CERC Announces Levelised Generic Tariff For RE Projects

The Central Electricity Regulatory Commission (CERC) has now announced revised levellised generic tariffs for select categories of renewable energy (RE) projects for the financial year 2025-26, covering the period from July 1, 2025 to March 31, 2026.

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The order applies to Small Hydro Projects, Biomass Power Projects using Rankine Cycle technology, Non-fossil fuel-based co-generation plants, Biomass Gasifier and Biogas-based Power Projects, and Refuse Derived Fuel (RDF) based Municipal Solid Waste (MSW) Power Projects.

However, tariffs for Solar PV, Wind, and Renewable Hybrid Energy projects will continue to be determined on a project-specific basis.

The CERC’s final order follows a public consultation process initiated on June 11, during which it received comments from industry stakeholders including the South Indian Sugar Mills Association (SISMA), Sharvani Energy Pvt. Ltd. (SEPL), Sideshwari Power Generation Pvt. Ltd. (SPGPL), Sustainability Hyderabad MSW Energy Solutions Pvt. Ltd. (HMESPL), Sri Avantika Contractors (I) Ltd., and Jaypore Hydropower Projects Ltd.

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Despite numerous objections, the Commission retained the proposed tariff parameters, stating that any revision would fall outside the purview of the current exercise, which is guided by the RE Tariff Regulations, 2024.

Objections over Odisha tariffs rejected

A key point of contention centred on the capacity utilisation factor (CUF) for small hydro projects in Odisha, where developers argued that the CERC’s proposed 45% CUF failed to reflect ground realities. Companies claimed actual generation is closer to 30%, citing heavy reliance on monsoon and canal water.

The Commission, however, declined to amend the CUF, saying changes would require a formal revision to the 2024 regulations.

Similarly, CERC rejected demands to revise capital cost benchmarks for small hydro projects in the state, dismissing claims that construction costs in Odisha had surged to around Rs. 1,400 lakh/MW, well above the normative Rs. 890–1027 lakh/MW range. The Commission said the capital costs were determined after considering relevant market factors and are uniform across states.

Final levellised tariffs announced

Tariffs are computed based on factors including project lifespan (ranging from 20 to 40 years), capital cost norms, a 70:30 debt-equity ratio, and a return on equity of 14–15%, grossed up for minimum alternate tax (17.47%) for the first 20 years and corporate tax (34.94%) thereafter.

The Commission released the following levellised tariffs (pre-accelerated depreciation), varying by region and technology:

Small Hydro Power Projects (Below 5 MW)

• Himachal Pradesh, Uttarakhand, West Bengal, NE States, J&K and Ladakh: Rs. 6.58/kWh
  
  

• Odisha: Rs. 5.04/kWh
  
  

• Punjab: Rs. 5.68/kWh
  
  

• Other States: Rs. 7.57/kWh
  
  

Corresponding tariffs for 5–25 MW projects range from Rs. 4.95/kWh (Odisha) to Rs. 7.42/kWh (Other States).

Biomass Power Projects (Rankine Cycle, water-cooled condenser)

• Andhra Pradesh: Rs. 9.53/kWh
  
  

• Haryana: Rs. 10.46/kWh
  
  

• Maharashtra: Rs. 10.63/kWh
  
  

• Tamil Nadu: Rs. 9.43/kWh
  
  

Bagasse-based Co-generation

• Andhra Pradesh: Rs. 7.86/kWh
  
  

• Haryana: Rs. 9.18/kWh
  
  

• Maharashtra: Rs. 8.74/kWh
  
  

• Punjab: Rs. 8.43/kWh
  
  

• Tamil Nadu: Rs. 7.33/kWh
  
  

Other Tariffs

• Biomass Gasifier (Andhra Pradesh): Rs. 9.38/kWh
  
  

• Biomass Gasifier (Haryana): Rs. 10.23/kWh
  
  

• Biogas-based Power: Rs. 10.88/kWh
  
  

• RDF-based MSW: Rs. 10.47/kWh