The Central Electricity Regulatory Commission (CERC) has issued new regulations for determining tariffs for grid-connected renewable energy projects commissioned between July 1, 2024, and March 31, 2027. These regulations aim to streamline the process and provide clarity for developers.
Eligibility Criteria
The regulations outline specific criteria for different renewable energy project types, including wind, solar, biomass, and hybrid projects.
Projects must use new technology and meet site approval requirements from relevant authorities.
Control Period
The regulations cover a control period from July 1, 2024, to March 31, 2027. Tariffs determined during this period will remain valid for the project’s lifespan.
Tariff Types
The CERC will determine two types of tariffs:
- Generic Tariff: Applicable to specific renewable energy project categories and determined annually.
- Project-Specific Tariff: Determined on a case-by-case basis for specific projects or those not covered by the generic tariff.
Tariff Petition Process
Developers seeking a project-specific tariff must submit a petition with detailed information, including project reports, financing plans, and cost breakdowns.
Specific justifications are required if opting for a project-specific tariff when competitive bidding is typically used for that project type.
Tariff Structure
The tariff will consist of various components like return on equity, interest on loans, operation & maintenance expenses, etc.
Projects with a fuel cost component (e.g., biomass) will have a single part tariff with fixed and fuel cost components.
Tariff Design
Tariffs will be determined on a levelized basis, considering the project’s commissioning year and the tariff period. A discount factor based on the weighted average cost of capital will be applied.
Excess Energy
Renewable energy projects can sell excess energy beyond the specified capacity utilization factor in the market. The concerned beneficiary has the first right of refusal to purchase this excess energy at the applicable tariff.
These regulations are expected to provide greater clarity and predictability for renewable energy developers in India. By outlining clear eligibility criteria, tariff types, and the petition process, the CERC aims to simplify project development and encourage investment in the renewable energy sector.
