The Rajasthan Electricity Regulatory Commission (RERC) has granted permission for the annual adjustment of tariffs for biomass projects within the state, contingent upon fluctuations in variable expenses such as fuel costs. According to the “Rajasthan Electricity Regulatory Commission (Terms and Conditions for Tariff determination from Renewable Energy Sources) (Second Amendment) Regulations, 2023,” the tariff established for biomass projects in the fiscal year (FY) 2023-24 will be applicable for both FY 2024-25 and FY 2025-26.
The stakeholders cited the existing 5 per cent tariff hike and requested the commission to maintain it. After considering the recommendations, the commission included a provision in the current regulation specifying that any annual adjustments in variable charges, whether an increase or decrease, will be in Rs per kWh relative to the variable charges of the preceding year. The base year for the respective technology will be FY 2023-24. It also stipulated that for projects with expired power purchase agreements (PPA), a tariff equivalent to 85 per cent of the tariff for the last year’s PPA duration will be applicable, along with comparable annual modifications in variable charges. Concerning the scope of the regulations, the commission clarified that the rules would be applicable statewide, as explicitly outlined, throughout the entire tariff determination period spanning from April 1, 2020, to March 31, 2026. It asserted that the suggested provision confirming the extension of the regulations until March 31, 2026, would take precedence.
Regarding the control period, the commission abandoned the suggested provision that pertained to the applicability of tariffs on projects commissioned up to March 31, 2024. Instead, it maintained the control period unchanged for a duration of six fiscal years, spanning from April 1, 2020, to March 31, 2026. With regard to tariff for biomass projects, it revised the regulation to exclude projects that have already been commissioned or have received approval for PPAs before the updated regulations notification date. In addition, the regulator expanded the scope of the generic tariff to include projects that are already commissioned or for which the commission has granted PPAs approval prior to the date of notification of these regulations, rather than just projects commissioned until March 31, 2024.
To address the appeal for fuel price adjustments, the commission acknowledged that the fuel price would remain constant for biomass projects that are already operational or have received approval for PPAs before the notification date of these regulations. This provision also applies to plants commissioned during the control periods 2009-15 and 2015-20. The commission stated that it had opted to permit the utilisation of 15 per cent fossil fuel or solar power exclusively for existing biomass power projects, specifically those that had already completed commissioning before the commencement of the current regulations. It clarified that the proposed regulation aimed to offer regulatory certainty, specifying that the banking facility, along with associated charges, would remain in effect until March 31, 2030. Subsequent to this date, the provisions related to banking would be subject to the regulations in effect during that period.
