T
he West Bengal Electricity Regulatory Commission (WBERC) has approved a power purchase agreement (PPA) for the purchase of surplus power from a waste gas-based generating project. The PPA was signed between the West Bengal State Electricity Distribution Company Limited (WBSEDCL) and Ankit Metal & Power Limited (AMPL). The West Bengal State Electricity Distribution Company Limited (WBSEDCL) had applied to WBERC on February 22, 2019, for the approval of the PPA signed with the developer. The 16 MW project is located at Chhatna in the Bankura district of West Bengal. The PPA will be valid for 15 years, and the tariff for the entire period has been set at Rs 1.19 per kWh.
For the longest time, the waste-to-energy segment has faced a policy and regulatory paralysis. The absence of an effective tariff determination mechanism kept investors away. If a municipal corporation reached the stage of awarding a project, the discoms shied away from ensuring power offtake at the tariffs quoted by developers. Moreover, municipal corporations could not guarantee or ensure the supply of an adequate quantum of waste feed to the plants. Effective waste management is expensive, often comprising 20-50 per cent of municipal budgets.
Operating this essential municipal service requires integrated systems that are efficient, sustainable and socially supported. The absence of these systems has hampered the development of the segment.
However, over the past few years, there has been a lot of policy and regulatory advocacy to resolve these issues. In 2018, the Ministry of Power revised the Tariff Policy, 2006 under the Indian Electricity Act, 2003, making it mandatory for discoms to purchase power from WtE plants. Moreover, the remunerative tariffs set by the Central Electricity Regulatory Commission (CERC) have encouraged investor interest in the segment. A number of states have adopted the CERC’s guidelines to determine state-specific tariffs. Some states have also adopted project-specific norms to determine tariffs, a strategy that has worked in favour of the segment. Besides, a number of states have come up with focused WtE policies. Interestingly, in 2018, the Supreme Court intervened and issued a ban on construction activity in several states, stating that they had not come up with any policy for waste management. This prompted more states to announce dedicated waste management policies.