The Karnataka Electricity Regulatory Commission (KERC), in a recent order, ruled that the generic tariff for wind power projects will continue to be ₹3.26 (~$0.044)/kWh as determined in the earlier order dated February 27, 2019, and will be subject to the disposal of the appeal by the Appellate Tribunal for Electricity (APTEL).

The order will be valid from April 1, 2021, to March 31, 2022.

Background

Through its order dated June 5, 2018, the Commission had mandated wind power procurement by distribution companies (DISCOMs) only through a competitive bidding process.

Later the Commission set ₹3.26 (~$0.044)/kWh as the ceiling tariff for the tariff-based bidding process. The order was in force from April 1, 2019, to March 31, 2020, and extended for the financial year (FY) 2020-21. The validity of the above tariff order was until March 31, 2021, and that led to the process of determination of tariff for FY 2022.

The Commission issued a discussion paper on the ‘Determination of Generic Tariff for Wind Projects for FY 2022.’ The Commission proposed a ceiling tariff of ₹2.91 (~$0.037)/kWh, including the trading margin.

In response, the Bangalore Electricity Supply Company Limited (BESCOM) proposed a tariff of ₹2.77 (~$0.039)/kWh based on the latest Solar Energy Corporation of India bids and a trading margin of ₹0.04 (~$0.0005)/kWh. Thus, the tariff proposed by BESCOM was ₹2.81 (~$0.039)/kWh. Other electricity supply companies (ESCOMs) requested the Commission reduce the trading margin of ₹0.07 (~$0.0009)/kWh.

The Karnataka Renewable Energy Development Limited (KREDL) stated that the proposed tariff was less than the earlier tariff of ₹3.26 (~$0.044)/kWh, considering the present capital cost of ₹60 million (~$806,300)/MW and the plant load factor in the range of 35.6% to 41%. The Indian Wind Turbine Manufacturers Association proposed a tariff of ₹3.25 (~$0.044)/kWh to ₹3.30 (~$0.044)/kWh based on the cost-plus approach considering various technical and financial parameters and had requested the Commission to determine the tariff, as per the Ministry of New and Renewable Energy (MNRE) circular.

Commission’s analysis

The Commission examined the submissions made by the stakeholders. While the ESCOMs had requested to reduce the proposed tariff, generators and wind associations requested a higher tariff. Also, the stakeholders had requested the Commission to determine the tariff for wind projects below 25 MW, as per the MNRE guidelines.

In its order dated June 5, 2018, the Commission had clarified that the procurement of wind power by DISCOMs would only be through a competitive bidding process. The Indian Wind Energy Association challenged the order before the APTEL, and the matter is pending before the Tribunal.

Considering the facts, the Commission decided to continue with the generic tariff of ₹3.26 (~$0.044)/kWh as determined earlier, subject to the disposal of the appeal by APTEL.

In May last year, the Gujarat Electricity Regulatory Commission had announced the tariff framework to procure wind power by distribution licensees. The Commission had decided that the tariff for all wind projects in the state will be determined through competitive bidding, doing away with generic tariffs.

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