Chattisgarh Commission to set Generic Tariff for Solar Energy Projects

• The Chattisgarh Commission has issued a draft order with the generic levelised tariffs for FY 2019-20 & 2020-21 for renewable energy sources like solar.

The Chattisgarh State Electricity Regulatory Commission (CSERC) has issued a draft order with the findings and results of the suo-moto meetings conducted by the commission to determine the generic levelised tariffs for the fiscal years (FY) 2019-20 and 2020-21 for renewable energy sources like solar and hydro projects.

As per the draft order, the generic tariff would be set on a levelised basis for the tariff period from the commercial operation date (COD) of the projects up to the useful life of the projects. The useful life of a solar PV project is considered to be 25 years and 35 years for a small hydro project. The generic levelised tariff has been determined for the projects that will achieve COD in FY 2019-20 and 2020-21 and have long-term PPAs with distribution companies in the state.

In regards to capital cost, the final amount considered is inclusive of plant and machinery, civil works, erection and commissioning, financing and interest during construction, and evacuation infrastructure up to the interconnection point. For solar PV power projects, the order noted that the capital cost considered for the financial years 2019-20 and 2020-21 for projects of capacity between 0.5 MW to 2 MW would be Rs 4.5 crore per MW. And for projects above 2 MW and up to 5 MW, the capital cost will be Rs 4 crore per MW.

For depreciation, the CSERC added that the salvage value of the asset would be considered as 10 percent, and the depreciation would be allowed up to a maximum of 90 percent of the capital cost of the asset. The depreciation rate for the first 13 years of the tariff period would be 5.28 percent per annum, and the remaining depreciation would be spread over the useful life of the project.

The Commission noted that the return on equity for the entire useful life of the project comes out to be 20.12 percent for the financial year 2019-20 and 19.39 percent for the financial year 2020-21.

The Commission stated that the operation & maintenance (O&M) expenses for the solar project is taken as Rs 7 lakh per MW for the financial year 2019-20 and rising to Rs 7.4 lakh per MW for the financial year 2020-21. An increase of 5.72 percent per annum would be considered after that throughout the tariff period.

The commission has invited comments and suggestions from all stakeholders, with a deadline for February 5, 2019.