Petition No. 255/2010 (Suo-Motu). Case: In Re: Determination of Benchmark Capital Cost norm for Solar PV Power Projects and Solar Thermal Power Projects Vs. Central Electricity Regulatory Commission
| Case Number | Petition No. 255/2010 (Suo-Motu) |
| Judges | Pramod Deo, Chairperson, S. Jayaraman, V.S. Verma and M. Deena Dayalan, Members |
| Issue | Electricity Law |
| Judgement Date | November 09, 2010 |
| Court | Central Electricity Regulatory Commission |
Order:
(New Delhi)
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The Commission has notified the Central Electricity Regulatory Commission (Terms and Conditions for Tariff determination from Renewable Energy Sources) Regulations, 2009 (hereinafter "the RE Tariff Regulations") on 16.09.2009. The first proviso of Regulation 5 of the RE Tariff Regulations provides that the Commission may annually review the benchmark capital cost norm for Solar PV and Solar Thermal power projects.
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The Benchmark capital cost norms as stipulated under Regulation 57(1) for Solar PV power project and under Regulation 61(1) for Solar Thermal power project are applicable for solar power projects to be commissioned during FY 2009-10 (i.e. upto 31.03.2010).
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Subsequently, as per Regulation 5 of the RE Tariff Regulations, Commission had reviewed, vide Order dated 25.02.2010 (in Petition No. 13/2010 suo-motu) and fixed the benchmark capital cost for Solar PV power projects at ` 1690 Lakh/MW for the FY 2010-11. Further as per the first amendment to RE Tariff Regulations (vide notification No. L-7/186(201)/2009-CERC dated 25.02.2010), the generic tariff determined for solar PV power projects based on the benchmark capital cost and other norms applicable for 2010-11 shall also be applicable for such projects commissioned during 2011-12 subject to the condition that the Power Purchase Agreement (PPA) is signed on or before 31.03.2011 and entire capacity covered under the PPA is commissioned on or before 31.03.2012.
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In the above referred Order, the Commission had also reviewed and fixed the benchmark capital cost for Solar Thermal power projects at ` 1530 Lakh/MW for the FY 2010-11. Further, as per the first amendment to the RE Tariff Regulations (vide notification No. L-7/186(201)/2009-CERC dated 25.02.2010), the generic tariff determined for Solar Thermal power projects based on the benchmark capital cost and other norms applicable for 2010-11 shall also be applicable for such projects commissioned during 2011-12 and 2012-13 subject to the condition that the PPA is signed on or before 31.03.2011 and entire capacity covered under the PPA is commissioned on or before 31.03.2013.
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In exercise of the power under the Regulation 5 of the RE Tariff Regulations, the Commission vide Order dated 15.09.2010, proposed to determine the Benchmark Capital cost norm for Solar PV power projects and Solar Thermal power projects for the year 2011-12 (Petition No. 255/2010 - Suo-Motu) for inviting comments/suggestion/objections from the stakeholders.
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The Commission invited comments from the various stakeholders vide its public notice No. (Petition No. 255-256/2010 (Suo-Motu) Dated 17.09.2010. Last date of submission was kept on 10.10.2010. In response to the same written comments/suggestions received from following stakeholders:
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M/s Azure Power
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M/s Rudraksh Energy, Rajasthan
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M/s Bloomberg New Energy Finance
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M/s Suryachakra Power Venture Pvt. Ltd.
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M/s Reliance Power Ltd.
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M/s Abengoa Solar
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M/s Tata BP Solar
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M/s ACME
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Assam Electricity Regulatory Commission (AERC)
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Subsequently, a public hearing was held on 19.10.2010 and following stakeholders expressed their views/suggestions/comments in person:
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M/s Abengoa Solar
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M/s ACME
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M/s Tata BP Solar
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M/s Chhattisgarh Biomass Energy Developers Association (CBEDA)
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The Commission analysed the views/comments/suggestions of the stakeholders and the Commission's decisions are as below;
Solar PV Power Projects
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Land Cost
Comments
Land Costs norm should be ` 5 Lakh/acre including conversion charges and legal fee expenses. (M/s Azure Power)
Analysis and Decision
The benchmark capital cost norm for solar PV and solar thermal projects is a generic norm representing overall scenario in the country. Generally the land acquired for setting up solar power projects are mostly arid/barren or of no commercial use. The Commission would like to reiterate its earlier observation that with the development in technology, the solar to electricity conversion efficiency shall improve, which will eventually translate to reduction in requirement of land per MW of installation. Therefore, the Commission has decided to retain the land cost norm of ` 3 lakh / acre as proposed.
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Civil & General Works
Comments
The cost of civil and general Works proposed by the Commission at ` 0.95 crore per MW. It is based on 6% of the total project cost. Estimate of civil and general works must be costed on individual line items and actual cost should be taken as ` 1.23 cr. /MW. (M/s Azure Power)
Analysis and Decision
The Commission while proposing the ` 0.90 crore/MW as expenditure towards civil and general works had taken into consideration...
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