Bihar Releases Draft Tariff Regulations for Renewable Energy Projects

The Bihar Electricity Regulatory Commission (BERC) has released draft tariff regulations for renewable energy projects. These regulations will be valid for the control period of the financial year (FY) 2020-21 to FY 2022-23. The Commission has invited suggestions and comments from various 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 considered 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 remaining depreciation would be spread during the remaining 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.

Solar Projects

The Commission will determine project-specific capital cost based on the existing market trends. The normative capital cost will be ₹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 ₹858,000 (~$11,534)/MW, and the auxiliary consumption will be 0.75% of the gross generation.

Parameters for Solar Thermal Projects (Less than 5 MW) 

The capital cost for solar thermal projects will be ₹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 ₹2.29 million (~$30,786)/MW, and the auxiliary consumption will be 10% of the gross generation. 

Biomass Power Projects with Rankine Cycle Technology

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

Biomass Gasifier-Based Power Projects

The capital cost for the biomass gasifier-based power projects will be ₹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 ₹6.1 million (~$82,006)/MW.

Non-Fossil Fuel Based Co-Generation Projects

The capital cost for non-fossil fuel-based co-generation projects will be ₹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 ₹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 ₹2.4 million (~$32,264)/MW.

Recently, the Central Electricity Regulatory Commission announced tariff regulations for renewable energy projects. These regulations will come into force from July 01, 2020, and will be valid until March 31, 2023. The draft regulations were published in May 2020.

Earlier, BERC approved the request of the Bihar State Power Holding Company Limited to carry forward the shortfall in its renewable purchase obligation for the financial year 2019-20 to FY 2020-21. The Commission further added that the power company could purchase either solar power or solar renewable energy certificates to fulfill the RPO shortfall for FY 2019-20.

Bihar is one of the least developed states for solar, with only 111 MW of solar projects currently in operation, according to Mercom India’s Solar Project Tracker.