CERC Announces Levelized Tariffs for Small Hydro, Biomass and Biogas Projects for FY23

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The Central Electricity Regulatory Commission (CERC) has issued levelized generic tariffs for renewables for the financial year (FY) 2022-23.

The control period of the tariff will be from July 1, 2020, to March 31, 2023.

The project-specific tariff will apply to small hydro projects, biomass power projects with rankine cycle technology; non-fossil fuel-based cogeneration projects; biomass gasifier-based power projects; and biogas-based power projects.

The tariff structure consists of return on equity, interest on loan capital, depreciation, interest on working capital, and operation and maintenance expenses. For renewable energy technologies having fuel cost components like biomass power projects with rankine cycle technology, non-fossil fuel-based cogeneration, biomass gasifier-based power projects, and biogas-based power projects, single part tariff with two components (fixed cost and fuel cost), has been proposed.


A useful life period of 25 years will apply to all these projects except for small hydro projects whose useful life has been set at 40 years.

The Commission approved a debt-equity ratio of 70:30 and a rate of return of 16.96% for the first 20 years and 21.52% after 20 years.

The depreciation rate for the first 15 years was set at 4.67%. The rate of depreciation from the 16th year would be spread over the remaining useful life of the renewable energy project.

For small hydro projects, the rate of depreciation from the 16th year will be 0.80%, and 2% for biomass projects, non-fossil fuel cogeneration projects, biomass gasifiers, and biogas-based projects.

Operation and Maintenance Expenses

The operation and maintenance (O&M) expenses for FY 2022-23 will be 3.84%.

The O&M expenses for biomass power projects with rankine cycle technology for the first year of the control period will be ₹4.64 million (~$56,780)/MW, and for non-fossil fuel cogeneration, it will be ₹2.45 million (~$29,981)/MW. The O&M expenses would be ₹6.13 million (~$75,029)/MW for biomass gasifier-based power projects and biogas projects.

For hydropower projects below 5 MW in Himachal Pradesh, Uttarakhand, West Bengal, the union territory of Jammu and Kashmir, the union territory of Ladakh, and northeastern states, the O&M expenses have been determined at ₹4.5 million (~$55,081)/MW. For projects in the range of 5 MW and 25 MW, they would be ₹3.38 million (~$41,372)/MW.

For other states, the O&M cost for projects below 5 MW would be  ₹3.63 million (~$44,432)/MW. For projects ranging from 5 MW to 25 MW, the O&M cost is set at ₹2.63 million (~$32,192)/MW.

Capital Cost

For hydropower projects up to 25 MW in Himachal Pradesh, Uttarakhand, West Bengal, the union territories of Jammu and Kashmir and Ladakh, and northeastern states, the net capital cost is ₹110 million (~$1.34 million)/MW.

For other states, the net capital cost for projects below 5 MW is ₹78 million (~$954,747)/MW, and for projects in the range of 5 MW to 25 MW, the net capital cost is ₹90 million (~$1.1 million)/MW.

For small hydro projects in Himachal Pradesh, Uttarakhand, West Bengal, the union territories of Jammu and Kashmir and Ladakh, and the northeastern states, the capacity utilization factor (CUF) is 45%. For other states, the CUF is 30%.

Levelized Tariff

The levelized tariff for small hydro projects below 5 MW in Himachal Pradesh, Uttarakhand, West Bengal, Northeastern States and Union Territories of Jammu and Kashmir & Ladakh for FY23 is ₹5.23 (~$0.06)/kWh. The tariff in other states is ₹5.84 (~$0.07)/kWh.

The levelized tariff for small hydro projects from 5 MW up to 25 MW in Himachal Pradesh, Uttarakhand, West Bengal, Northeastern States and Union Territories of Jammu and Kashmir & Ladakh for FY23 is ₹4.76 (~$0.06)/kWh. The tariff in other states is ₹5.76 (~$0.07)/kWh.

Levelized Tariff for Small Hydro Projects for FY 2022-23The levelized tariff for bagasse-based cogeneration projects ranges from ₹6.05 (~$0.074)/kWh in Telangana to ₹7.70 (~$0.094)/kWh in Haryana.

Levelized Tariff for Bagasse-Based Co-Generation Projects for FY 2022-23The levelized tariff for biomass gasifier projects ranges from ₹7.58 (~$0.092)/kWh in Tamil Nadu to ₹8.71 (~$0.106)/kWh in Punjab. The levelized tariff for biogas-based projects is ₹8.59 (~$0.105)/kWh.

Levelized Tariff for Biomass Gasifier and Biogas-based Generation Projects for FY 2022-23Recently, the Madhya Pradesh Electricity Regulatory Commission approved a tariff of ₹5.07 (0.063)/kWh for distribution companies (DISCOMs) to procure power generated from biomass-based projects in Madhya Pradesh.

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