Biogas

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: rercjpr@yahoo.co.in

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 20
th
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 29
th
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(Not to be published)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 licensees 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 24
th
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 11
th
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 16
th
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 Rajasthans 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) Honble 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 201213. 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 35-70
0
C. 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 5260 % 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 preproven 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
codigest 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 (3538oC) 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 3040 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 (5560oC) 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 wellfunctioning 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 201213 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 201213.

(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 28
th
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 biomethanation based projects at Rs.812 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 26
th
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 byproduct 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
201213 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 200910 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 Commissions 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 licensees 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.

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