Rajasthan Electricity Regulatory Commissionrerc.rajasthan.gov.in/cnpl/PDFs/biogas.pdfRajasthan Electricity Regulatory Commission Vidyut Viniyamak Bhawan, Near State Motor Garage, Sahkar

Rajasthan Electricity Regulatory Commission Vidyut Viniyamak Bhawan, Near State Motor Garage, Sahkar Marg, JAIPUR -302001

Phone: 0141-2740067 Fax: 0141-2741018,

Website: www.rerc. rajasthan.gov.in E-mail: [email protected]

Public Notice

In exercise of powers conferred by Sec. 61and 62, read with Section 181 of

the Electricity Act, 2003, the Rajasthan Electricity Regulatory Commission, having

framed the Draft RERC (Terms And Conditions for Determination of Tariff)

(Seventh Amendment) Regulations 2014, along-with its Explanatory

Memorandum, for extending the control period for Biomass and Biogas Power

Projects upto FY 2014-15, solicits the suggestions/comments from the

stakeholders and interested persons on draft regulations.

Persons/stakeholders, desirous of offering suggestions/comments on the

said Draft Regulations, may do so in five copies, so as to reach this office, latest

by 20th January, 2014. The Draft Regulations, along with Explanatory

Memorandum, is available with the Receiving Officer of the Commission and

can be obtained on payment of Rs. 300/-. The draft document is also available

on RERC website www.rerc.rajasthan.gov.in.

This is to inform that it would not be possible for the Commission to

entertain a request for extension of date for submission of

suggestions/comments beyond the date indicated in this notice and

suggestions/comments received after last date, if any, shall not be considered.

Persons giving suggestions/comments on the Draft Regulations and wish to

be heard in person by the Commission, must indicate that, and should also

indicate their phone number or e-mail address. The Commission will hear the

interested persons on 29th January 2014 from 11.00 AM onwards, in the office of

the Commission.

G. K. Sharma

Secretary

(Not to be published)

No. RERC/ Secy/ JD (CA)/ F. 794/D. Dt.

Deputy Director

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RAJASTHAN ELECTRICITY REGULATORY COMMISSION

NOTIFICATION

Jaipur,........., 2014

No. RERC/Secy/ Reg. -____ - In exercise of the powers conferred on it under

Section 61 and Section 62 read with Section 181 of the Electricity Act, 2003

(No. 36 of 2003), the Rajasthan Electricity Regulatory Commission, after

previous publication, hereby makes the following Regulations to amend

‘Rajasthan Electricity Regulatory Commission (Terms and Conditions for

determination of Tariff) Regulations, 2009.

1. Short title, extent and commencement

(1) These Regulations shall be called ‘The Rajasthan Electricity

Regulatory Commission (Terms and Conditions for determination of

Tariff) (Seventh Amendment) Regulations, 2014’.

(2) These Regulations shall come into force from April 1, 2014.

2. Amendment in regulation 1:

The following proviso shall be inserted below sub-regulation 2 of

regulation 1:

“Provided that Regulations applicable to Bio-mass and Biogas power

plants shall continue to be in force upto FY 2014-15.”


A new entry “(i)” shall be inserted below the entry (h) at sub- regulation

71 of existing regulation 2 as under:

“(i) Biogas Power Project: 20 years”.


A proviso shall be inserted below the existing regulation 4 as under:

“Provided that for Biomass and Biogas power projects, the control

period stands extended upto March 31, 2015.”

Page 2 of 9

5. Amendment in Regulation 82

(1) Sub-regulation 1(a) of existing regulation 82 shall be replaced by

the following:

“82(1)(a) Tariff for electricity supply to the distribution licensee by

biomass power plants, for which Power Purchase Agreements (PPA)

have been executed under GoR policy of 1999 and commissioned

before 30.09.2008 shall be as hereunder:

Sr. No.

Renewable Energy

Generation during the

year

Tariff in Rs. Per kWh for plants

under GoR policy of 11.3.99

1 1998-99 2.7500

2 1999-00 2.8875

3 2000-01 3.0319

4 2001-02 3.1835

5 2002-03 3.3426

6 2003-04 3.5098

7 2004-05 3.6853

8 2005-06 3.8695

9 2006-07 4.0630

10 2007-08 4.2662

11 2008-09 4.4795

12 2009-10 4.7034

13 2010-11 4.9386

14 2011-12 5.1855

15 2012-13 5.4448

16 2013-14 5.7171

17 2014-15 6.0029

(2) A new sub-regulation 3 shall be inserted below the sub-regulation 2

of regulation 82 as under:

“(3) Tariff for plant under REC Mechanism

In case a Biomass generator desires to switch over from the REC

mechanism to preferential tariff mechanism under regulation

12(2) of RERC (Renewable Energy Certificate and Renewable

Purchase Obligation Compliance Framework) Regulations, 2010,

the year wise generic tariff determined in accordance with RERC

Tariff Regulations 2009 including amendments thereof for sale of

Page 3 of 9

energy to Distribution Licensee in respect of the plants

commissioned in the year in which the said generation plant was

commissioned shall be applicable for its remaining years of useful

life from the date of such switch over.”

6. Amendments in Regulation 83

(1) The first para of sub-regulation 7 of regulation 83 shall be replaced

by the following:

“(7) The performance parameters for tariff determination of

biomass power plants for the year 2014-15 shall be as under:”

(2) The year “2013-14” appearing in sub-regulation 7(b) of regulation 83

shall be replaced by the year “2014-15”.

(3) The entry relating to capital cost at serial no. (i) in the table in

regulation 7(b) shall be replaced by the following:

Parameters Water Cooled

Condenser

Air Cooled

Condenser

(i) Capital Cost* Rs.526 Lakh/MW Rs.561 Lakh/MW

(4) The existing regulation 83(7)(b)(v) (a) and (b) shall be replaced by

the following:

“(v) After coming into effect of the ‘Rajasthan Electricity Regulatory

Commission (Terms and Conditions for determination of

Tariff)(Seventh Amendment) Regulations, 2014’, Biomass fuel price

shall be Rs 2350 /MT for FY 2014-15 for power plants commissioned

during the control period (2009-15). This price shall be subject to

revision prospectively during the course of the year through a

separate order based on recommendations of the State level

Committee constituted by the Commission consisting of

representatives of Nodal Agency, State Government, Distribution

Page 4 of 9

Licensee and any other organisation(s) as decided by the

Commission. The fuel price for subsequent years would be fixed in

the manner to be specified in the Regulations to be framed for FY

15-16 onwards. The variable charges for FY 2014-15 shall be

determined as per provisions of regulation 84(1).”

(5) The note (iii) appearing below the sub-regulation 7(b)(xi) of

regulation 83 shall be replaced by the following:

“iii. In respect of sale of energy to the distribution licensee, the

metering for the purpose of energy accounting for Biomass and

Biogas energy plants shall be at the line isolator on the outgoing

feeder on HV side of the generator transformer.”

(6) Insertion of new sub-regulation 8: The following sub-regulation 8

shall be inserted after sub-regulation 7 of existing regulation 83 as

under:

“Norms for Generic Tariff determination for Biogas Power Projects

83(8) The performance parameters for determination of biogas

power plants for FY 2014-15 shall be as under:

For the purpose of generic tariff determination for Biogas Power

projects, the financial principles and other principles, as applicable

for Biomass power plants, shall also be applicable, except the

following:

Parameters Biogas Power Projects

(i) Capital Cost*

(Excluding capital subsidy of GoI of Rs 300

Lakh/MW)

Rs. 853 Lakh/MW

(ii) Specific Fuel Consumption 3 kg/kWh

(iii) Auxiliary Consumption 12%

Page 5 of 9

Note: Normative Capital Cost at Sr. no (i) includes transmission

system cost upto the interconnection point and connectivity

charges of Rs 2 Lakh/MW.

(iv) Plant Load Factor (PLF): Plant Load Factor for Biogas power

projects shall be 90%.

(v) Feedstock Cost: Feed stock price for the year FY 2014-15 shall

be Rs.1175/MT (net of any cost recovery from digester

effluent). The Feedstock price for subsequent years would be

escalated in the manner as specified by CERC. The variable

charges for FY 2014-15 shall be determined as per provisions of

regulation 84(2).

(vi) O&M Expenses: The normative O&M expenses for FY 2014-15

shall be Rs. 44.71 Lakh/MW.”

7. Amendments in Regulation 84:

Regulation 84 shall be replaced by the following:

“84. Fuel price mechanism for Biomass and Biogas power projects:

(1) The variable charges for Biomass based power projects for FY 2014-

15 after coming into the effect of ‘Rajasthan Electricity Regulatory


Tariff)(Seventh Amendment) Regulations, 2014’ shall be determined

as under:

VC = [Station Heat Rate (SHR)/Gross Calorific Value (GCV)] x [1/(1 –

Aux Consum. Factor)] x (P/ 1000)

P = Rs.2350 per Metric Tonne for FY 2014-15 or as determined as

per regulation 83(7)(b)(v).

(2) The variable charges for Biogas based power projects for FY 2014-15

after coming into the effect of ‘Rajasthan Electricity Regulatory

Page 6 of 9


Tariff)(Seventh Amendment) Regulations, 2014’ shall be determined

as under:

VC = [specific fuel consumption (kg/Unit)] x [1/(1 – Aux Consum.

Factor)] x (P/1000)

P = Rs.1175 per Metric Tonne for FY 2014-15.

8. Amendment in Regulation 89:

The existing regulation 89 shall be replaced by the following:

“89 Grid Connectivity

(1) Grid connectivity charges of Rs 2 Lakh per MW shall be payable by

Biomass and Biogas power plants to Transmission Licensee or

Distribution Licensee, as the case may be.

(2) The capacity of transmission lines for Non-firm power injection into

the State grid shall be limited to the capacity as per the standard

engineering practices.”


(1) Sub-regulation 1 of existing regulation 90 shall be replaced by the

following:

“(1) Import of power by generating companies:

Energy drawn by the generating station from the grid during

shutdown and outages, and for restarting, shall be set off

against the energy sold to the Distribution Licensee within the

State on a quarterly basis:

Provided that where sale to Distribution Licensee is not being

affected, such drawal from the grid shall be billed at HT

temporary tariff applicable to a Large Industrial Power

consumer on daily basis.”

Page 7 of 9


following:

“(2) kVArh charges:

Net kVArh drawal by Biomass and Biogas power plants from

the Grid shall be billed at 12 paise/kVArh w.e.f 01.04.2014

escalated annually at 0.50 paise/kVArh unless otherwise

revised by the Commission by Order.”


following:

“(3) Transmission & wheeling charges:

In case of third party sale or for captive use both within the

State or outside the State, the transmission charges and

wheeling charges shall be recovered in cash and transmission

losses and wheeling losses shall be recovered in kind as under:

(a) For use of transmission network, transmission charges and

losses as determined by the Commission in respect of

open access transactions would be applicable.

(b) For use of distribution licensee’s network, the wheeling

charges and losses as determined by the Commission in

respect of open transactions at respective voltage levels

at which electricity is supplied would be applicable.

(c) For use of both EHV and distribution network, both

transmission and wheeling charges as well as losses, as

applicable, shall be payable:

Provided that in case of Power Purchase Agreements

executed and plants commissioned upto 31.03.2007 under the

State Government Policies specified in regulation 82, the

charges as per Policy shall be applicable unless RE power

plant opts otherwise.”

Page 8 of 9

10. The existing regulation 91 shall be deleted.


The existing regulation 92 shall be replaced by the following:

“92. Banking

(1) Energy shall be allowed to be banked at consumption end for only

captive consumption within the State.

(2) Period of banking:

The banking shall be on monthly basis.

(3) Energy Accounting:

(a) RE Power Generator/Developer shall intimate to SLDC and to

the concerned Distribution Licensee on first day of every

month, out of available energy for that particular month, the

quantum of energy it wishes to bank for captive consumption

within the State:

Provided that where no such intimation is received on or

before first day of the month, the intimation last received

would become applicable for the month.

(b) The banked energy in a month shall not exceed the quantum

of energy injected in the grid in the month. In case the

energy injected in the month is lower than indicated banked

energy, the banked energy would be deemed to get

restricted upto the energy injected.

(c) The RE Power Generator/Developer would be entitled to get

payment @60% of energy charges applicable for large

industrial power tariff, excluding fuel surcharge, if any, in

respect of 10% of unutilized banked energy after the end of

month of banking. Unutilized banked energy, in excess of 10%

shall lapse.

Page 9 of 9

(4) The Distribution Licensee shall make the payment, if any, on or

before the last working day of the month, next to the relevant

month of banking, beyond which, the Late Payment Surcharge

(LPS) at the rate, as specified in these Regulations, would become

applicable.

(5) Banking charges at the rate of 2% of banked energy in each month

would be payable in kind.”

12. Insertion of new Regulation: A new regulation 135 shall be inserted after

the existing regulation 134 as under:

“135. Deviation from provisions of these Regulations

The Commission may deviate from any of the provisions contained

in these Regulations on a suo-motu basis having regard to the

circumstances of the case:

Provided that the reasons for such deviation shall be recorded in

writing.”

By Order of the Commission

Secretary

December 2013

Explanatory Memorandum for

Seventh Amendment in RERC Tariff

Regulations 2009

Rajasthan Electricity Regulatory Commission, Jaipur

Explanatory Memorandum Seventh Amendment Page | 1

1. Background

(1) In exercise of the powers conferred on it under Section 61 and Section 62

read with Section 181 of the Electricity Act, 2003 (No. 36 of 2003), the

Rajasthan Electricity Regulatory Commission, framed the RERC (Terms and

Conditions for Determination of Tariff) Regulations, 2009. The Control Period

specified was of five years ending on 31.03.2014.

(2) Even though India has one of largest agricultural bases in the world, and thus

an abundant source of feedstock, the development of the biomass for

power generation industry has been limited to only a few states at a low

pace. Unlike other RE technologies, bio-energy technologies like biomass

require feedstock as fuel for the power plant which in turn entails an

additional and significant cost to the project developer. Further, one of the

most important issues faced by the project developers is volatility of fuel cost.

(3) High and fluctuating cost of biomass is an issue impeding the growth of this

sector. The cost of biomass was very nominal in most of the States in early

2000. However, over the last decade, the increasing demand of biomass for

power generation as well as alternative uses in brick kilns and paper industry

and for cattle fodder and rural households, has created a demand-supply

gap in this sector, which in turn has inflated the price of biomass to very high

levels.

(4) Biomass power generation is subject to the volatile price movement of

biomass in the markets and is dependent on factors affecting such price

movement, including regional supply and demand, seasonality, rain, climate

change, crop productivity, labour shortages and alternative uses for biomass

fuel. Key drivers for increase in price include:

• Increase in alternative uses of biomass result in price escalation

• Unorganized and unregulated market leads to price inflation


(5) Transportation cost is one of the significant components of the overall cost of

supply. Because of limited service providers in the transportation domain,

there have been cases where outsourcing has lead to artificial price inflation.

(6) The Ministry of New and Renewable Energy (MNRE), vide its letter to the

Chairman, RERC dated 24th September 2013, has suggested that most of the

biomass power plants in Rajasthan are currently lying idle as the developers

are not finding the present tariff remunerative enough and are incurring

losses. MNRE has also requested RERC to take cognizance of the values and

recommendations suggested by the Committee constituted by the Central

Electricity Regulatory Commission (CERC) on 11th October 2012 under the

chairmanship of the Secretary, CERC to undertake a detailed study on the

“Performance/Viability of Biomass based plants operating in the country

including the prevailing biomass prices”.

(7) The Committee in its report dated 16th July 2013, has taken cognizance of the

prevailing issues plaguing the growth of power projects based on biomass in

the country. The Committee acknowledges and recognizes that biomass, as

segment of renewable energy, is facing problems.

(8) The Committee has stated that most of the Biomass power plants are being

operated with different kind of biomass mix either due to non availability of

the designed fuel or due to higher cost of these fuels, forcing them to

operate the plants with the available biomass sourced directly from the

fields, adversely affecting the performance of the boiler and their efficiency.

The Committee has also noticed that biomass plants, due to shortage of

biomass or due to poor quality of biomass are unable to run on full load,

adversely affecting the boiler efficiency and turbine cycle heat rate.

(9) The Committee expressed its view that the fuel pricing mechanism has to be

proper for the operation of the Biomass power plants, else the sector will not

be able to operate properly. This is a major problem and concern of the


Industry as also deliberated and submitted on various occasions. The

Committee recommends that the fuel prices be fixed at the beginning of the

year on independent survey, which can be conducted by State Nodal

agency, which is already there in all states. The Committee has considered

this be the most transparent and amicable fuel price mechanism. The

Committee, however, expressed that the State Nodal Agency must ensure

that the independent fuel price survey is conducted on time every year. This

would end all confusion and problems currently being faced by the Biomass

sector and is a rational solution to the fuel price fixing mechanism.

(10) The Committee has unanimously recommended that in the long run, in order

to resolve the issue on sustainable basis, to achieve long term fuel availability

and to achieve biomass price stabilization, plantation backed biomass

power plants need to be promoted. The Committee expressed the view that

no biomass power plants should be licensed without plantation.

(11) The investment in Biomass sector in the State has come primarily in two

phases. In phase-1 under Government Policy of 1999, four plants of total

capacity 31.3 MW had come. Thereafter, in phase-2, under Policy 2004, four

plants aggregating to a capacity of 50 MW were added during FY 2009-10

and FY 2010-11. Since then, the Biomass sector in the State has been

struggling in past few years. This is substantiated by the fact that in the years

2011-12 and 2012-13 not a single Biomass project has been commissioned in

the State for supplying energy to Distribution Licensees to meet their RPO

targets at the preferential tariff determined by the Commission and

Distribution Licensees have also not been in a position to achieve the RPO

target. The RPO achievement in FY 2012-13 has been 0.40% as against a

target of 1.25%. Taking the cognizance of the unprecedented rise in biomass

fuel price, Commission had revisited the same in Year 2011-12 and was

enhanced based on the study conducted by RREC. However, developers

have been raising the issue of inadequacy of biomass fuel prices through


their repeated representations. Besides, it is also observed that the most of

the plants set up in current MYT period since FY 2009-10 are also generating

power below their normative PLF.

(12) It is worth taking note of the fact that the Committee constituted by CERC, in

which Indian Biomass Association was also represented, in its report of July,

2013 has observed as under:

“2.7.5. ………..to achieve long term fuel availability and to achieve

biomass price stabilization, plantation backed biomass power plants need to

be promoted. Development of Prosopis – Juliflora/other energy plantation

on Government waste/ barren/ saline lands, Panchayat waste/ barren/

saline lands, degraded forest land, for use as supplementary fuel in Biomass

Power Plants should be encouraged. The Committee is of the view that no

biomass power plants should be licensed without plantation.”

(13) Considering the said categorical and strong recommendation of the

Committee, a decision also needs to be taken after the said assessment of

Bio-mass potential on linking in future the Bio-mass Power Plants with

plantation for ensuring fuel availability and price stability. Other related issue

is identification of the main bio-fuel in the State for future plants. In past, the

norms were worked out for mustard husk as the main Bio-mass fuel whereas

now Juliflora plants have also come up. A clarity needs to emerge as to what

would be the main Bio-mass fuel in future. This could also get assessed while

undertaking re-assessment of Bio-mass potential in the State.

(14) In the light of above uncertainty, the commission believes that it has become

imperative to reassess the biomass availability scenario and price fluctuation

trend in the state before coming out with new MYT Regulations. However, to

avoid the situation of regulatory uncertainty, arising out of the absence of

regulation; which can adversely affect the biomass and biogas project

developers currently in the process of installing power projects and also for

including enabling provision for fuel price adjustment for plants

commissioned during the control period of current MYT Regulations, the


Commission has decided to extend the RERC (Terms and Conditions for

Determination of Tariff) Regulations, 2009 for FY 2014-15 i.e., April 1, 2014 and

onwards up to March 31, 2015 along with some amendments including

provisions for Bio-gas plants. The Commission reiterating its commitment for

promoting biomass power projects in the state, thus, issues amendments in

the RERC (Terms and Conditions for Determination of Tariff) Regulations, 2009,

so as to support biomass and biogas power projects currently in pipeline.

2. Scope of the envisaged Amendment in the Existing RERC Tariff Regulations, 2009

(1) Apart from amendment to enable extension of existing RERC Tariff

Regulations, 2009 by one year for Bio-mass plants, some other amendments

would need to be incorporated for reasons given in following paras.

(2) As the capital cost under the existing Regulations is available only for plants

getting commissioned by FY 13-14, suitable amendment for adoption of

capital cost for plants getting commissioned in FY 14-15 is required. This

would entail suitable change in Regulation 83 (7) (b) of the existing

Regulations.

(3) Existing regulation 82 provides for tariff upto FY 13-14 in respect of Biomass

plants commissioned under Govt. of Rajasthan’s Policies. Necessary

amendment, therefore, is required in this regulation for specifying tariff for FY

14-15.

(4) As amended Regulations are envisaged to be made applicable to Biogas

plants also, norms and parameters for Biogas would need to be suitably

incorporated in regulation 83.

(5) Commission is of the view that while tariff related parameters by and large

need to be retained for Biomass projects on account of the current limited

exercise of extending existing control period by one year, the following

provisions of existing Regulations, which are also applicable to other RE

technologies like Wind and Solar, need to be modified in the light of


changes proposed in new MYT Regulations in respect of Wind and Solar

plants:

(a) Items like metering and other charges like kVArh charges, import of

power by generating company, transmission and wheeling charges

and Banking;

(b) Tariff for projects migrating from REC mechanism to preferential tariff

regime.

(6) Enabling provisions for switch over of a Biomass generator to preferential

tariff from the REC mechanism is also being incorporated on the same lines

as has been included in the draft MYT Regulations of Wind and Solar plants.

(7) It may be mentioned that the Commission has been determining tariff for

useful life of Bio-mass projects i.e. for 20 years, wherein annual energy

component is worked out based on 5% annual escalation in fuel price.

However, the Committee constituted by CERC at para 2.6.4 of its report of

July, 2013 has noted as under:

“2.6.4

Majority of the states followed a fuel price indexation mechanism and a 5 %

yearly escalation has been provided. But the current price prevailing for the

Biomass Plants reveals that an annual escalation of around 15 – 18 % has

been experienced due to abnormal prevailing financial conditions,

decontrol of diesel and petrol prices and is increasing by more than 100% in

the last 3 years, increase in inflation etc being some of the factors, which

have increased the fuel prices by more than 5% per annum. ”

(8) The Committee has recommended for evolving a fuel price review

mechanism and fuel pricing has been termed by the said Committee as a

major problem and concern of Bio-mass industries.

(9) Hon’ble APTEL in its judgment dated 2.12.2013 in the matter of M/s

Junagadh Power Projects Private Ltd., vs. Gujarat Electricity Regulatory

Commission and Ors. (Appeal No 132 of 2012 & IA nos. 247 & 248 of 2012

and Appeal no.133 of 2012 & IA nos. 249 & 250 of 2012), has observed that

State Commissions are even empowered to re-open the long term PPA and


directed GERC to re-determine the Bio-mass fuel price even in respect of

cases where 20 years PPA stands concluded with 5% annual escalation in

Bio-mass fuel price.

(10) As has been mentioned earlier, the Bio-mass plants in the State are also in

difficulty on account of the unprecedented increase in fuel prices in past

few years. Bio-mass developers have been representing on various

occasions on this issue and a petition No. 414/13 from M/s Transtech Green

Power Private Limited & Ors, in respect of viability of Bio-mass projects, has

already been filed with the Commission wherein, inter-alia, the fuel price

issue has also been very strongly articulated. It has further been submitted

that fuel price should not only be increased but a suitable mechanism also

needs to be provided to obviate the necessity of amendment in

Regulations, as and when fuel price is required to modified on the plea that

amendments in Regulation take quite a long time. They have argued that

fuel price adjustment should be made through an order of the Commission

instead of amendment in Regulations.

(11) In the light of position mentioned above as regards Bio-fuel pricing, the

Commission deems it appropriate to incorporate enabling provision in the

Regulations so that fuel price could be appropriately revised by the

Commission through an order.

3. Capital cost for Biomass Plants

Biomass power plants based on the Rankine cycle employ two type of

condensers, namely the water cooled condenser and the air cooled condenser.

In order to propose distinct norms for Capital cost for biomass power plants based

on Rankine cycle technology, the Commission has also considered the

regulations formulated by CERC.


(1) Capital Cost norms as approved by Central Electricity Regulatory

Commission (CERC)

(a) CERC in its RE Tariff Regulation, 2012 has specified the normative

capital cost for the Biomass based power projects employing water

cooled condensers as Rs.4.45 Cr/MW for the FY 2012‐13. Also, in the

above referred Regulations, CERC specified the indexation

mechanism in order to escalate the capital cost of base year (FY

2012-13) to determine the capital cost of biomass power projects

during the ensuing years of the control period.

(b) Based on the above consideration, CERC under its regulatory

dispensation issued the CERC RE Tariff Order 2013-14 wherein the

capital cost for biomass power plants for FY 2013-14 was determined

as Rs.463.33 Lakh/MW.

(2) Capital cost for Biomass power plants considered by RERC

(a) Commission, after consideration of CERC analysis and suggestions of

the stakeholders, had specified capital cost for Biomass based power

plants as Rs 5.22 Cr/MW employing water cooled condenser and Rs

5.57 Cr/MW employing air cooled condenser for FY 2013-14.

(b) Subsequently, the Committee constituted by CERC to undertake a

detailed study on the “Performance/Viability of Biomass based plants

operating in the Country including the prevailing prices” has

recommended Capital cost of Rs 540 Lakh/MW for Biomass projects

with water cooled condenser and Rs 580 Lakh/MW for air cooled

condenser for FY 2013-14. CERC in their recent Draft Notification

dated 6.12.2013, issued for First Amendment in their CERC (Terms and

Condition for Tariff determination from Renewable Energy Sources),

Regulations, 2013, has also proposed the capital cost for Biomass

projects (other than rice straw based project) with both water cooled


and air cooled condenser same as suggested by the Committee i.e.

Rs 540 Lakh/MW and Rs 580 Lakh/MW respectively.

(c) It is mentioned that CERC has specified the capital cost for country as

a whole, which may vary from State to State level. Further, there is a

policy support from the State Government also by way of cheaper

land. In consideration of above and the fact that Commission has

recently determined capital cost for FY 2013-14 after detailed

deliberations, Commission considers it appropriate to retain the

capital cost determined for FY 2013-14. However, for FY 2014-15, by

applying the indexation formula of CERC, the capital cost works out

to be Rs 526 Lakh/MW for Biomass projects with water cooled

condenser and Rs 561 Lakh/MW for Biomass power projects with air

cooled condenser respectively. Accordingly, Commission proposes

the capital cost of Rs 526 Lakh/MW for FY 2014-15 including

evacuation cost of Rs 15 Lakh/MW for Biomass projects with water

cooled condenser. This Rs 15 Lakh/MW also includes Rs 2 Lakh/MW for

connectivity charges. Similarly, capital cost of Rs 561 Lakh/MW is

proposed for Biomass projects with Air cooled condenser for FY 2014-

15.

4. Biomass Fuel Price

(1) Commission had specified a fuel price of Rs 1830/MT for FY 2011-12. This was

subject to a rise of 5% per annum for subsequent years of the current control

period.

(2) CERC in their CERC (Terms and Conditions for determination from

Renewable Energy Sources) Regulations, 2012 had specified a base fuel

price of Rs 2300/MT for FY 2012-13. This fuel cost is subjected to the fuel cost

indexation formula provided in the said Regulations. Subsequently, based

on their indexation mechanism, CERC has specified a Biomass fuel price of


Rs 2464.48/MT for FY 2013-14 for Rajasthan. If the indexation formula of CERC

is further applied with data available upto November 2013, the Biomass fuel

price for Rajasthan works out to be Rs 2730/MT for FY 2014-15.

(3) Commission has specified a biomass fuel price of Rs 2018/MT for FY 2013-14

considering 5% escalation on the base price of Rs 1830/MT for FY 2011-

12.When a further 5% is considered, Biomass fuel price works out to be Rs

2118/MT for FY 2014-15. Alternatively, considering Rs 1830/MT for FY 2011-12

as base and using CERC indexation mechanism with suitable base data

change, the fuel price for FY 2014-15 works out to be Rs 2352.07/MT.

(4) Based on the foregoing analysis, Commission considers it appropriate to

specify a fuel price of Rs 2350/MT for FY 2014-15 which shall also be

applicable to the Biomass power plants commissioned during the current

control period of 2009-2014.

(5) The Committee constituted by CERC, among other things, has also

recommended that Biomass fuel price is to be decided by a Committee to

be formed at State Level representing State Commission, Nodal Agency

and Government. CERC in their recent notification dated 6.12.2013, for first

amendment, has also proposed a similar provision of annual review by a

State Level Committee.

(6) In respect of review of the Biomass fuel prices, Commission proposes to

constitute a State Level Committee as suggested in the said CERC draft

notification consisting of representatives of State Nodal Agency, State

Government, Distribution Licensees and any other organisation(s) as may be

decided by the Commission. However, the nodal agency would need to

get Bio-mass fuel price and price variation trend surveyed again as the last

survey was undertaken in the year 2011. The said State Level Committee

may finalise its recommendations after examining the said survey report.


Based on recommendations of the Committee, the Commission proposes to

revise the fuel price prospectively in FY 2014-15. In the mean time, the

Biomass fuel price is envisaged as Rs. 2350/MT for FY 2014-15, to be revised

prospectively through a separate order of the Commission based on the

recommendations of the State level Committee. The fuel price for

subsequent years would be fixed in the manner to be specified in the

Regulations to be framed for FY 2015-16 onwards.

5. Technology Specific Parameters: Biogas Plants

(1) Eligibility Criteria

Norms for Biogas power project would be applicable for grid connected

system that uses 100% Biogas fired engine, coupled with Biogas technology

for co-digesting agriculture residues, manure and other bio waste as may

be approved by MNRE.

(2) Biogas Plant Technology

(a) Biogas, a mixture containing 55-65% methane, 30-40% carbon dioxide

and the rest being the impurities (H2, H2S and some N2), can be

produced from the decomposition of animal, plant and human waste.

It is a clean but slow burning gas and usually has a calorific value

between 5000 to 5500 kcal/kg. It can be used directly in cooking,

reducing the demand for the firewood. Moreover, the material from

which the biogas is produced retains its value as a fertilizer and can be

returned to the soil. Biogas has been popular on the name, “Gobar

Gas” mainly because cow dung has been the material for its

production, hitherto. It is not only the excreta of the cattle, but also the

piggery wastes as well as the poultry droppings are very effectively

used for biogas generation. A few other materials through which

biogas can be generated are algae, crop residues (agro-wastes),

garbage kitchen waste, paper wastes, human wastes, waste from the


sugar refinery apart from the above mentioned animal wastes. Any

cellulosic organic material of animal or plant origin which is easily bio-

degradable is a potential raw material for biogas production.

(b) Biogas is produced by digestion, pyrolysis or hydrogasification.

Digestion is a biological process, also known as bio-methanation,

occurs in the absence of oxygen and in the presence of anaerobic

organisms at ambient pressures and temperatures of 35-700C. The

container in which this digestion takes place is known as digester.

(3) Biogas Feedstock

(a) Biomass fuels available for Biomethanation include crop residues (with

higher cellulosic content), cow/poultry manure, food and agro industry

solid and liquid waste and segregated organic urban waste.

(b) The chemical composition of biomass varies for different substrates but

basically consists of high, but variable moisture content and relatively

high digestible organic dry solids (or volatile solids).

(4) Bio-Methanation Process

(a) Bio-methanation is a process in which biogas, along with bio compost

is produced by activity of anaerobic bacteria on organic matter

prevalent in biomass/ waste. Anaerobic bacteria occur naturally in

organic environments where oxygen is limited.

(b) Converting organic matter to methane gas by anaerobic digestion is

achieved by a three stage process.


(i) The first stage involves hydrolysis of the organic compounds. This

stage is also referred as ‘Enzymatic Hydrolysis’ wherein the fats,

starches and proteins contained in the cellulosic biomass are

broken down into simple compounds.

(ii) The second stage is acid formation, which is affected by group of

anaerobic bacteria-referred to as the acid formers. In this stage,

the complex organic compounds are broken down to short

chemical simple organic acids. In some cases, these acids may

be produced in large quantities that the pH may be lowered to a

level where all biological activity is arrested. This initial acid phase

of the digestion may last about two weeks and during this period

a large amount of carbon dioxide is given off.

(iii) The third stage involves a group of bacteria- known as methane

formers- that breaks down the organic acids and produces

methane as the by-product of the degradation of the organic

acids. For efficient digestion these acid formers and methane

fermentors must remain in the state of dynamic equilibrium. This

equilibrium is a very critical factor which decides the efficiency of

generation. It has been demonstrated that the methane formers


are sensitive to pH changes. A pH value between 6.5 to 8 is the

best for fermentation and normal gas production.

(c) The anaerobic digestion process produces biogas, whose constituents

are producing power and heat. The biogas produced by anaerobic

digestion, which is roughly about 52‐60 % methane, with CO2

comprising most of the remainder. Hydrogen Sulphide, which is present

in small amounts, gets converted into sulphate and then the sulphate is

reduced to form elementary sulphur by sulphate – reducing bacteria.

(d) The digester effluent contains the non digestible organic matter

(humus) and inorganic matter (essentially major & micro nutrients

which can be used for soil fertility management.

(5) Basic Processes and Energetics

The general equation for the anaerobic digestion is:

For cellulose this becomes

O

Some organic material (e.g. lignin) and all inorganic inclusions do not digest.

These add to bulk of the material, form a scum and can easily clog the

system. In general 95% of the mass of the material is water. The reactions are

slightly exothermic, with typical heats of reaction being 1.5MJ per kg dry

digestible material, equal to about 250KJ per mole of C6H10O5.

(6) Biogas Plant Design

The Biogas Plant design depends upon type of substrates that are used for

biogas production and also the temperature range at which the anaerobic

digestion processes are controlled. The pre‐proven designs are:


Upflow Anaerobic Sludge Blanket (UASB)-Upflow anaerobic sludge

blanket (UASB) reactor is one of the anaerobic reactors for both high and

low temperature. UASB reactor, in the past, has been the most widely used

system for anaerobic treatment of distillery spent wash/food industry

effluents and sewage. The digesters have extremely high volumetric

efficiency and the nature of substrates eliminates the need of feedstock

preparation, substrate mixing, stirring within digesters, recycling etc.

Consequently these have the advantage of lower capital cost as well as

O&M cost. However, UASB reactor cannot be used for co-digestion of

crop/agriculture residues, manure, food industry waste etc., which have

significantly higher dry solids content.

Continuous flow, fully mixed Digesters: These find application in

substrates with high dry solids content. The efficiency being improved

through technological interventions in feedstock preparation, ability to

co‐digest substrates, substrates mixing, controlled dosing of substrates,

proportionate stirring within digesters and process control to optimize

production of CH4 and minimizing production of NH3 & H2S. In the past

decade there has been significant evolution in plant technology and

design resulting in high biogas yield and PLF in excess of 90%. A key physical

factor for successful anaerobic digestion is the temperature and the proven

plant designs are with following temperature ranges.

Mesophilic Temperature: The mesophilic temperature range (35‐38oC) is

the optimal temperature for a large number of methane forming

microorganisms for production of Biogas. Mesophilic bacteria can tolerate

temperature fluctuations of +/−3 °C without significant reductions in

methane production. The HRT of this temperature range is 30‐40 days. In the

mesophilic temperature range, the dewatering properties are high and

requires low amount of energy for heating the digester. The thermal

destruction of bacteria is also very low in the mesophilic temperature.

Hence the microorganisms are stable in this temperature and produce

more biogas.


Thermophilic Temperature: In thermophilic anaerobic digestion, the

temperature (55‐60oC) has to be maintained inside the digester which

requires lot of energy. The thermophilic bacteria are more sensitive to

temperature fluctuations and require longer time to adapt to a new

temperature. The growth rate of methanogenic bacteria is higher at

thermophilic process making the process faster and more efficient.

Therefore, a well‐functioning thermophilic digester can be loaded to a

higher degree or operated at a lower hydraulic retention time (HRT) than at

mesophilic conditions. But the thermophilic process temperature results in a

larger degree of imbalance and a higher risk for ammonia inhibition.

(7) Capital Cost

The capital cost of the Biogas based power plant includes cost of two

process units i.e. Gas Production Facility and Gas Fired Power Plant

(a) Capital Cost norms as approved by CERC and other SERCs

(i) CERC in its RE Tariff Regulation, 2012 has specified the normative

capital cost for the Biogas based power projects as Rs.1100.00

Lakh/MW for the FY 2012‐13 and after taking into account of capital

subsidy of Rs. 300.00 Lakh/MW, net project cost was determined as

Rs.800.00Lakh/MW for the FY 2012‐13.

(ii) Thereafter, CERC under its regulatory dispensation issued the CERC

RE Tariff Order 2013-14 wherein the capital cost for the biogas power

projects was linked to the indexation mechanism specified in the

above referred regulation and subsequently, determined net capital

cost as Rs.845.325 Lakh/MW for FY 2013-14.

(iii) TNERC vide its order dated 28th September, 2012 determined a

project specific tariff for Biogas Power Project wherein project cost

was approved at Rs.8 Crore/MW (on accounting the MNRE subsidy


and the evacuation cost upto the inter-connection point) for poultry

liter based Biogas Power Plant.

(iv) Haryana Electricity Regulatory Commission (HERC) vide its order

dated 5th July, 2011 determined a project specific tariff for Biogas

Power Project wherein project cost was approved at 10.9 Crore/MW

(Rs 4.36 Crore for a 400 kW) for a cow dung based Biogas Power

Plant which included the digester effluent treatment systems and

power evacuation system. Aggrieved by this impugned order of the

State Commission, the Appellant filed an appeal before Appellate

Tribunal for Electricity (ATE). However, ATE in its detailed judgment on

April 3, 2012, endorsed the decision of State Commission and

pronounced that capital cost would remain as Rs.10.9 Crore/MW.

(v) Uttaranchal Electricity Regulatory Commission (UERC) in its RE Tariff

Regulations, 2013 had also specified the capital cost for the power

projects based on biogas technology as Rs. 1100 Lakh/MW for the

first year of the control period.

(b) Actual Project cost collected from various sources

(i) Rajasthan Renewable Energy Corporation Ltd., (RREC) in its

petition to RERC for determination of the generic tariff for

purchase of the electricity from biogas based power plant

submitted that the project cost for a 2MW biogas power plant,

with cattle dung and Agri-Residues as the key feedstock is Rs.22

Crore, or Rs.11Crore/MW. RREC in their petition requested the

Commission to consider a capital cost of Rs 11.43 Cr for 1 MW

Biogas Power Plant for FY 2013-14. RREC further requested that

CERC had not considered the cost of transmission infrastructure

from the generating station to distribution/transmission licensee

substation and also requested specify suitable cost indexation


mechanism for the future in order to reflect the inflation in the

economy as specified by the CERC in its RE Tariff Regulations,2012.

(ii) MNRE vide its letter dated September 30, 2011 suggested capital

cost for bio‐methanation based projects at Rs.8‐12 Crore/MW.

MNRE earlier referred to CERC, vide letter dated 7.12.2010, a

request letter of Gramin Abhirudhi Mandi, Bangalore wherein

project cost suggested at Rs.10 Crore/ MW.

(c) Capital Subsidy from MNRE

(i) Capital subsidy from MNRE, as per their circular F.No.10/1/2011-U&I

dated 2nd May 2011 is Rs. 3 Crore/MW (limited to Rs. 6

Crore/project) for Biogas Plants with feedstock mix of cattle dung,

vegetable market & slaughter house waste along with agriculture

wastes/residues. Financial support is provided after successful

commissioning of projects.

(ii) MNRE vide its circular F.No.2/1/2008-UICA dated 26th April 2010

stipulated capital subsidy of Rs.1.5 Crore per MW (subject to

ceiling of Rs.5 Crore/project) for Biogas Plants with feedstock of

industrial waste (which includes poultry manure).

(d) Proposed Capital Cost

CERC has specified a capital cost of Rs 11.45 Cr/MW for Bio gas power

projects for FY 2013-14. This capital cost, on applying capital cost

indexation of CERC based on WPI indices for steel and Electrical

Machinery available upto October ’13, works out to be Rs 11.53 Cr/MW.

Considering that most of the projects would be of small capacity

projects and would be employing feedstock of agriculture residues, cow

manure and other bio waste, the Commission is of the view that the


capital cost of Rs.11.53 Crore/MW for 1 MW Biogas Power Plant, which is

the representative rating of Biogas plants which employs cow manure

as a key feedstock, appears to be appropriate. RREC had requested to

consider transmission cost in their petition, however, CERC capital cost

also includes the transmission cost. Therefore, on adjusting the subsidy of

Rs.3 Cr/MW provided by MNRE, the Commission proposes to consider Rs.

8.53 Cr/MW as the net project cost of biogas power plant for FY 2014-15

including evacuation cost and grid connectivity charges of Rs 2

Lakh/MW payable to Transmission or Distribution Licensee, as the case

may be.

(8) Specific Fuel Consumption

(a) In case of Biogas Power Plants the specific fuel consumption is a

function of Biogas yield from Biogas Plant and thereafter efficiency of

the Gas Engine‐ Generator set.

(b) CERC in its RE Tariff Regulation, 2012 has specified the specific fuel

consumption for the Biogas based power projects as 3kg/kWh.

(c) HERC in its order dated September 21, 2010, has specified 4.21

kg/kWh as specific fuel consumption based on the petition filed by

M/s. Green Indus Bio Energy Pvt. Ltd for 5.6 MW poultry litter based

biogas power plants.

(d) TNERC vide its order dated September 28, 2012 determined a project

specific tariff for Biogas Power Project wherein specific fuel

consumption was approved at 3 kg/kWh for poultry liter based Biogas

Power Plant.

(e) RREC in their petition requested for a specific fuel consumption of 3

kg/kWh.


(f) Considering above, the commission proposes to consider specific fuel

consumption of 3 kg of substrate mix per kWh generated.

(9) Feedstock Cost

(a) CERC in its RE Tariff Regulation, 2012 has considered feed stock price

for Biogas plants during 2012-13 to be Rs.990/MT, which is net of any

cost recovery from digester effluent. Thereafter, CERC under its

regulatory dispensation issued the CERC RE Tariff Order 2013-14

wherein the fuel cost for the biogas power projects was linked to the

indexation formula stipulated in the above referred regulation and

subsequently determined fuel cost as Rs.1060.80/MT for FY 2013-14.

(b) If the indexation formula of CERC is applied over the fuel price of Rs

1060.80/MT for FY 2013-14, it works out to be Rs. 1175/MT for FY 2014-15.

(c) RREC in their petition has requested to consider the norms for the

feedstock mix cost, net of by-product cost recovery, as Rs 1070 per MT

for FY 2013-14. For subsequent years, RREC requested to provide

suitable escalation mechanism as provided in the CERC RE Tariff

Regulations, 2012.

(d) Considering the above, the Commission is of the view to adopt the

similar approach followed by CERC in ascertaining the price of

feedstock. Hence, applying the indexation of CERC with data

available upto the November 2013, the biogas fuel cost for FY 2014-15

works out to Rs 1175/MT. Therefore, Commission proposes the

feedstock mix cost, net of by‐product cost recovery, as Rs.1175/MT for

FY 2014-15. The feedstock price for subsequent years would be

escalated in the manner as specified by CERC.


(10) Plant Load Factor

(a) CERC in its RE Tariff Regulation, 2012 has considered the plant load

factor for Biogas power plants as 90%.

(b) HERC in its order dated 5.7.2011 approved Plant Load Factor at 85% for

biogas based power plant.

(c) MNRE vide letter dated 7.12.2010 submitted a request from Gramin

Abhirudhi Mandli, Bangalore to CERC for determining generic tariff for

the biogas based power plant wherein Plant Load Factor was

proposed at 90%.

(d) RREC in their petition in consideration of availability of distribution

network has requested to consider a PLF of 80% for Bio gas based

power plants.

(e) Considering that CERC has considered a PLF of 90% in their Regulations

and MNRE has also suggested a PLF of 90%, Commission proposes PLF

of 90% for Biogas based power plants for FY 2014-15.

(11) Auxiliary Consumption

(a) CERC in its RE Tariff Regulation, 2012 has considered auxiliary

consumption for Biogas power plants as 12%.

(b) TNERC has proposed normative Auxiliary Consumption at 12%

considering special nature involved in biogas based plant such as

effluent treatment system etc.

(c) MNRE vide letter dated 7.12.2010 submitted a request from Gramin

Abhirudhi Mandli, Bangalore to CERC for determining generic tariff for


the biogas based power plant wherein auxiliary power consumption

for biogas power projects is proposed as 13%.

(d) RREC in their Petition has requested to consider normative auxiliary

consumption of 12% for Biogas based power plants.

(e) Considering above, the Commission proposes to consider auxiliary

power consumption at 12% for FY 2014-15.

(12) O&M Expenses

(a) Biogas Power Plants comprises Biogas Production unit and Power unit,

the overall O&M costs needs to be considered in two parts. First part

relates to regular maintenance of Biogas Plant, Engine gen set, etc.

and the other part relates to manpower for regular operations and

maintenance.

(b) CERC in its RE Tariff Regulation, 2012 has specified the normative O&M

expense for Biogas based power projects as Rs.40 Lakh/MW for the FY

2012‐13 which shall be escalated by 5.72% per annum throughout the

remaining years of control period. Accordingly, for FY 2013-14 O&M

cost was determined at Rs. 42.29 Lakh/MW. The O&M Expenses when

escalated at rate of 5.72%, would work out to be Rs 44.71 Lakh/MW for

FY 2014-15.

(c) HERC in its order dated 5.7.2011 allowed Rs. 8.1 Lakh as O&M

expenses for 400 kW biogas based power plant considering the norm

as specified by the CERC for 2009‐10 for biomass based power plant

with Rankine cycle technology. Aggrieved by this impugned order of

the State Commission, the Appellant filed an appeal before

Appellate Tribunal for Electricity (ATE). However, ATE in its detailed

judgment on April 3, 2012, stated that CERC in its notified regulations


has adopted Rs 4.0 Million/MW as O&M expenditure. Prorating Rs 4.0

Million/MW to 400 kW would work out to be Rs 1.6 Million, which

appears to be quite reasonable to meet employee cost and other

expenses. The Tribunal in its judgment also mentioned that the State

Commission has not framed Regulations for determination of tariff for

Biogas based projects and therefore, the State Commission may

adopt the norms specified in the Central Commission’s Regulations,

2012.

(d) TNERC while determining the project specific tariff of biogas power

plant has proposed norm for operations & maintenance cost at 3% of

the total project cost with 5% escalation cost and 0.5% for insurance.

(e) RREC in their petition has requested for O&M Expenses of Rs 42.29

Lakh/MW for FY 2013-14.

(f) CERC has worked out O&M expenses of Rs 42.29 Lakh/MW for FY 2013-

14. Considering an escalation at the rate of 5.72%, the O&M Expenses

work out to be Rs. 44.71 Lakh/MW for FY 2014-15. Considering the

above, the Commission proposes Operation and Maintenance

Expenses for biogas power plant as Rs 44.71 Lakh/MW for the FY 2014-

15, which shall be escalated at the rate of 5.72% for the tariff period of

the Biogas projects commissioned during FY 2014-15.

6. Principles for Biomass Projects under Government of Rajasthan Policy and REC

Regulations

(1) Tariff for projects under Government of Rajasthan (GoR) Policy

(a) Projects under GoR Policy of 1999:

(i) Government of Rajasthan promulgated the Policy for promoting

generation through non conventional sources, 1999 wherein, it


specified the tariff for procurement of the biomass power by the

distribution licensee. The salient features of the policy with respect to

biomass power and the tariff accorded thereof for the biomass

power procurement has been tabulated below:

Particulars For Projects Commissioned Tariff Period

Group I

projects

From 1998-99

To 30.09.2008

Tariff valid for period upto 1998-99 to 2013-14

Tariff for such plants

Renewable Energy generation during the year Tariff (Rs./kWh)

1998-99 2.7500

1999-00 2.8875

2000-01 3.0319

2001-02 3.1835

2002-03 3.3426

2003-04 3.5098

2004-05 3.6853

2005-06 3.8695

2006-07 4.0630

2007-08 4.2662

2008-09 4.4795

2009-10 4.7034

2010-11 4.9386

2011-12 5.1855

2012-13 5.4448

2013-14 5.7171

(ii) Biomass Tariff comprises of fixed cost as well as energy charges as

fuel is used in this RE resource as distinct from wind and solar tariff

where there is no fuel component. The fuel prices in past have gone

up significantly. The Govt. Policy allows 5% annual increase in tariff.

Considering the fact that fuel prices have appreciated considerably,

the Commission deems it appropriate to retain the same tariff for FY

2014-15, as applicable as per Govt. Policy. Accordingly, the tariff for

such projects for FY 2014-15 shall be Rs 6.0029 per kWh.

(2) Tariff for projects migrating from REC mechanism to preferential tariff regime

(a) Following the formulation of CERC REC Regulation 2010, the trading of

RECs got started in the country during March 2011. It was only in FY 2011-


12, the first biomass power project of 10MW in Rajasthan got registered

under the REC regime.

(b) However, of late it has been observed that REC market in the country

has not picked the anticipated pace and therefore, most of the RECs

traded during the recent times are not sold even at the floor price. This

has severely affected the financial viability of such projects resulting in

switchover of projects from REC mechanism to preferential tariff regime.

(c) The Commission under its regulatory dispensation promulgated the RERC

(Renewable Energy Certificate and Renewable Purchase Obligation

Compliance Framework) Regulations, 2010 wherein switchover of

projects registered under REC mechanism to preferential tariff regime is

envisaged. The relevant extract of the provision 12(2) of the

aforementioned regulation is reproduced below:

“In case REC mechanism is repealed/expires or RE generator on his own

opts out of the REC mechanism, RE generator can switch over to the

preferential tariff mechanism subject to accommodate the same in the

RPO target of the licensee at a tariff to be determined by the

Commission and/or sell renewable energy at mutually agreed price to

other obligated entities:

Provided that sub-regulation (2) of this regulation shall not be applicable

to an entity whose accreditation/registration has been revoked by

State/Central Agency”

(d) In the light of the above, the Commission needs to fix tariff for switch

over of a project from REC mechanism to preferential tariff regime. It is

proposed that in case a Biomass generator desires to switch over from

the REC mechanism to preferential tariff mechanism under regulation

12(2) of RERC (Renewable Energy Certificate and Renewable Purchase

Obligation Compliance Framework) Regulations, 2010, the year wise

generic tariff determined in accordance with RERC Tariff Regulations

2009 including amendments thereof for sale of energy to Distribution


Licensee in respect of the plants commissioned in the year in which the

said generation plant was commissioned shall be applicable for its

remaining years of useful life from the date of such switch over.

7. Others

(1) Metering

The Commission proposes that in respect of sale of energy to the distribution

licensee, the metering for the purpose of energy accounting for Biomass and

Biogas energy plants shall be at the line isolator on the outgoing feeder on HV

side of the generator transformer. Accordingly, note (iii) appearing below the

sub-regulation 7(b)(xi) of regulation 83 is proposed to be replaced.

(2) Other Charges

(a) kVArh charges: On account of revision in kVArh charges in IEGC, the

provision for net reactive charges has been revised. It is proposed that Net

kVArh drawal by such plant from the Grid be billed @ 12Paise/ kVArh w.e.f.

01.04.2014 escalated at 0.50 paise/kVArh, unless otherwise revised by the

Commission by Order.

(b) Import of power by Generating Company: Looking to the difficulty faced in

the implementation in the existing regulation due to lack of clarity vis-a-vis

the provision, the existing provision is being modified as under:

“ (1) Import of power by generating companies:

Energy drawn by the generating station from the grid during

shutdown and outages, and for restarting, shall be set off against the

energy sold to the Distribution Licensee within the State on a quarterly

basis:

Provided that where sale to Distribution Licensee is not being

affected, such drawal from the grid shall be billed at HT temporary

tariff applicable to a Large Industrial Power consumer on daily basis.”


(c) Transmission & wheeling charges:

(i) With a view to promote RE growth in the State, the existing Regulations

provide for concessional transmission and wheeling charges in respect of

RE power stations for third party sale or captive use within the State. RE

generation in the past few years has shown considerable growth and main

RE resources of the State such as Wind and Solar are moving towards

maturity.

(ii) Considering the said position, the draft MYT Regulations for the next control

period i.e. FY 2014-15 to FY 2018-19 for Wind and Solar plants stipulate that

normal transmission and wheeling charges, for both intra-state and inter-

state transactions, would be applicable.

(iii) A similar provision, for the sake of uniformity across the RE technologies, is

proposed in the sub-regulation 3 of existing regulation 90 also, which is as

under:

“(3) Transmission & wheeling charges:

In case of third party sale or for captive use both within the State or

outside the State, the transmission charges and wheeling charges shall

be recovered in cash and transmission losses and wheeling losses shall

be recovered in kind as under:

(a) For use of transmission network, transmission charges and losses as

determined by the Commission in respect of open access

transactions would be applicable.

(b) For use of distribution licensee’s network, the wheeling charges

and losses as determined by the Commission in respect of open

access transactions at respective voltage levels at which

electricity is supplied would be applicable.

(c) For use of both EHV and distribution network, both transmission

and wheeling charges as well as losses, as applicable, shall be

payable:

Provided that in case of Power Purchase Agreements executed and

plants commissioned upto 31.03.2007 under the State Government


Policies specified in regulation 82, the charges as per Policy shall be

applicable unless RE power plant opts otherwise.”

(d) Banking:

The Commission in its draft MYT Regulations for the next control period has

proposed banking provisions for Wind and Solar power plants only for

captive use. Accordingly, Commission considers it appropriate to

introduce similar provisions for Biomass power plants also. Therefore, the

banking provisions at existing regulation 92 are proposed to be replaced

as under:

“92. Banking

(1) Energy shall be allowed to be banked at consumption end for only

captive consumption within the State.

(2) Period of banking:

The banking shall be on monthly basis.

(3) Energy Accounting:

(a) RE Power Generator/Developer shall intimate to SLDC and to the

concerned Distribution Licensee on first of every month, out of

available energy for that particular month, the quantum of

energy it wishes to bank for captive consumption within the State:

Provided that where no such intimation is received on or before

first of the month, the intimation last received would become

applicable for the month.

(b) The banked energy in a month shall not exceed the quantum of

energy injected in the grid in the month. In case the energy

injected in the month is lower than indicated banked energy, the

banked energy would be deemed to get restricted upto the

energy injected.

(c) The RE Power Generator/Developer would be entitled to get

payment @60% of energy charges applicable for large industrial

power tariff, excluding fuel surcharge, if any, in respect of 10% of

unutilized banked energy after the end of month of banking.

Unutilized banked energy, in excess of 10% shall lapse.


(4) The Distribution Licensee shall make the payment, if any, on or before

the last working day of the month, next to the relevant month of

banking, beyond which, the Late Payment Surcharge (LPS) at the

rate, as specified in these Regulations, would become applicable.

(5) Banking charges at the rate of 2% of banked energy in each month

would be payable in kind.”

Documents

Rajasthan Electricity Regulatory Commissionrerc.rajasthan.gov.in/cnpl/PDFs/biogas.pdfRajasthan Electricity Regulatory Commission Vidyut Viniyamak Bhawan, Near State Motor Garage, Sahkar