The Andhra Pradesh Electricity Regulatory Commission (APERC) has determined the fuel price for biomass and industrial waste-based projects at Rs 3,176.72 per metric ton (MT) for the financial year (FY) 2019-20. The fuel cost for bagasse-based projects has been set at Rs 1,788.43 per MT for FY 2019-20. These rates will be increased by 5 per cent every year up to FY 2023-24 as per the Central Electricity Regulatory Commission (CERC) Regulation, 2017. By adopting the fuel price at Rs 1,788.43 per MT for bagasse for FY 2019-20, the unit price of power will be Rs 3.14 per kWh. The APERC had earlier determined the variable cost for biomass, industrial waste, and bagasse projects for FY 2014-15 to FY 2018-19, with indicative fuel price escalation of 6 per cent.
In January 2020, MSEDCL issued a tender for the procurement of 100 MW of power generated from bagasse-based co-generation projects. The tender has a ceiling tariff of Rs 3.56 per kWh, and 50 per cent of the tariff will be treated as the variable cost. The projects which are already supplying power to MSEDCL under existing energy purchase agreements and have expired or are set to expire by March 31, 2021, can take part in this tender. The interested bidders are expected to submit an earnest money deposit of Rs 100,000 per MW.