The Rajasthan Electricity Regulatory Commission (RERC) has issued second amendments to the terms and conditions for the determination of tariff for renewable energy sources (wind and solar).

These regulations wll come into force from the date of their notification in the Official Gazette.

Key Amendments

• RERC will determine project specific tariff, on case to case basis, for solar photovoltaic, solar thermal, wind and other renewable energy projects in Rajasthan.
• The dispatch principles for the electricity generated from wind and solar energy projects will be according to the provisions of the Central Electricity Regulatory Commission (Indian Electricity Grid Code) Regulations, 2010, except for cases where specific provisions have been made by the RERC.
• If the equity deployed is more than 30 percent of the capital cost, equity in excess of 30 percent will be treated as the normative loan.
• Cases where equity deployed is less than 30 percent of the capital cost, the actual equity will be considered for the determination of tariff.
• For generic tariff, loan tenure of 13 years will be considered.
• For the purpose of computation of tariff, normative interest rate of two hundred basis points above the average State Bank of India (SBI) marginal cost of funds-based lending rate (MCLR) (one-year tenor) prevalent during the last available six months will be considered.
• The value base for the purpose of depreciation will be the capital cost. The salvage value of the asset will be 10 percent and depreciation will be allowed up to a maximum of 90 percent of the capital cost of the asset.
• Depreciation rate of 5.28 percent per annum for the first 13 years will be considered and remaining depreciation will be spread out during the remaining useful life of the project.
• The normative return on equity (RoE) will be 14 percent.
• Interest on working capital will be at interest rate equivalent to the normative interest rate of three hundred basis points above the average SBI MCLR (one-year tenor) prevalent during the last available six months for the determination of tariff.
• The RERC will determine project specific capital cost and tariff based on prevailing market trends for wind and solar PV and solar thermal energy projects.
• The RERC will determine project specific operation and maintenance expenses based on the prevailing market information for wind and solar PV and solar thermal projects.
• The tariff of projects set up under renewable energy certificate (REC) mechanism will be governed RERC (Renewable Energy Obligation Compliance Framework) Regulation, 2010.

The draft regulation is open for comments up to January 21, 2019.

Previously, the RERC had fixed ₹5.26 (~$0.08)/kWh without accelerated depreciation (AD) and ₹4.87 (~$0.0754)/kWh with AD as levelized generic tariff for wind projects located in Jaisalmer, Jodhpur and Barmer districts of Rajasthan. The RERC had also fixed ₹5.52 (~$0.085)/kWh without AD and ₹5.12 (~$0.07)/kWh with AD as levelized generic tariff for wind projects located in other districts of Rajasthan.

\