India : CERC Prepares Blueprint for New Tariff Regulations for Renewable Projects

The Central Electricity Regulatory Commission (CERC) has come out with the draft tariff regulations 2020, which will come in force from July 01, 2020, and will remain in force until March 31, 2023.

These regulations will apply to the wind, small hydro, biomass with Rankine cycle technology, and non-fossil fuel-based co-generation projects. These regulations will also apply to solar, floating solar, solar thermal, renewable hybrid energy projects, renewable with storage projects, biogas, municipal solid waste based power projects, and refuse-derived fuel-based power projects. The Commission has fixed 25 years as a useful life for wind power projects, 25 years for solar, floating, and solar thermal projects, and 20 years for biogas-based power projects. 

The CERC has established a debt-equity ratio of 70:30 to determine a generic tariff. For a project-specific tariff, the Commission has proposed that if the equity deployed is more than 30% of the capital cost; it will be treated as a normal loan. For tariff determination, loan tenure of 15 years will be considered.

The Commission has also added that the depreciation rate of 4.67% per annum will be considered for the first 15 years, and remaining depreciation will be evenly spread during the remaining useful life of the project. As per the regulations, a late payment surcharge at the rate of 1.50% per month will be levied by the generating company if the payment is delayed beyond a period of 45 days from the date of the presentation of bills.

Source : https://mercomindia.com/cerc-prepares-blueprint-new-tariff-regulations-renewable-projects/

Smart Grid Bulletin April 2020


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