Telangana_ Variable Cost for Power Projects Based on Biomass, Bagasse, Industrial Waste

The Telangana State Electricity Regulatory Commission (TSERC) has proposed the variable costs for the existing biomass, bagasse, and industrial waste-based power projects in the state.

The costs will be applicable for projects having power purchase agreements (PPAs) with the distribution licensees and will be valid from financial year (FY) 2020-21 to FY 2023-24. Simply put, a variable cost is incurred by a project if there is a change in the determined level of output.

The Commission has invited suggestions and comments from all stakeholders by August 03, 2020.

The Commission has already approved the norms for the determination of variable costs for the FY 2019-20 for these projects in the state.


According to the document released by the Commission, the auxiliary consumption for biomass-based power projects has been set at 10%; for bagasse-based projects, it is 9% and 10% for industrial waste-based power projects. The gross calorific value should be 3,100 kcal/kg for biomass-based power projects, 2,250 kcal/kg for bagasse-based power projects, and 3,100 kcal/kg for industrial waste-based power projects.

Telangana - Norms for Determining the Variable Cost for Existing Biomass, Bagasse and Industrial Waste-Based Power Projects Having PPAs with the Distribution Licensees, for FY 2020-21 to 2023-24

The Commission has set the variable cost for biomass-based projects for the FY 2020-21, at ₹5.006 (~$0.067)/kWh. For bagasse-based projects, it will be ₹3.3 (~$0.044)/kWh, and ₹5.006 (~$0.067)/kWh has been set for industrial-waste projects.

Similarly, for FY 2021-22, the variable cost for biomass-based projects will be ₹5.25 (~$0.07)/kWh. On the other hand, a rate of ₹3.46 (~$0.046)/kWh will apply for bagasse-based power projects, and ₹5.25 (~$0.07)/kWh for industrial waste-based power projects.

The variable cost for the FY 2022-23 is ₹5.52 (~$0.074)/kWh for biomass-based projects, ₹3.64 (~$0.049)/kWh for bagasse-based projects, and ₹5.5202 (~$0.074)/kWh for industrial waste power projects.

Recently, the Telangana Commission also announced the generic tariff for electricity generated from refuse-derived fuel (RDF) based power projects in the state. The Commission approved the levelized tariff of ₹7.84 (~$0.10)/kWh, which will be applicable for those RDF-based projects which have achieved commercial operation date from FY 2020-21 to FY 2023-24.

Earlier, the MNRE revised the guidelines for its waste to energy program. A new addition to the guidelines was the inclusion of municipal solid waste-based projects based on the clarification by the Department of Expenditure. The objective of the program is to set up projects for biogas or bio-CNG, or power from urban, industrial and agricultural waste and captive power and thermal use through gasification in industries; to promote setting up of projects for the recovery of energy from municipal solid wastes for feeding power into the grid and for meeting captive power, thermal and vehicular fuel requirements.

Notably, the MNRE previously clarified the eligibility of power generated from the co-firing of biomass in thermal power plants as renewable energy. The government said that the power generated from the co-firing of biomass in thermal power plants was renewable energy and eligible for meeting the non-solar renewable purchase obligations. Also, the Central Electricity Regulatory Commission was requested to develop a procedure for quantifying the energy produced from biomass in biomass co-fired thermal power plants reliably and accurately.