Sanjay Jog
Mumbai: The Central Electricity regulatory Commission (CERC) will hold hearing on Wednesday on the renewable energy tariff and CDM sharing. CERC’s move is crucial as it has prepared regulations for the tariff determination from renewable energy sources to be transported to more than one state and they were circulated for seeking objections and suggestions. At present, about 14,000 mw of renewable energy is installed in the country comprising 10,000 mw of wind power mostly confined to Tamil Nadu and Rajasthan. About 4,000 capacity of micro hydel, cogeneration, solar and biomass are situated in various parts of the country.
According to CERC sources, the tariff for renewable energy technologies would be single part tariff consisting of fixed cost components that include return on equity; interest on loan capital; depreciation; interest on working capital and operation and maintenance expenses. The normative capital cost for the non-fossil fuel based cogeneration projects would be Rs 4.45 crore per mega watt for the first year of control period (FY 2009-10). The normative capital cost for setting up solar thermal power project would be Rs 13 crore per mega watt for FY 2009-10.
CERC’s draft says the proceeds of carbon credit from approved CDM project will be shared between generating company and concerned off-taker in the following manner, namely: 100% of the gross proceeds on account of CDM benefit to be retained by the project developer in the first year after the date of commercial operation of the generating station. Further, in the second year, the share of the beneficiaries shall be 10% which shall be progressively increased by 10% every year till it reaches 50%, where after the proceeds shall be shared in equal proportion, by the generating company and the beneficiaries. CERC has laid down draft notification for determining tariff for renewable energy which would be transported to more than one state.
However, industry sources admitted that CDM sharing is one of vital issue. DR Energy director D Radhakrishna told FE, “This is first United Nation project which is inviting direct private party participation for environmental benefits. States or for that matter discoms have no role to play in getting technological transfer or financial transfer as beneficiaries are directly negotiating CDM benefits. Also, CDM benefit is not only confined to electricity sector but also with agriculture sector and forest sector besides stand alone generator who are using it for self. Thus additionality of business need to be given to beneficiary. The Centre is already getting IT for this additional revenue. Thus, it will be wrong precedence to set up such example for other sectors.”
Moreover, industry sources said renewable energy obligations as laid down by CERC are state specific and is quite difficult for renewable energy promoters to function. “For instance, if biomass of 50 km area are falling between two states then same biomass is used but rates differ state to state. Take for example, biomass production at Gondia which is in Maharastra—if some one wants to generate power then for him the best choice will be Madhya Pradesh as they give better tariff than surrounding states of Chattisgarh and Maharastra. Similarly at Karnataka border where open access for sugar mills are allowed and sugar plant owners located at adjoining states of Maharastra and Andhra Pradesh get lower rates for Baggase by respective regulatory commissions,” he said.
Source: The Financial Express
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