The Himachal Pradesh Electricity Regulatory Commission (HPERC) has proposed a levelized tariff of ₹3.54 (~$0.038)/kWh for biomass gasifier power projects up to 5 MW.

The levelized tariff will apply to the financial year (FY) 2027.

Stakeholders can share their comments/objections before May 11, 2026.

The Commission said that the tariff will apply to biomass gasifier-based power projects of up to 5 MW that use new plant and machinery and are grid-connected. Such projects may also use a 100% producer-gas engine coupled with gasifier technology approved by the Ministry of New and Renewable Energy (MNRE). The projects must be commissioned before March 31, 2027.

The Commission ruled that the generic levelized tariff will cease to apply for a project if the actual annual plant load factor (PLF) remains below 10% of the normative PLF of 85%. The tariff will also not be applicable in cases of distribution companies procuring biomass gasified power through a competitive bidding process.

In a suo motu decision, the Commission proposed adopting capital cost, normative plant load factor, auxiliary consumption, specific fuel consumption (SFC), fuel cost, and operation and maintenance (O&M) charges as specified in the Central Electricity Regulatory Commission’s tariff order for FY 2026.

For calculating the levelized tariff, the Commission set a normative capital cost of ₹67.7 million (~$732,431)/MW and a normative PLF of 85%. The normative auxiliary consumption has been estimated at 10%. As per the CERC tariff order for FY 2026, the Commission has proposed an SFC of 1.25 kg per kWh.

Additionally, normative O&M costs have been proposed at ₹7.79 million (~$84,221)/MW for FY 2026–27. The O&M costs will also be subject to an annual escalation of 3.84%.

To calculate the levelized tariff for biomass projects, the Commission proposed using a biomass fuel price of ₹4,559.01 (~$49,265) for FY 2027, valid until March 31, 2027.

The useful life of biomass projects will be 25 years. The levelized tariff will comprise return on equity, interest on loan capital, depreciation, interest on working capital, and O&M expenses. Since biomass projects include fuel costs, the fuel cost component will be calculated by summing the specific fuel consumption, the biomass fuel price, and the annual escalation factor.

For calculating the levelized tariff, the debt-to-equity ratio will be 70:30. The normative return will be 14%, and interest on loan capital 10.73% per annum.

The Commission has also proposed a depreciation rate of 4.67% for the first 15 years, and 2% per annum for the remaining years. It has also proposed interest on working capital at 12.23% and a discount rate of 9.62%.

The fixed cost component will ve ₹3.53 (~$0.038)/kWh for 25 years, and the variable cost component at ₹6.33 (~$0.068)/kWh for FY 2027.

Recently, HPERC determined the generic levelized tariffs for solar projects up to 5 MW for the FY 2027. The tariffs range from ₹3.34 (~$0.035)/kWh to ₹3.52 (~$0.038)/kWh, depending on project capacity and location.

Subscribe to Mercom’s real-time Regulatory Updates to ensure you don’t miss any critical updates from the renewable industry.