Tariff Regulations Issued for Renewable Projects Selling Power to Chhattisgarh DISCOMs

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Chhattisgarh State Electricity Regulatory Commission (CSERC) has issued regulations specifying the terms and conditions of tariffs for renewable energy projects to sell power to distribution licensees (DISCOMs) in the state.

These regulations are called the Chhattisgarh State Electricity Regulatory Commission (Terms and conditions for determination of generation tariff and related matters for electricity generated by plants based on renewable energy sources) Regulations, 2022.

They will remain in force until March 31, 2025.

Applicability


The regulations will apply to wind power projects, small hydro projects, large hydro projects above 25 MW, biomass power projects based on Rankine cycle technology, non-fossil fuel-based co-generation projects, solar photovoltaic, solar thermal power projects, solar rooftop systems, municipal solid waste (MSW) based power projects, refuse-derived fuel (RDF) based power projects, and biogas-based power projects.

These regulations will apply to the renewable energy projects commissioned between April 1, 2022, to March 31, 2025, in Chhattisgarh and supply power to DISCOMS in the state on a long-term basis.

They also determine the energy charges of existing renewable energy projects with a long-term power purchase agreement (PPA) of 20 years or more, commissioned between April 1, 2012, and March 31, 2022.

Tariff Determination

The Commission will determine the generic tariff based on a suo-motu petition at the beginning of each year of the control period. The project-specific tariff will be determined for the project’s useful life and will be a levelized tariff.

The tariff for renewable energy technologies will be a single-part tariff consisting of fixed cost components like return on equity, interest on loan capital, depreciation, interest on working capital, and operation and maintenance expenses.

Dispatch Principles

All renewable energy power projects will be treated as ‘must run’ projects and will not be subjected to merit order despatch principles. All renewable energy power plants except for biomass power generating stations, biogas-based power projects, and non-fossil fuel-based co-generation projects will not be subjected to scheduling and deviation settlements.

Debt Equity Ratio

For suo-motu determination of generic tariff, the debt-equity ratio will be 70:30. For project-specific tariff, if the equity deployed is more than 30% of the capital cost, equity above 30% will be treated as a normative loan. Provided that where equity deployed is less than 30% of the capital cost, the actual equity will be considered for determining tariff.

Depreciation

The value base for depreciation will be the capital cost of the asset. The asset’s salvage value will be considered as 10%, and depreciation will be allowed up to a maximum of 90% of the capital cost of the asset.

The depreciation rate for the first 15 years of the tariff period will be 4.67% per annum. The remaining depreciation will be spread over the remaining useful life of the project from the 16th year based on the straight line method. Depreciation will be chargeable from the first year of commercial operation.

Late payment surcharge

In case the payment of any bill for charges is delayed beyond a period of 45 days from the date of billing, the generating company will levy a late payment surcharge of 1.25% per month.

Solar Projects

The normative capital cost for setting up a solar power project capacity of 0.5 MW to 2 MW will be considered as ₹45 million (~$564,628)/MW for the first year of the control period.

The capacity utilization factor (CUF) for solar projects will be 19%.

The operational and maintenance (O&M) expenses for solar will be ₹812,000 (~$10,185)/MW for the first year of operation.

Wind Projects

The capital cost for a wind energy project will include the cost of a wind turbine generator, including its auxiliaries, land cost, site development charges, transportation charges, evacuation cost up to the interconnection point, financing charges, and installation. However, the capital and O&M cost of wind projects will be determined only on a project basis.

The CUF for wind projects will range from 22% for 220 W/M2 to 35% for 440 W/M2.

In the case of nature-dependent solar and wind projects, any excess generation over and above normative CUF on an annualized basis or the energy specified in the PPA will be purchased at 75% of the applicable tariff.

In January this year, CSERC issued amendments to its CSERC (Grid Interactive Distributed Renewable Energy Sources) Regulations, 2019, for distributed solar power projects.

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