Lok Sabha Question No. 304 (STARRED), answered on 2017-03-23
Subject: Tariff Structure for Power from Renewable Sources
Ministry: NEW AND RENEWABLE ENERGY
Asked by: BALKA SUMAN

## GOVERNMENT OF INDIA

## MINISTRY OF NEW AND RENEWABLE ENERGY LOK SABHA

## STARRED QUESTION NO. 304

TO BE ANSWERED ON 23.03.2017

## TARIFF STRUCTURE FOR POWER FROM RENEWABLE SOURCES

## *304.  SHRI SUMAN BALKA:

Will the Minister of New and Renewable Energy be pleased to state:

- (a) whether  any  preferential  tariff  treatment  is  accorded  to  power  sourced  from  nonconventional energy resources and if so, the details thereof ;
- (b) whether the Government is exploring the possibility of a change in the tariff structure for electricity generated from clean energy sources to promote a green economy and if so, the details thereof;
- (c) whether  the  Government  proposes  to  introduce  a  fixed  component  in  the  renewable energy tariff to prevent States from backing down from buying electricity from renewable energy sources; and
- (d) if so, the details thereof and if not, the reasons thereof?

## ANSWER

THE MINISTER OF STATE FOR POWER, COAL, NEW & RENEWBALE ENERGY AND MINES (INDEPENDENT CHARGE) (SHRI PIYUSH GOYAL)

- (a) to (d): A Statement is laid on the Table of the House.

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## Statement referred to in reply to parts (a) to (d) of the Lok Sabha Starred Question No. 304 for answer on 23.03.2017 regarding Tariff Structure for Power From Renewable Sources.

- (a)         The Central and State Electricity Regulatory Commissions have framed regulations  for  determination  of  tariff  for  power  sourced  from  Renewable Energy Sources, if the same is not procured based on competitive bidding. The regulated  tariff  for  renewable  energy  is  based  on  cost-plus  norms,  assuring  a specified  rate  of  return  on  investment  to  encourage  investment  in  these technologies.
- (b)        No, Madam
- (c) & (d)   For  solar, wind and small hydro projects the tariff is structured as a single part tariff  consisting  of  the  following  fixed  cost  components:  a)  Return  on  equity; b)  Interest  on  loan  capital;  c)  Depreciation;  d)  Interest  on  working  capital;  and e)  Operation  and  maintenance  expenses.  For  the  renewable  energy  technologies having fuel cost component, like biomass power projects and non-fossil fuel based cogeneration there is a provision for single part tariff with two components, fixed cost component and fuel cost component.

Further, as per  the Central  Electricity  Regulatory  Commission  (Terms  and Conditions for Tariff determination from Renewable Energy Sources) Regulations, 2012, all renewable energy power plants, except for biomass power plants withinstalled capacity of 10 MW  and  above and non-fossil fuel basedcogeneration  plants,  shall  be  treated  as 'Must  Run' power  plants  and shallnot  be  subjected  to  'merit  order  despatch'  principles. Further,  as  per  the Indian  Electricity  Grid  Code,  System  operator  (State  Load  Dispatch  Centre  / Regional  Load Dispatch Centre) is mandated to make  all  efforts  to  evacuate  the  available  solar and wind  power and treat as a must-run  station. However,  System  operator   may  instruct the solar /wind generator to back down   generation on consideration of grid security or safety of any equipment or personnel is endangered and Solar/ wind generator is required to comply with the same.