CEA Asks States to Use 5-10% Biomass Pellets for Power Generation in Thermal Plants

The Rajasthan Electricity Regulatory Commission (RERC) has issued new guidelines to amend its regulations concerning the terms and conditions for the determination of tariff for renewable sources-(biomass, biogas and biomass gasifier based power plants) that were passed in 2015.

These regulations will come into force from the date of their notification in the official gazette.

Key Highlights

  • Tariff norms according to these regulations will continue to remain applicable until notification of the revised rules.
  • RERC will determine project-specific tariff, on a case-to-case basis for biomass gasifier-based projects, biogas-based projects, municipal solid waste and refuse derived fuel-based projects with Rankine cycle technology.
  • A petition for the determination of project specific tariff must be accompanied by a fee determined by RERC.
  • Detailed project report outlining technical and operational details, site-specific aspects, the premise for capital cost and financing plan, details of installation, manufacturers/suppliers guaranteed and other technical particulars, recommended operation and maintenance practices and public safety requirements need to be submitted along with a petition for tariff determination.
  • If the equity deployed is more than 30 percent of the capital cost, equity that is more than 30 percent will be treated as a normative
  • If equity deployed is less than 30 percent of the capital cost, the actual equity will be considered for determination of tariff.
  • For determination of generic tariff, loan tenure of 13 years will be considered.
  • A depreciation rate of 5.28 percent per annum for the first 13 years will be considered, and remaining depreciation will be spread over the rest of the useful life of the project considering the salvage value of the project as 10 percent of project cost.
  • The normative return on equity (RoE) will be 14 percent.
  • Interest on working capital will be the 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 excess energy of each time block will be totaled until the end of the month and will be set off against the cumulative drawl of the distribution company’s energy in the same month.
  • For 10 percent of remaining excess injected energy, if any at the end of the month, the renewable energy developer will get the payment at the rate of 60 percent of energy charges applicable for large industrial power tariff, excluding fuel surcharge.
  • Unutilized banked energy, more than 10 percent will lapse.

In January 2019, the commission had issued draft terms and conditions for the determination of tariff for biomass, biogas, and biomass gasifier energy.