Bihar Issues Draft Tariff Regulations for Renewable Energy Projects

The project-specific tariff will apply to biogas-based projects, solar projects, including rooftop (5 MW and above), small hydro projects, solar thermal (5 MW and above), wind, and renewable hybrid projects

August 27, 2020. By News Bureau

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The Bihar Electricity Regulatory Commission (BERC) has announced that it has released draft tariff regulations for renewable energy projects. These guidelines will be effective for the control period of the financial year (FY) 2020-21 to FY 2022-23. The Commission has requested suggestions and comments from several stakeholders by September 25, 2020.

The project-specific tariff will apply to biogas-based projects, solar projects, including rooftop (5 MW and above), small hydro projects, solar thermal (5 MW and above), wind, and renewable hybrid projects.

A useful life period of 25 years will apply to wind power projects, biomass projects with Rankine cycle technology, solar projects, and solar thermal projects. Similarly, the useful life period of municipal solid waste-based projects, biomass gasifier-based projects, and renewable hybrid energy projects will also be 25 years. The useful life period of small hydro projects would be 40 years.

The Commission has deliberated a debt and equity ratio of 70:30, and the return on equity as 14%. The depreciation rate of 4.67% per year was adopted for the first 15 years, and the enduring depreciation would be spread during the outstanding useful life of the project.

The operation and maintenance (O&M) expenses for the financial year (FY) 2020-21 will be increased at the rate of 3.84% per year for the tariff period. The generating company will levy a late payment surcharge of 1.50% per month if the payment is delayed beyond 45 days.

The Commission will determine project-specific capital cost based on the existing market trends. The normative capital cost will be Rs.36.3 million ($488,005)/MW on prevailing market trends for solar and also rooftop solar projects. The capacity utilization factor (CUF) for solar power projects will be 19%. The O&M cost for the FY 2020-21 will be Rs. 858,000 ($11,534)/MW, and the auxiliary consumption will be 0.75% of the gross generation.

The capital cost for solar thermal projects will be Rs.120 million ($1.61 million)/MW, and the CUF will be 23%. The O&M expenses for the first year of the control period will be Rs.2.29 million ($30,786)/MW, and the auxiliary consumption will be 10% of the gross generation.

For biomass with Rankine cycle project (other than rice straw and Juliflora-based project) with a water-cooled condenser, the capital cost will be Rs.55.9 million (~$740,385)/MW. For a project other than rice straw and Juliflora with an air-cooled condenser, the capital cost will be Rs.60 million (~$794,689)/MW. For rice straw and Juliflora (plantation)-based project with a water-cooled condenser, the capital cost will be Rs.61.1 million ($809,258)/MW. For rice straw and Juliflora (plantation)-based project with an air-cooled condenser, the capital cost will be Rs.65.2 million ($863,562)/MW. The O&M expenses for the first year of the control period (FY 2020- 21) will be Rs.4.6 million ($60,926)/MW.

The capital cost for the biomass gasifier-based power projects will be Rs.59.3 million ($797,210)/MW for the FY 2020-21. It will remain valid for the entire duration of the control period unless reviewed by the Commission. The plant load factor for the determination of tariff will be considered as 85%, and the auxiliary consumption will be 10%. The O&M cost for the FY 2020-21 will be Rs.6.1 million ($82,006)/MW.

The capital cost for non-fossil fuel-based co-generation projects will be Rs.49.2 million ($661,428) /MW for the FY 2020-21. It will remain valid for the entire duration of the control period unless reviewed by the Commission. The plant load factor will be fixed at 53% for the computation of the tariff. The gross calorific value for bagasse will be set as 2,250 kCal/kg. The price of bagasse for the first year of the control period, i.e., 2020-21, will be Rs. 2,274 ($30.57)/MT, and it will be increased at the rate of 5% per annum to arrive at the base price for subsequent years of the control period. The O&M expenses for the FY 2020-21 will be Rs.2.4 million ($32,264)/MW.

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