RERC – Draft solar tariff order
RERC has issued draft soalr tariff order and invited comments and suggestions by 30 April 2015.
Salients features of the draft solar tariff order are given below:
Capital Cost: Commission has proposed the capital cost for Solar PV and Solar Thermal Power plants as 565 Lakh/MW and 1182.3 Lakh/MW respectively for Solar power plants where PPA is signed on or before 31.03.2016 and to be commissioned on or before 31.03.2017 in the case of Solar PV plants and to be commissioned on or before 31.03.2018 in the case of Solar Thermal plants.
Useful life : Commission has considered useful life of 25 years.
Discount factor: Discount factor considered is 10.89%.
Debt-Equity Ratio: The Debt-Equity ratio of 70:30 has been taken for working out the debt and equity components of normative capital cost for determination of levellised generic tariff.
Capacity Utilisation Factor (CUF) & de-ration in CUF: Regulation 27 of RERC RE Tariff Regulations 2014 provides for CUF of 20% with deration factor of 0.50% of CUF for every year after second year for Solar PV power plants.
Further, regulation 30 of RERC RE Tariff Regulations 2014 provides for CUF of 23% with deration factor of 0.25% of CUF for every year after four year for Solar Thermal power plants.
Operation & Maintenance (O&M) Expenses: Normative O&M expenses have been considered as 13.00 Lakh/MW for Solar PV power plants for FY 2015-16 after considering the reduction in cost of Solar PV modules and escalation in market driven items with respect to FY 2014-15. O&M Expenses have been escalated at the rate of 5.85% per annum over the tariff period for computation of the levellised tariff.
Similarly, for Solar Thermal power plants, normative O&M expenses have been considered as 17.75 Lakh/MW with a normative escalation of 5.85% per annum over the Tariff period.
Depreciation: The rate of the depreciation for the first 12 years has been considered as 5.83% of the capital cost per annum and from 13th year onwards, the remaining depreciable value has been spread over the balance useful life of the solar power plants.
Interest rate on long term loan: The interest rate of 13.0% (=10.0% SBI Base rate+3.00%) has been used for computation of interest on long term loan in generic tariff computations, treating loan as 70% of the capital cost.
Interest on working capital requirement: The interest rate on working capital for Solar power plants has been taken as 250 basis points higher than the average of SBI Base rate prevalent during first six months of FY 14-15, which works out to be 12.50% (=10.0%+2.50%).
Return on Equity: Regulation 15(2) of the RERC RE Tariff Regulations 2014 provides for 16% Return on Equity on equity base of 30% determined in accordance with regulation 12 of the said Regulations.
Applicable Tariff for Solar power Plants:
Considering the parameters discussed above, the generic tariff for Solar PV plants is being determined as 6.45 /kWh. This tariff is levellised tariff for 25 years and applicable for plants commissioned without availing benefit of Accelerated Depreciation. With AD benefit, the tariff would be lower by 0.61/kWh i.e. 5.84/kWh. This tariff would be applicable for solar PV plants where PPA is signed on or before 31.03.2016 and which get commissioned on or before 31.03.2017.
Similarly, considering the parameters discussed above, the generic tariff for the solar thermal power plants is being determined as 11.46/kWh. This tariff is levellised for 25 years and applicable for plants commissioned without availing benefit of accelerated depreciation. The tariff would be lower by 1.16/kWh if accelerated depreciation is availed i.e. the tariff would be 10.30/kWh. This tariff would be applicable for solar thermal plants where PPA is signed on or before 31.03.2016 and which get commissioned on or before 31.03.2018.