NE States:

Rs. 669.42 lakh/MW < 5 MW.

Rs. 602.48 lakh/MW for 5 MW to 25 MW

Other States:

Rs. 525.97 lakh/MW < 5 MWRs. 478.16 lakh/MW for 5 MW to 25 MW.

Biomass Plant: Rs. 426.03 lakhs/MW

Non-fossil fuel

cogeneration: Rs. 421.30 Lakh/MW.

Solar PV Plant: Rs.1442 Lakh/MW.

Solar Thermal : Rs. 1500 lakh/MW

The above capital cost shall be subject to specific indexation

mechanism for three years.


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O&M Expenses (FY 2011-12)

Normative O&M expenses during First year.

Wind Energy : Rs. 7.26 lakh/MW

Small Hydro: HP, Uttarakhand, NE States:

Rs. 23.47 lakh/MW < 5MWRs. 16.77 lakh/MW for 5 MW to 25 MW.

Other States:

Rs. 19.00 lakhs/MW < 5 MW

Rs. 13.41 Lakh/MW for 5 MW to 25 MW.

Solar PV Project:Rs. 10.06 lakh/MW. Solar Thermal : Rs 14.53 lakh/MW

Biomass: Rs. 22.63 Lakh/MW

Non-fossil

Cogeneration: Rs. 14.92 lakh/MW


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Auxiliary Power Consumption (APC)

Wind : Nil

SHP : 1%

Biomass : 10%

Solar Thermal : 10% Solar PV : Nil

Non-Fossil Fuel

Co-generation : 8.5%


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Capacity Utilization Factor (CUF)

Wind: 200-250 W/m2 - 20 %250-300 W/m2 - 23 %

300-400 W/m2 - 27 %

>400 W/m2 - 30 %

SHP: HP,UK,NE States - 45%Other States - 30%

Solar: PV - 19%Thermal - 23%

Biomass: During Stabilization - 60%During Remaining Period (I Yr ) - 70%

From II Yr - 80 %


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Technology CUF Levelised

Tariff(CERC)

Wind Energy

200-250 W/m2

250-300 W/m2

300-400 W/m2

>400 W/m2

20%

23%

27%

30%

5.33

4.63

3.95

3.55

Solar Thermal Energy 23% 15.04

Solar PV Energy 19% 15.39

Small Hydro Energy

>5 MW HP, NE, hills,

5-25 MW HP, NE, hills

>5 MW other state

5-25 MW other state

45%

45%

30%

30%

3.78

3.22

4.49

3.84

Biomass Energy(calculation for MP) 1st Year 65%,

2nd year 80%

3.44

3.52

Calculated Tariff


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Thank You

Tariff Regulation for Renewable Energy Sourceswith Bar 18.10.2010

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