RERC approves tariff adjustments and amendments for biomass projects

26 Dec 2023 CW Team

Stakeholders advocated for maintaining the existing 5% tariff increase, a proposal the Commission considered and incorporated into the regulations. Consequently, the Commission introduced a provision specifying that annual changes in variable charges, either increases or decreases in Rs/kWh compared to the preceding year's variable charges, would be applicable. The base year for this calculation is set as FY 2023-24.

For projects with expired power purchase agreements (PPA), the Commission determined that a tariff equivalent to 85% of the previous year's PPA duration tariff, with annual adjustments in variable charges, would be applicable.

Addressing concerns rose during the public feedback process, the Commission made observations on stakeholders' issues and is in the process of formulating final comments into a regulation for notification.

The draft regulations, along with explanatory details and public notices, were open for public feedback until October 16, 2023. Seventeen stakeholders provided input, which the Commission considered in finalising the regulations.

The Commission addressed concerns and made amendments to the regulations in various areas:

? Scope of Regulations: The Commission clarified that the regulations apply across the state and for the entire tariff determination period from April 1, 2020, to March 31, 2026.

? Control Period: Stakeholders proposed extending the control period until March 31, 2027, for wind power projects. The Commission retained the control period for six financial years, from April 1, 2020, to March 31, 2026.

? Tariff for Biomass Projects: Concerns were raised about the applicability of tariff regulations to biomass projects. The Commission exempted already commissioned projects or those with approved PPAs before the new regulations' notification. It also allowed fuel price escalations for such projects.

? Use of Fossil Fuel or Solar Power in Biomass Projects: The Commission allowed the use of 15% fossil fuel or solar power for existing biomass projects and extended the provision for solar power procurement until March 31, 2026.

? Banking Period: The Commission clarified that the banking facility, including charges, would apply until March 31, 2030. After this date, banking provisions would be governed by the regulations in force at that time.

These amendments reflect the Commission's efforts to address stakeholder concerns and ensure clarity and fairness in the regulatory framework for renewable energy projects in Rajasthan.

The Rajasthan Electricity Regulatory Commission (RERC) has granted approval for the annual adjustment of tariffs for biomass projects in the state. This adjustment will be based on variations in variable charges such as fuel costs. According to the proposed Rajasthan Electricity Regulatory Commission (Terms and Conditions for Tariff Determination from Renewable Energy Sources) (Second Amendment) Regulations, 2023, the tariff established for biomass projects in the financial year (FY) 2023-24 will be applicable for FY 2024-25 and FY 2025-26. Stakeholders advocated for maintaining the existing 5% tariff increase, a proposal the Commission considered and incorporated into the regulations. Consequently, the Commission introduced a provision specifying that annual changes in variable charges, either increases or decreases in Rs/kWh compared to the preceding year's variable charges, would be applicable. The base year for this calculation is set as FY 2023-24. For projects with expired power purchase agreements (PPA), the Commission determined that a tariff equivalent to 85% of the previous year's PPA duration tariff, with annual adjustments in variable charges, would be applicable. Addressing concerns rose during the public feedback process, the Commission made observations on stakeholders' issues and is in the process of formulating final comments into a regulation for notification. The draft regulations, along with explanatory details and public notices, were open for public feedback until October 16, 2023. Seventeen stakeholders provided input, which the Commission considered in finalising the regulations. The Commission addressed concerns and made amendments to the regulations in various areas: ? Scope of Regulations: The Commission clarified that the regulations apply across the state and for the entire tariff determination period from April 1, 2020, to March 31, 2026. ? Control Period: Stakeholders proposed extending the control period until March 31, 2027, for wind power projects. The Commission retained the control period for six financial years, from April 1, 2020, to March 31, 2026. ? Tariff for Biomass Projects: Concerns were raised about the applicability of tariff regulations to biomass projects. The Commission exempted already commissioned projects or those with approved PPAs before the new regulations' notification. It also allowed fuel price escalations for such projects. ? Use of Fossil Fuel or Solar Power in Biomass Projects: The Commission allowed the use of 15% fossil fuel or solar power for existing biomass projects and extended the provision for solar power procurement until March 31, 2026. ? Banking Period: The Commission clarified that the banking facility, including charges, would apply until March 31, 2030. After this date, banking provisions would be governed by the regulations in force at that time. These amendments reflect the Commission's efforts to address stakeholder concerns and ensure clarity and fairness in the regulatory framework for renewable energy projects in Rajasthan.

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