All About Renewables

Nagaland Electricity Regulatory Commission
(Terms and Conditions for Determination of Generation Tariff for Renewable Energy) Regulations, 2011

HIGHLIGHTS

Tariff period	35 years – small hydro below 5 MW and mini/Micro hydro. 25 years – solar PV, solar thermal and other small solar projects. 20 years - biomass gasifier and biogas. 13 years –other technologies.
Control Period	3 years (first year upto end of FY 2014-15). Till the next notification, this shall be continued.
Useful Life of a Plant	35 years – mini/micro and small hydro. 25 years – wind, solar PV (rooftop and small ground-mounted), solar thermal and other solar technologies. 20 years – biomass power projects, non-fossil fuel based cogeneration.
Technology-wise Tariff	Project specific tariff, for generation of electricity from renewable energy sources on case-to-case basis, in accordance with relevant Regulations/Orders. The financial norms as specified under Tariff Regulations, except for capital cost and O&M cost, shall be ceiling norms while determining the project specific tariff.
Capital Cost	Technology	Capital Cost (Rs. lakh/MW)
	Wind (FY 2010-11)	467
	Small hydro below 5 MW	635
	Small hydro (5 MW to 25 MW)	571
	Biomass based on Rankine cycle technology (with water cooled condenser)	403
	Non-fossil fuel cogeneration	398
	Solar PV	1690
	Solar thermal	1530
	Biomass gasifier	550
	All capital costs (in Rs. lakh/MW) are for first year of control period (FY 2010-11).
Operation and Maintenance Expenses (O&M)	Technology	Cost (Lakh Rs./ MW/Year )
	Wind	6.87
	Small hydro below 5 MW	22.20
	Small hydro (5 MW to 25 MW)	15.86
	Biomass based on Rankine cycle technology	21.41
	Non-fossil fuel based cogeneration	14.11
	Solar PV	9.00
	Solar thermal	13.00
	First year of control period (FY 2010-11), and escalated @ 5.72% per annum over the tariff period.
Interest Rate on Loans	Loan repayment period – 10 years. No moratorium considered. Long-term prime lending rate (LTPLR) of State Bank of India (SBI) prevalent during the previous year plus 150 basis points.
Depreciation	Maximum– 90%. Salvage value -10%. Salvage value of the asset shall be considered as 10%, and depreciation shall be allowed up to maximum of 90% of the capital cost of the asset. 7% p.a. for first 10 years for project, balance shall be spread over the remaining useful life of the project from 11th year onwards.
Return on Equity	Value base of equity: 30% of capital cost or actual equity. Normative RoE: Pre-tax 19% p.a. for first 10 years, and 24% p.a. from 11th year onwards.
Interest on Working Capital	Average State Bank short-term PLR (SBAR) during the previous year plus 100 basis points.

OTHER PROVISIONS

Tariff Structure and Design	Single part, levelised, project specific tariff, for generation of electricity from renewable energy sources on case-to-case basis, in accordance with relevant Regulations/Orders. The financial norms as specified under Tariff Regulations, except for capital cost and O&M cost, shall be ceiling norms while determining the project specific tariff.
Merit Order Despatch Principle	All renewable energy power plants, except biomass plants of 10MW and above and non-fossil fuel cogeneration plants, are treated as ‘Must Run’ power plants. Biomass plants with capacity above 10MW shall be subject to scheduling.
Subsidy or/and Incentives by government	Any incentive or subsidy provided by the central or state government including accelerated depreciation benefit would be taken into consideration.
Rebate	2% - for payment through letter of credit. 1% - for payments not through letter of credit but within 1 month from the date of presentation of bills.
Late payment surcharge	1.25% per month, for payment of bills beyond a period of 60 days from the date of billing.
Links	http://www.nerc.org.in/index.php?option=com_content&view=category&layout=blog&id=41&Itemid=2
References	Nagaland Electricity Regulatory Commission (Terms and Conditions for Determination of Generation Tariff for Renewable Energy) Regulations, 2011 www.nerc.org.in/images/nercdoc/7.doc

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