Chhattisgarh State Electricity Regulatory Commission Sets Tariffs For Renewable Energy Projects For FY 2024-25

The Chhattisgarh State Electricity Regulatory Commission has recently issued an important draft order for renewable energy projects. This order involves determining the general tariff for various renewable energy technologies for the fiscal year 2024-25. It covers small hydro projects, non-fossil fuel-based cogeneration plants, solar PV projects with capacities ranging from 0.5 MW to 2 MW, and biogas-based power projects.

The order also sets the energy charges for existing biomass power plants for the same fiscal year. Additionally, it addresses fixed charges for biomass power plants that began operations during the year 2008-09. This initiative is part of a broader effort to ensure fair and consistent tariffs for renewable energy projects across the state.

The commission has established a standard tariff for renewable energy projects that will start operating in the third year of the control period, specifically in FY 2024-25. This standard tariff is meant to provide clarity and predictability for project developers and operators. The tariff proposals included in the order outline the financial expectations and requirements for these projects.

For existing biomass power plants, the commission has determined the energy charges for FY 2024-25. This decision is crucial for ensuring that these plants can continue to operate efficiently and contribute to the state’s renewable energy goals.

In April 2024, the commission decided to start proceedings to determine fixed charges for biomass power plants that began operations in 2008-09. Previously, the commission had determined fixed charges for plants that started operations in the years 2005-06, 2006-07, and 2007-08, but had not yet done so for the 2008-09 plants. This new order ensures that these plants are now included and treated similarly to those that started in 2009-10.

The commission has detailed the standard generation tariff for various renewable energy technologies for FY 2024-25. This includes small hydropower, non-fossil fuel-based cogeneration, solar PV projects, and biogas-based power projects. The tariff period is set from the commercial operation date of the projects and spans the entire useful life of these projects.

For renewable energy technologies that include fuel costs, like biomass and biogas-based power projects, the tariff consists of both fixed and fuel-cost components. This approach ensures that the tariffs reflect the actual costs of generating power from these sources.

The commission also sets norms for capital costs, which include all expenses related to plant and machinery, civil works, erection and commissioning, financing, interest during construction, and infrastructure up to the connection point. These norms are essential for calculating the tariffs and ensuring that the costs are fair and reasonable.

For solar PV projects with capacities between 0.5 MW and 2 MW, the capital cost for FY 2024-25 is set at ₹4.5 crore per MW. For biogas-based power projects, the capital cost for the same period is set at ₹1,186 lakh per MW, with the net project cost after subsidies being ₹886 lakh per MW.

The commission also defined the debt-to-equity ratio for determining tariffs, which is 70:30. The loan tenure is considered to be 15 years, with interest rates based on the average State Bank of India Marginal Cost of Funds based Lending Rate plus 200 basis points. Depreciation is calculated on a straight-line basis, with a depreciation rate of 4.67% per annum for the first 15 years.

Additionally, the return on equity is set at 16.78% for the entire useful life of the project, ensuring a fair return for investors. Operational and maintenance expenses are also specified, with annual increases based on a set escalation rate.

Overall, this order by the commission aims to provide a clear and fair framework for the determination of tariffs for renewable energy projects in Chhattisgarh. It supports the growth of renewable energy in the state by ensuring that projects are financially viable and can operate sustainably.

Please view the document here for more details.