CSERC Issues Draft Regulations on Terms and Conditions for Tariff Determination of Renewable Energy Sources 2024

Posted On - 2 December, 2024 • By - King Stubb & Kasiva

Introduction

The Chhattisgarh State Electricity Regulatory Commission (CSERC) has issued draft regulations for determining tariffs for renewable energy sources in 2024.[1] These regulations aim to promote renewable energy projects and ensure the sector’s long-term sustainability.  

Explanation (Key Points)

  • The regulations cover various renewable energy sources, including hydro, wind, solar, biomass, and municipal waste-to-energy.  
  • Tariffs for renewable energy projects will be determined on a project-specific basis, except for small hydro, solar PV projects up to 2 MW, biogas-based power projects, and non-fossil fuel-based co-generation power projects, which will have generic tariffs.  
  • The regulations define project-specific tariffs as those determined on a case-by-case basis by the Commission.  
  • They emphasize that the norms and parameters specified in the regulations are ceiling norms, allowing for improved norms to be agreed upon by the project developer and the beneficiary.  
  • The regulations provide a clear and transparent framework for tariff determination, outlining the various cost components that will be considered, such as capital cost, operation and maintenance expenses, and fuel costs.
  • To ensure the financial viability of renewable energy projects, the CSERC has established a debt-equity ratio of 70:30 for the determination of generic tariffs.  
  • The regulations also address issues such as the use of fossil fuels in biomass power projects, monitoring mechanisms, and the compliance of fuel mix ratios.  
  • They outline the petition and proceedings for tariff determination, including the required documents and statements.  
  • The regulations specify technology-specific parameters for various renewable energy projects, including wind energy projects and small hydro projects.  

Conclusion

The draft regulations issued by CSERC represent a move in promoting renewable energy generation in Chhattisgarh. By providing clarity and certainty in tariff determination, these regulations aim to attract investment in the sector, contribute to India’s renewable energy targets, and support the transition to a cleaner and more sustainable energy future.

[1] https://cserc.gov.in/Welcome/news_list_download/upload_news/06-11-2024_1730877651.pdf/1/330/327/42