New Generic Tariffs Announced for Renewable Projects in Goa and Union Territories
The order will be effective from June 01, 2020, to March 31, 2021
The Joint Electricity Regulatory Commission (JERC) has announced generic tariffs for solar, wind, and small hydro projects.
The JERC has jurisdiction over the state of Goa, and union territories of Andaman & Nicobar Islands, Lakshadweep Islands, Puducherry, Daman & Diu, Dadra & Nagar Haveli, and Chandigarh.
The order will come into force from June 01, 2020, and will be valid until March 31, 2021. The Commission also extended the existing generic tariff structure until May 31, 2020, because of the ongoing COVID-19 crisis. The existing tariff structure announced last year was set to expire on March 31, 2020.
For solar (gross metering) projects, the Commission considered the useful life period of 25 years.
According to the order, the debt and equity ratio components for solar projects in the mainland areas have been set as ₹35 million (~$465,036)/MW and ₹15 million (~$199,301)/MW, respectively.
Similarly, the debt and equity components for solar power projects for the island areas have been set at ₹42 million (~$558,043)/MW and ₹18 million (~$239,161)/MW, respectively.
An interest rate of 9.91% is considered for solar projects in mainland areas, and 10.91% for island areas. The Commission has estimated the depreciation for solar projects to be 5.83% for the first 12 years and 1.54% for the remaining 13 years.
According to the Commission, the operation & maintenance (O&M) expenses for the FY 2021 have been determined as ₹750,000 (~$9,965)/MW for mainland areas and ₹1.2 million (~$15,944)/MW for island areas.
For wind projects as well, the Commission considered the useful life as 25 years.
For mainland areas, the Commission has deemed debt and equity components for projects at ₹36.75 million (~$488,288)/MW and ₹15.75 million (~$209,266)/MW, respectively.
For Andaman and Nicobar, the debt and equity components have been taken as ₹43.75 million (~$581,295)/MW and ₹18.75 million (~$249,126)/MW, respectively. For Lakshadweep, the debt and equity components have been considered as ₹49 million (~$651,050)/MW and ₹21 million (~$279,021)/MW, respectively.
An interest rate of 9.91% has been estimated for projects in the mainland areas and 10.91% for the island areas (Andaman & Nicobar and Lakshadweep). The state has assessed a depreciation rate of 5.83% for the first 12 years and at a rate of 1.54% for the remaining period of 13 years.
The Commission has considered ₹788,000 (~$10,469)/MW as O&M expenses for the mainland areas, while for Andaman and Nicobar and Lakshadweep, these expenses have been taken as ₹1.25 million (~$16,608)/MW and ₹1.4 million (~$18,601)/MW respectively.
The useful life for small hydro projects has been considered as 35 years.
For mainland areas, the debt and equity components for projects up to 5 MW have been estimated as ₹54.53 million (~$724,526)/MW and ₹23.37 million (~$310,511)/MW, respectively. For projects of capacities between 5 MW and 25 MW, the debt and equity components have considered as ₹49.49 million (~$657,561)/MW and ₹21.21 million (~$281,812)/MW, respectively.
For island areas, the debt and equity components for projects with capacities up to 5 MW have been taken as ₹73.5 million (~$976, 575)/MW and ₹31.5 million (~$418,532)/MW, respectively. For capacities between 5 MW and 25 MW, the debt and equity components have been calculated as ₹63 million (~$837,064)/MW and ₹27 million (~$358,742)/MW, respectively.
According to the order, an interest rate of 9.91% has been determined for projects with capacities up to 5 MW with a gross opening loan amount of ₹54.53 million (~$724,526)/MW. The same rate applies for projects above 5 MW and up to 25 MW with a gross opening loan amount of ₹49.49 million (~$657,561)/MW. Similarly, for island areas, the interest rate of 10.91% has been considered for projects with capacities up to 5 MW with a gross opening loan amount of ₹ 73.5 million (~$976,575)/MW. The same interest rate applies for projects between 5 MW and 25 MW.
The Commission has taken the deprecation rate of 5.83% for the first 12 years and 0.87% for the remaining 23 years.
For mainland areas, the O&M cost of projects up to 5MW has been assessed as ₹1.55 million (~$20,594)/MW, and for projects above 5 MW and up to 25 MW, the O&M cost has been taken as at ₹1.41 million (~$18,734)/MW. For island areas, the O&M cost for projects lower than or equal to 5 MW has been set at ₹2.62 million (~$34,811)/MW, and for projects above 5 MW and up to 25 MW, it has been set at ₹2.25 million (~$29,895)/MW.
Notably, Maharashtra recently announced that going forward, the state will determine tariffs for wind, solar, non-fossil fuels-based co-generation, biomass-based, and hybrid renewable power projects only through a transparent process of competitive bidding. The Commission said that it would only adopt rates discovered this way and would no longer come up with generic tariffs.
Similarly, Gujarat has decided that the tariff for all wind projects in the state will be determined through competitive bidding, doing away with the practice of generic tariffs.
Previously, the Karnataka Electricity Regulatory Commission issued an order stating that the generic tariff for wind power projects will continue to remain the same at ₹3.26 (~$0.04)/kWh as determined in February 2019. The Commission said that the tariff of ₹3.26 (~$0.04)/kWh will also be the ceiling tariff for tariff-based reverse bidding for wind projects.