CERC (Terms & Conditions for Tariff Determination from Renewable Energy Sources) Regulation, 2009

11.08.2011 AK

CERC (T&C for tariff determination from renewable sources) Reg. 2009 Applicable
WPD 200 W/m2 & hub height 50 m Small Hydro Biomass Co-gen Solar PV & Solar Thermal

Provision for Project specific tariff Tariff Period

13 years Small Hydro 35 years Solar PV & Solar Thermal 25 years

CERC() Regulation 2009

Useful Life
Wind energy power project 25 years Biomass power project, non-fossil fuel co-gen 20 yr Small Hydro 35 years Solar PV/ Solar Thermal 25 years

Capital Cost Norms

Wind energy (FY 2009-10): Capital 5.15 Cr/ MW Small Hydro (FY 2009-10)
Himachal, Uttarakhand, NE States
Plant below 5 MW = 7.00 Cr/MW Plant 5 to 25 MW = 6.30 Cr/ MW

Other states
Plant below 5 MW = 5.50 Cr/MW Plant 5 to 25 MW = 5.00 Cr/ MW

Biomass based generation: Capital Cost for FY 2009-10 - 4.50 Cr /MW Non-fossil fuel based Co-generation Projects: Capital Cost for FY 2009-10 - 4.45 Cr /MW Solar PV Plant: Capital Cost for FY 2009-10 17.00 Cr /MW Solar thermal Plant: Capital Cost for FY 2009-10 13.00 Cr /MW Capital Cost for subsequent years is indexed

Tariff Determination Annual Revenue Requirement (ARR) Fixed Cost

Return on Equity 19% pre-tax for 10 years, 24% pre-tax for remaining period on equity 30% of the asset value of plant. Interest on Loan
70% of the asset value is loan Repayment period 10 years Weighted average interest rate Interest rate Long term prime lending rate of SBI in previous year + 150 basis point

Depreciation 7 % of the asset value for repayment period. remaining depreciation (i.e. 20%) spread over remaining useful life of plant. Prorata depreciation for part of the year. Interest on Working Capital Operations & Maintenance expenses (Employee Cost, Repair & Maintenance Expenses, Admin & Gen Expenses) Corporate tax at actual

Tariff Determination ARR (Cont.)

Interest on Working Capital
Wind, Small Hydro, Solar PV, Solar Thermal
O&M Expenses of 1 month Receivable for 2 months Maintenance spares of 15% of O&M

Biomass and Non-fossil Fuel (Cogeneration)

Fuel Cost of 4 months for normative PLF O&M Expenses of 1 month Receivable for 2 months of Fixed & Energy Charges for target PLF Maintenance spares of 15% of O&M

Interest rate Long term prime lending rate of SBI in previous year + 100 basis point

Tariff Determination ARR (Cont.)

O&M Expenses
Wind based energy: For year FY 2009-10 6.50 lakh/ MW & 5.72% escalation/ year thereafter Small Hydro Generation for year FY 2009-10
Plant below 5 MW for Hill States Rs. 21 lakh/ MW Plant 5 to 25 MW for Hill States Rs. 15 lakh/ MW Plant below 5 MW for other States Rs. 17 lakh/ MW Plant 5 to 25 MW for other States Rs. 12 lakh/ MW Escalation factor for control period 5.72%

Biomass based generation: For FY 2009-10 20.25 lakh/ MW & 5.72% escalation/year thereafter Non-fossil fuel based co-generation Plant
For FY 2009-10 13.35 lakh/ MW & 5.72% escalation/ year thereafter

Solar PV generation for FY 2009-10 Rs. 9 Lakh/ MW & 5.72% escalation/ year thereafter Solar thermal generation for FY 2009-10 Rs. 13 Lakh/ MW & 5.72% escalation/ year thereafter
Auxiliary energy consumption 10%

Tariff Determination ARR (Cont.)

Fuel Cost
Biomass based generation
Station heat rate 3800 kCal/ kWh Plant to be designed for multifuels (crop residue, agro-industrial residue, forest residue) Usage of fossil fuel shall be limited to 15% Statewise calorific value of biomass for tariff (kCal/kg)
Andhra Pradesh Haryana Maharashtra Madhya Pradesh Punjab Rajasthan Tamilnadu Uttar Pradesh Other States 3275 3458 3611 3612 3368 3689 3300 3371 3467

Tariff Determination ARR (Cont.)

Fuel Cost Biomass based generation (Cont..)
State Biomass Price (Rs/MT)
Andhra Pradesh Haryana Maharashtra Madhya Pradesh Punjab Rajasthan Tamilnadu Uttar Pradesh Other States 1301 2168 1801 1299 2092 1822 1823 1518 1797

Non-fossil fuel based co-generation

SHR 3600 kCal/ kWh for power generation only. For cane-bagasse calorific value 2250 kCal/ kg For other fuels in co-gen plant biomass parameters shall apply

Tariff Determination ARR (Cont.)

Fuel Cost non-fossil fuel based co-generation (Cont..)
Statewise Bagassse Prices (Rs/MT) FY 2009-10
Andhra Pradesh Haryana Maharashtra Madhya Pradesh Punjab Tamilnadu Uttar Pradesh Other States 899 1411 1123 809 1398 1243 1013 1163

Thereafter 5% escalation shall be considered Fuel Price Indexation mechanism given separately

Other Principles for approval of charges

Discounting factor for levelalized tariff Levellisation for useful, while tariff shall be determined for control period. Must run (not subjected to merit order)
Wind, Small hydro Municipal solid waste Solar Biomass based generation below 10 MW

Despatches against merit order

Biomass plant larger than 10 MW Non-fossil fuel Co-generation

Sharing of CDM benefits: 1st year 100%, 2nd year 90%, 3rd year 80%, 4th year 70%, 5th year 60%, 6th year onwards 50% of the proceed shall be retained by project developers. Remaining shall be shared by beneficiary.

Capacity Utilization Factor

Wind Generation
For place with Annual Mean Wind Power Density 200 to 250 w/m2 20% For place with Annual Mean Wind Power Density 250 to 300 w/m2 23% For place with Annual Mean Wind Power Density 300 to 400 w/m2 27% For place with Annual Mean Wind Power Density more than 400 w/m2 30% Annual Mean Wind Power Density to be measured at 50 m hub height

Small Hydro Power

45% in Hill States & 30% in other states (net of free power to the host state) Auxiliary consumption 1%

Biomass based generation

PLF in stabilization period 60%, during remaining period of 1st year 70%, 2nd year onwards 80% Auxiliary consumption 10%

Non-fossil fuel based Co-gen Plant

PLF based on number of days plant is available considering 92% loading factor Number of operating days in AP & UP 180 days PLF 45% Number of operating days in Tamilnadu & Maharashtra 240 days PLF 60% Number of operating days in Other states 210 days PLF 53% Auxiliary consumption 8.5%

Solar PV Plant Capacity utilization factor 19% Solar Thermal Plant Capacity utilization factor 23%

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