Chhattisgarh Issues tariff determination criteria

02 Dec 2024 CW Team

Eligibility Criteria
Eligible projects must use new plants and machinery. Qualifying projects include solar PV, floating solar, solar thermal, and rooftop solar systems approved by the government. Floating solar projects linked to existing renewable plants are recognised as hybrid projects, provided each renewable source contributes at least 33% of the total capacity. Renewable energy with storage is defined as projects using renewable power for partial or full energy storage connected at the same interconnection point.

Tariff and Design
The tariff period aligns with the project’s useful life. A single-part tariff covers fixed costs such as equity returns, interest, depreciation, and operation and maintenance (O&M) expenses. Projects exceeding their Capacity Utilisation Factor (CUF) can sell surplus energy, with the beneficiary holding the first refusal right. Renewable projects with storage are subject to scheduling only for grid operations.

Financial Norms
The debt-equity ratio is set at 70:30, with deviations treated as either normative loans or actual equity. Loan tenure is capped at 15 years. Depreciation is calculated at 4.67% annually for the first 15 years, covering up to 90% of the asset cost. Equity returns are fixed at 14% post-tax for most renewable projects. O&M expenses, escalating at 5.25% annually, include maintenance, administrative costs, and insurance.

Technology-Specific Parameters

Wind Projects: Tariffs and O&M expenses are determined project-specifically based on market trends.

Floating Solar: CUF is set at 19%, with tariffs and O&M costs tailored to individual projects.

Hybrid Projects: Require a minimum CUF of 30%. Composite levelised tariffs are determined based on the project's lifespan.

Storage Projects: Minimum efficiency rates for batteries and pumped storage are 80% and 75%, respectively. Tariffs consider round-the-clock or agreed supply periods. These measures aim to streamline tariff structures, incentivise technology adoption, and ensure fair pricing for renewable energy, supporting Chhattisgarh’s sustainable energy transition.

The Chhattisgarh State Electricity Regulatory Commission (CSERC) has introduced regulations for determining tariffs on renewable energy sales to distribution licensees, effective from 1 April 2025. These regulations, titled Terms and Conditions for Determination of Tariff for Renewable Energy Sources, 2024, will apply to renewable projects achieving commercial operation between 1 April 2025 and 31 March 2030. Existing projects with long-term power purchase agreements (PPAs) commissioned before 31 March 2025 will follow the respective tariff orders. Eligibility Criteria Eligible projects must use new plants and machinery. Qualifying projects include solar PV, floating solar, solar thermal, and rooftop solar systems approved by the government. Floating solar projects linked to existing renewable plants are recognised as hybrid projects, provided each renewable source contributes at least 33% of the total capacity. Renewable energy with storage is defined as projects using renewable power for partial or full energy storage connected at the same interconnection point. Tariff and Design The tariff period aligns with the project’s useful life. A single-part tariff covers fixed costs such as equity returns, interest, depreciation, and operation and maintenance (O&M) expenses. Projects exceeding their Capacity Utilisation Factor (CUF) can sell surplus energy, with the beneficiary holding the first refusal right. Renewable projects with storage are subject to scheduling only for grid operations. Financial Norms The debt-equity ratio is set at 70:30, with deviations treated as either normative loans or actual equity. Loan tenure is capped at 15 years. Depreciation is calculated at 4.67% annually for the first 15 years, covering up to 90% of the asset cost. Equity returns are fixed at 14% post-tax for most renewable projects. O&M expenses, escalating at 5.25% annually, include maintenance, administrative costs, and insurance. Technology-Specific Parameters Wind Projects: Tariffs and O&M expenses are determined project-specifically based on market trends. Floating Solar: CUF is set at 19%, with tariffs and O&M costs tailored to individual projects. Hybrid Projects: Require a minimum CUF of 30%. Composite levelised tariffs are determined based on the project's lifespan. Storage Projects: Minimum efficiency rates for batteries and pumped storage are 80% and 75%, respectively. Tariffs consider round-the-clock or agreed supply periods. These measures aim to streamline tariff structures, incentivise technology adoption, and ensure fair pricing for renewable energy, supporting Chhattisgarh’s sustainable energy transition.

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