February 16, 2012

Renewable energy tariff norms issued by CERC for 2012-2017 period


The Central Electricity Regulatory Commission (CERC) has issued the norms for determining tariffs of electricity generated from various renewable energy sources. These norms apply for the five-year-period beginning 2012-13. An interesting part of the notification, issued on Friday, is the assumption of module cost for solar photo voltaic at 85 cents a watt, linked to an exchange rate of Rs 53 to a US dollar.

Accordingly, the Commission has fixed the normative capital cost at Rs 10 crore a MW, capacity utilisation of 19 per cent and operation and maintenance expenses of Rs 11 lakh a MW in the first year, and increasing 5.72 per cent thereafter. Current trend reveals that the prices of crystalline and thin film module available in India are in the range of 0.7 to 1 dollar a watt and is expected to decline in future, according to the notification. For solar thermal, the reference capital costs are Rs 13 crore a MW, capacity utilisation 23 per cent and O&M expenses of Rs 15 lakh a MW, with annual escalation of 5.72 per cent.

The capital cost for wind energy projects has been fixed at Rs 5.75 crore a MW for 2012-13, with an annual escalation according to a specified formula for the next four years. For capacity utilisation, CERC has come up with a range of norms, from 20 per cent to 32 per cent, depending on wind density. O&M expenses are Rs 9 lakh a MW, with 5.72 per cent annual escalation. For small hydro projects, CERC has prescribed a matrix of norms, with different values for projects below 5 MW, above 5 MW and below 25 MW as well as for projects set up in Himachal Pradesh, Uttarakhand and the North Eastern states and for those elsewhere.

The capital cost will be Rs 4.45 crore in the first year, with annual escalation, 10 per cent auxiliary consumption, station heat rate of 4,000 Kcal a unit and O&M of Rs 24 lakh a MW with a 5.72 per cent annual increase. In addition, CERC has fixed norms for biomass gassifier plants, debt-equity ratio, normative interest and depreciation charges and a formula for sharing benefits from carbon credits between the generating company and other stakeholders. These guidelines are for the various state electricity regulatory commissions to follow, but are not binding on them.

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