The Central Electricity Regulatory Commission (CERC) has invited Terms of Reference (ToR) to engage consultants who will help them frame the regulations for renewable energy (RE) tariff determination starting April 1, 2020.

The last date for the submission of the ToR is November 29, 2019.

“Considering the developments in the sector during the current control period, the current and perceived challenges in the renewable energy sector and need for market development, the commission is of the view that it is necessary to have a fresh look into the basis and assumptions of tariff determination from renewable energy sources for the next control period beginning from April 1, 2020,” states the CERC.

The scope of the assignment includes:

Conduct relevant studies to help CERC in framing regulations for the control period starting from April 1, 2020, to March 31, 2023, and the tariff order for the first year of the control period.

Review the terms of the existing RE tariff regulations of 2017-20.

Analyze and study various alternatives and approaches for determining the tariff principles (financial, technical, and operational). Collect relevant information on capital cost, interest on loans and working capital, return on equity, depreciation, sourcing, and cost of fuel, land requirements and its cost, cost of equipment, operation and maintenance expenses, projects involving floating solar projects, hybrid projects (renewable-storage, renewable-renewable or renewable-conventional).

Compare competitive bids and tariff discovered for renewable energy projects at central and state level, auxiliary consumption, fuel calorific value, and other fuel-related specifications for renewable projects.

Develop other regulatory options or alternatives well supported by relevant and reliable analysis and documents.

Assist in drafting terms and conditions for tariff determination along with explanatory notes.

Analyze the comments and suggestions received on the draft regulations and prepare tariff models for each renewable technology and scenarios based on the regulations.

The scope of the assignment also includes a review of the existing operational and performance parameters and financial norms, including methodology and approach for renewable energy technologies taking into account various inputs.

According to the CERC, successful applicants are expected to review the existing tariff structure for renewable generating stations considering the current market scenario, including renewable energy penetration and emerging technologies like floating solar projects, hybrid renewable energy projects, renewable-conventional hybrid projects, renewable-storage projects.

Successful applicants need to complete the entire assignment within six months.

Meanwhile, the preparation of the final tariff models for each renewable technology and scenarios, and preparation of the draft tariff order for the first year (FY2020-21) should be completed within ten days.

Regarding the qualification criteria, the applicant should have professional qualifications with a background in finance, engineering, economics, and law, along with relevant experience in tariff determination.

The turnover and net worth of the consultant should be a minimum of ₹5 million (~$70,613).

The central electricity regulator also recently issued a draft regulation for sharing inter-state transmission charges and losses. According to the draft, the transmission charges will be shared among the designated ISTS customers so that the yearly transmission charges are fully covered and any adjustment on account of the revision of transmission charges are recovered.

In March 2019, the CERC set generic tariffs for the purchase of electricity from a host of renewable energy generation sources during the financial year 2019-20.

Image credit: LONGi Solar