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CERC TARIFF REGULATIONS FOR RENEWABLE ENERGY PROJECTS

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, biomass power, non-fossil fuel based cogeneration, Solar PV, solar Thermal subject to fulfillment of certain eligibility criteria.

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. • Non Fossil fuel Co-generation : Power generation and utilization of thermal heat for other industrial activities.Eligibility Criteria • Wind Power: . • Solar PV & Thermal : Based on technology approved by MNRE.Capacity ≤ 25 MW at single location • Biomass: .Fossil fuel restricted to 15% of total fuel consumption on annual basis.Annual mean wind power density ≥ 200 W/m2 • Small hydro: .Plants based on Rankine Cycle technology. 3 .

4 . • 3 years (first year upto 31.2010) • Benchmark capital cost for Solar PV and Solar Thermal Projects may be reviewed annually.03.Control Period or Review Period • Control period = Period during which norms remains valid.

non-fossil fuel cogeneration shall have two componentFixed Cost and fuel cost. 5 .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.

• Levellisation shall be carried out for the ‘useful life’ while tariff shall be specified for ‘Tariff Period’. 6 . • Discount factor shall be equivalent to weighted average cost of capital.Tariff Design • Generic Tariff shall be on Levelised basis for the tariff period.

Tariff Period and Useful Life Tariff Period Wind energy Solar PV/Thermal Small Hydro ≥ 5 MW Small Hydro < 5 MW Biomass (+) non-fossil fuel cogeneration Useful Life 25 25 35 35 20 7 13 25 13 35 13 .

8 .Dispatch Principles • All RE Power except biomass plants with capacity of 10 MW and above and 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.

Financial Principles Capital Cost  Plant & machinery. • For project specific tariff determination.  Civil work  Erection & Commissioning  Financing. 9 . IDC  Evacuation infrastructure upto interconnection point. breakup of capital cost to be submitted to Commission.

For generic tariff: 70:30 . : Pre tax 19% : Pre tax 24% 10 . .Equity > 30% of capital cost. excess equity shall be treated as normative loan. 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.Equity < 30% of capital cost. actual equity shall be considered for tariff. Depreciation: first 10 years 11th year onwards ROE: first 10 years 11th year onwards : 7% : Spread over remaining useful life.Financial Principles Debt:Equity .

Maintenance Spares :15% of O&M • IWC shall be average of SBI ST PLR during previous year plus 100 basis point.Receivables : 2 months . .Financial Principles Interest on Working Capital(IWC): • Wind Energy/Small Hydro/Solar PV/SolarThermal.O&M : 1 month . 11 .Maintenance Spares :15% of O&M • Biomass/ Non-fossil fuel cogeneration -Fuel Cost :4 months -O&M :1 month -Receivables : 2 months .

shall be taken into consideration for tariff determination.Financial Principles O&M: First year of Control Period: As specified under Regulations. including accelerated depreciation benefit if availed by the company. Taxes & Duties: Allowed as pass through on actual incurred basis.72% per annum. 12 . Subsidy or incentive by the Central / State Government: Any incentive or subsidy offered by the Central or State Government. Subsequent year to be escalated @ 5.

13 . • Solar PV and Solar Thermal (if opted for project specific tariff). • Hybrid Solar Thermal.Project Specific Tariff • MSW • RE Projects commissioned before notification. • Biomass projects other than Rankine cycle.

Sharing of CDM Benefits Year First Year Second Year Project Developer Beneficiaries 100 % 90 % 0% 10 % Third Year Fourth Year Fifth Year Sixth Year onwards 80% 70% 60% 50% 20% 30% 40% 50% 14 .

492. 525. 669.CAPITAL COST (FY 2011-12) • Wind Energy: • Small Hydro: Rs.97 lakh/MW < 5 MW Rs. 602. 421.16 lakh/MW for 5 MW to 25 MW.1442 Lakh/MW. Rs. 1500 lakh/MW • The above capital cost shall be subject to specific indexation mechanism for three years. Uttarakhand.42 lakh/MW < 5 MW. NE States: Rs.52 Lakhs/MW HP. Rs. 426. Rs. 15 .30 Lakh/MW.48 lakh/MW for 5 MW to 25 MW Other States: • Biomass Plant: • Non-fossil fuel cogeneration: • Solar PV Plant: • Solar Thermal : Rs. 478. Rs.03 lakhs/MW Rs.

41 Lakh/MW for 5 MW to 25 MW.00 lakhs/MW < 5 MW Rs. 16. 13. NE States: Rs.53 lakh/MW Biomass: Rs. 19. 22. 14.26 lakh/MW HP.92 lakh/MW 16 . Solar Thermal : Rs 14.77 lakh/MW for 5 MW to 25 MW.63 Lakh/MW Non-fossil Cogeneration: Rs. Solar PV Project:Rs. Other States: • • • • Rs. 7. Uttarakhand. • • Wind Energy : Small Hydro: Rs.47 lakh/MW < 5MW Rs. 23.O&M Expenses (FY 2011-12) Normative O&M expenses during First year. 10.06 lakh/MW.

Auxiliary Power Consumption (APC) • • • • • • Wind SHP Biomass Solar Thermal Solar PV Non-Fossil Fuel Co-generation : Nil : 1% : 10% : 10% : Nil : 8.5% 17 .

80 % 18 .23% .20 % .19% .23 % .30% .Capacity Utilization Factor (CUF) • Wind: 200-250 W/m2 250-300 W/m2 300-400 W/m2 >400 W/m2 .NE States Other States PV Thermal During Stabilization .UK.45% • SHP : • Solar: • Biomass: HP.30 % .70% .27 % .60% During Remaining Period (I Yr ) From II Yr .

NE.49 3.22 4.52 Biomass Energy (calculation for MP) . NE. hills >5 MW other state 5-25 MW other state 20% 23% 27% 30% 23% 19% 5.04 15.33 4.84 3.Calculated Tariff Technology CUF Levelised Tariff(CERC) Wind Energy 200-250 W/m2 250-300 W/m2 300-400 W/m2 >400 W/m2 Solar Thermal Energy Solar PV Energy Small Hydro Energy >5 MW HP.39 45% 45% 30% 30% 1st Year 65%.63 3.55 15.78 3. 2nd year 80% 3.44 3. 5-25 MW HP. hills.95 3.

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