Tariff of ₹7.5/kWh Maintained for Increased Capacity of Two Waste to Energy Projects

Both the petitioners wanted the capacity of the project increased from 4 MW to 5 MW


The Andhra Pradesh Electricity Regulatory Commission (APERC)  has approved a tariff of ₹7.5 (~$0.011)/kWh for 5 MW  of waste to energy projects each belonging to Anantapur MSW Private Limited and Envikare Green Energy Private Limited.

Anantapur MSW had entered into a power purchase agreement (PPA) with the Andhra Pradesh Southern Power Distribution Company Limited (APSPDCL) to set up waste to energy project of 4 MW capacity at Rapthadu Village in Anantapur.

The tariff was determined by the New and Renewable Energy Development Corporation of Andhra Pradesh (NREDCAP) after competitive bidding and was placed at ₹7.5 (~$0.011)/kWh for the first year with some changes in the tariff for the following years based on the formula specified in PPA. The commission had approved the PPA for 25 years.

Anantapur MSW also entered into a concession agreement with the Municipal Corporation of Anantapuram for the supply of municipal solid waste needed as the raw material to generate electricity.

Envikare had also entered into a similar agreement with APSPDCL to set up waste to energy project of 4 MW capacity at Survepalli Village in Nellore district.

Now, both the petitioners have requested the state commission to enhance the capacity of the project from 4 MW to 5 MW, and the respective municipal corporations have agreed to supply the additional waste required for 5 MW.

In line with this, APSPDCL wanted to revise the PPAs after the change of capacity from 4 to 5 MW and therefore approached the commission.

The commission felt that while determining the tariff, any additional investment should be accounted towards the enhancement of the generation capacity. However, the petitioner did not provide any supporting data regarding any additional investment expected to be incurred if the project capacity is enhanced from 4 MW to 5 MW.

However, the petitioners submitted that the 5 MW project capacity is the optimal standard level for all waste to energy-generating projects being established in Andhra Pradesh under the competitive bidding process as the 4 MW projects are not financially viable as per financial institutions.

Therefore, it is necessary to establish the project with 5 MW capacity. Petitioners further argued that with the additional capital burden, the tariff of ₹7.5 (~$0.011)/kWh is just enough for the project to survive. They requested the commission to consider the same tariff for the entire project capacity as discovered in the bidding process.

“In the enhancement of capacity from 4 to 5 MW, there may not be any change in the capital investment. Hence, the commission may consider the same tariff which was earlier fixed for both 4 MW, and 5 MW projects,” NREDCAP, the respondent in the case has submitted to the commission.

The commission observed that the projects have already crossed several stages in the process and may not achieve financial closure or viability if the tariff is not determined.

Therefore, it has ruled that the tariff for the entire 5 MW waste to energy project for the first year should be ₹7.5 (~$0.011)/kWh and the tariff for the subsequent years should be determined according to the formula specified in the PPA.

Recently, the Tamil Nadu Electricity Regulatory Commission (TNERC) has set the generic tariff for the procurement of power from municipal solid waste projects in the state at ₹6.28 (~$0.088)/kWh without accelerated depreciation and ₹5.90 (~$0.082)/kWh with accelerated depreciation applicable effective April 1, 2019.

In January 2019, the Delhi Electricity Regulatory Commission (DERC) stated that waste to energy generation projects in the national capital territory of Delhi would be exempted from certain applicable open access and deviation charges for intra-state scheduling purposes of procurement from these projects.

Nitin is a staff reporter at Mercomindia.com and writes on renewable energy and related sectors. Prior to Mercom, Nitin has worked for CNN IBN, India News, Agricultural Spectrum and Bureaucracy Today. He received his bachelor’s degree in Journalism & Communication from Manipal Institute of Communication at Manipal University and Master’s degree in International Relations from Jindal School of International Affairs. More articles from Nitin Kabeer