Tariff Period

Technology

No. of Years

Biomass, non-fossil fuel projects

25

Wind, Solar PV, Solar thermal, Solar rooftop

25

Mini, Micro and Small hydro

35

Control Period

5 years, of which the first year shall be FY 2020-21.

Useful Life of a Plant

Technology

No. of Years

Biomass, non-fossil fuel projects

25

Wind, Solar PV, Solar thermal, Solar rooftop

25

Mini, Micro and Small hydro

35

Tariff for FY 2020-21

• Due to COVID-19 outbreak a field study cannot be conducted. Hence the Commission decided to set the tariff as per FY 2019-20 until further notice.

Capital Cost

Capital costs for FY 2020-21 RE projects are project-specific and must be approved by the Commission.

Capacity Utilization Factor

Technology

CUF

Wind*

30%

Small hydro*

30%

Solar PV

28%

Solar thermal

23%

Biomass

Time Period

PLF

During stabilization (max. 6 months)

60%

1 year after stabilization

70%

Onwards

80%

Non-fossil fuel

Operating period (240 days)

60%

* For tariff purpose.

Auxiliary Consumption

Technology

Power Consumption

Small hydro

1%

Solar thermal

10%

Non-fossil fuel based projects

8.50%

Operation and Maintenance (O&M)Expenses

Technology

O&M Cost for FY 2020-21

Wind

Rs.7.72 Lakh/MW

Hydro:

Up to 500 kW

4% of capital cost

500 kW ≤ 1 MW

4% of capital cost

1 MW ≤ 5MW

3.60% of capital cost

5 MW ≤ 25 MW

2.80% of capital cost

Solar PV

 Rs.6 Lakh/MW

Solar thermal

 Rs.15 Lakh/MW

Biomass

5.32 % of capital cost

Non-fossil fuel

3.54% of capital cost

Interest Rate on Loans

• Average State Bank of India marginal cost of funds based lending rate (one-year tenor) prevalent during the last available six months plus 200 basis points.
• For SHP, the interest on loan is calculated at 10.51%

Depreciation

• 5.28% for the first 13 years and the remaining depreciation is spread over the residual useful life of the project taking 10% of the project cost as the salvage value.
• SHP rate of depreciation is 5.28% for the first 13 years and 1.425% for the remaining life of the project.

Return on Equity

14%, to be grossed up by the prevailing minimum alternate tax as on 1 April of the previous year, for the entire useful life of the project.

Interest on Working Capital

Average State Bank of India marginal cost of funds based lending rate (one-year tenor) prevalent during the last available six months plus 300 basis points.

Station Heat Rate for Non-fossil fuel based Projects

3600 kcal/kWh

Calorific Value

Biomass project (Existing plant) : 3611 kcal/kg

Biomass project (New plant): 3100 kcal/kg

Non-fossil fuel based plant: 2250 kcal/kg

Fuel Cost

Biomass fuel cost will be based on a study by the Commission.

Tariff Structure and Design

Generic or project specific:

• Levelised
• Single part tariff for technologies not using fuel.
• Single part with fixed cost and fuel cost component for technologies that are using fuel. 

Despatch Principles

• All renewable energy power plants shall be treated as ‘MUST RUN’ power plants.
• Scheduling of wind and solar energy shall be governed by MERC Forecasting, Scheduling and Despatch of solar and wind generation 2018.
• Biomass and co-generation projects are covered as per scheduling and dispatch of the State grid code, as amended from time to time.

Links

https://www.merc.gov.in/faces/merc/common/outputClient.xhtml

References

https://www.merc.gov.in/