CERC Releases Draft Regulations For Tariff determination from RE Sources

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Central Electricity Regulatory Commission (CERC) has recently released draft regulations of Terms and Conditions for Tariff determination from Renewable Energy Sources.

According to the commission, These regulations shall come into force on 1.7.2020, and unless reviewed earlier or extended by the Commission, shall remain in force up to 31.3.2023.

As per the notice, these regulations shall apply to cases where tariff for a grid-connected generating station or a unit thereof commissioned during the control period and based on renewable energy sources, is to be determined by the Commission.

The commission further stated that “Provided that in cases of wind power projects, small hydro projects, biomass power project with Rankine cycle technology, non-fossil fuel-based cogeneration projects, solar PV power projects, floating solar projects, solar thermal power projects, renewable hybrid energy projects, renewable energy with storage projects, biomass gasifier based power projects, biogas based power projects, municipal solid waste based power projects and refuse-derived fuel-based power projects, these regulations shall apply subject to the fulfillment of eligibility criteria”.

The generic tariff shall be determined by the Commission on an annual basis following these Regulations and The generic tariff shall be determined, on a levelized basis, considering the year of commissioning of the project, for the tariff period of the project. Provided that for renewable energy projects having a single part tariff with two components, fixed cost component shall be determined on Levelized basis considering the year of commissioning of the project while fuel cost component shall be determined on the year of operation basis in the Tariff Order to be issued by the Commission.

In case a renewable energy project, in a given year, generates energy over the capacity utilization factor or plant load factor, as the case may be, specified under these Regulations, the renewable energy project may sell such excess energy to any entity, provided that the first right of refusal for such excess energy shall vest with the concerned beneficiary. In case the concerned beneficiary purchases the excess energy, the tariff for such excess energy shall be 75 percent of the tariff applicable for that year.

The tariff for renewable energy sources will consist of components such as Return on equity, Interest on loan, Depreciation, Interest on working capital, and Operation and Maintenance expenses. For the determination of generic tariff and project-specific tariff, loan tenure of 15 years shall be considered.

The total capital cost of the RE project will be inclusive of all capital work including plant and machinery, civil work, erection and commissioning, financing, and interest during construction and evacuation infrastructure up to interconnection point.

The notice further states that “Tariff for electricity generated from a generating station based on renewable energy sources, may also be agreed between the generating company and beneficiary, in deviation from the norms specified in these regulations: Provided that the levelized tariff of the project calculated based on the norms specified in these regulations shall be the ceiling Levelized tariff.”

CERC has invited comments/suggestions/objections from the stakeholders and interested persons on the provisions of the above draft Regulation. The last date for submission of the comments is 28th May 2020.

Recently, The Central Electricity Regulatory Commission (CERC) in its order stated that the validity of RECs which have expired or are likely to expire between April 01, 2020, and September 30, 2020, is extended up to October 31, 2020. The notice states that “The Commission in the exercise of Power under Regulation 15 of REC Regulations extends the validity of RECs which have expired as on 1 st April 2020 up to 31st October 2020. Besides, the validity of RECs which are likely to expire between 1 st April 2020 and 30th September 2020 is also extended up to 31st October 2020. 7. Accordingly, RECs which have expired/are due to expire between 1 st April 2020 and 30th September 2020 shall remain valid up to 31st October 2020.”

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