BERC Issues Draft Regulations to Determine RE Tariffs

Draft (Terms and Conditions for Tariff determination from Renewable Energy Sources) Regulations, 2020 is up for comments

The Bihar Electricity Regulatory Commission (BERC) has issued Draft (Terms and Conditions for Tariff determination from Renewable Energy Sources) Regulations, 2020. The draft is up for comments from stakeholders and interested parties up to September 25, 2020. BERC has specified October 6, 2020 as tentative hearing date to finalize the regulations.

The regulations once finalized will remain in force for a period of three years from the date of enforcement.

Highlights

  • Useful life of 40 years has been fixed for small hydro projects, for all other renewable energy generating sources the useful life has been fixed at 25 years.
  • Project specific tariff will be determined for Biogas based projects; Hybrid Solar Thermal Power Projects; Small Hydro Projects, Other hybrid projects that include renewable–renewable or renewable–conventional sources, for which renewable technology is approved by Ministry of New and Renewable Energy (MNRE); any other new renewable energy technologies approved by MNRE.
  • Project specific tariff will also be determined for Wind Power projects, Solar PV projects including Solar Rooftop PV Project (5 MW and above capacity) and Solar Thermal Power Project (5 MW and above capacity).
  • Other than waste to energy projects, distribution companies (DISCOMs) must ensure competitive bidding to enter power purchase agreements (PPAs) to procure from renewable energy projects.
  • For Solar PV projects including Rooftop Solar PV and Solar Thermal (having installed capacity less than 5 MW), Biomass Power Projects based on Rankine Cycle Technologies, Non-fossil fuel based co-generation projects, Biomass gasifier projects and MSW/RDF project based on Rankine cycle, the BERC will determine generic tariff at beginning of each year.
  • All renewable energy projects other than biomass power plants with installed capacity of 10 MW and above, and non-fossil fuel-based co-generation plants will be treated as ‘MUST RUN’ power plants and not be subjected to merit order dispatch principles.
  • Biomass power generating station with an installed capacity of 10 MW and above and non-fossil fuel-based co-generation projects will be subjected to scheduling and dispatch code.
  • For project specific tariff debt to equity ratio will be 70:30.
  • Loan tenure will be 15 years.
  • Normative interest rate of 200 basis points above the average State Bank of India Marginal Cost of Funds based Lending Rate (MCLR)(one-year tenor) prevalent during the last six months will apply on loan.
  • Salvage value of a project will be 10% of cost and depreciation will be allowed up to 90% of capital cost. Depreciation rate of 4.67% will apply for first 15 years. Post that depreciation will be evenly spread across remaining years.
  • O&M expenses will be escalated at the rate of 3.84% annually for the tariff period.
  • If payment is delayed beyond 45 days, late payment surcharge will apply. It will be calculated at rate of 1.50% monthly.

In the past, BERC had set the generic levelized tariff for power generated from solar PV for FY 2019-20 at Rs 4.17/kWh without accelerated depreciation.

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Saumy Prateek

Saumy has been a writer with Reuters, Mercom India and Rystad Energy.

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