Tariff of refuse-based power plants fixed at ₹7.84/unit

It is applicable to units that will become commercially operational between 2020-21 and 2023-24

Updated - April 28, 2020 11:25 pm IST

Published - April 28, 2020 06:55 pm IST - HYDERABAD

With a view to encouraging generation of power from solid waste in cities in the State, particularly in Hyderabad, Telangana State Electricity Regulatory Commission (TSERC) has determined the generic tariff for electricity generated by Refuse Derived Fuel (RDF)-based power projects at ₹7.84 per unit.

However, the levelised tariff for the RDF-based waste-to-energy (WtE) projects is applicable to plants which would become commercially operational during in the 2020-21-2023-24 period. In its recent order, the regulatory commission has fixed the traiff that comprises fixed cost of ₹3.42 per unit and variable cost of ₹4.42 per unit, for the sale of energy to the two distribution companies in the State for 20 years from the date of commercial operation.

The commission had initiated a suo motu exercise to determine the generic tariff for RDF-based WtE projects and issued a public notice on March 20 inviting written suggestions, objections and comments from all stakeholders by April 15. In response, the commission received suggestions/comments from 15 stakeholders in time and four subsequently.

On some stakeholders’ view that the capital cost proposed for the RDF-based WtE projects at ₹9 crore per MW was very low since it was in the range of ₹15 crore per MW to ₹22 crore per MW for existing projects in different parts of the country, including ₹20 crore per MW for the project coming up in Hyderabad, the commission noted that the tariff fixed would help recover the capital cost of more than ₹20 crore per MW even at the levelised tariff of ₹7.39 per unit.

The commission has approved the plant load factor (PLF) of 65% for first year, 75% for second year and 80% from third year onwards, against the stakeholders’ suggestion for PLF ranging from 65% to 75%. Further, it did not subscribe to stakeholders’ submission for providing incentive for achieving PLF higher than approved percentage.

In the matter of operation and maintenance expenses, the commission approved them at 5% of capital cost with annual escalation of 5.72% against the stakeholders’ suggestion in the range of 6% to 9% and 5% to 7.5%, respectively. On the rate of return on equity (RoE), the commission approved it at 16% on post-tax basis against the stakeholders’ view of 20% for first 10 years and 24% for the next 10 years.

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