The Central Electricity Regulatory Commission has notified tariff regulations for green power generated from renewable energy sources in an effort to attract new investments in this sector. The regulations have been finalised keeping in view the statutory mandate to Electricity Regulatory Commission for promoting cogeneration and generation of electricity from renewable sources of energy.
These regulations assumed special importance in view of the National Action Plan on Climate Change that stipulated minimum renewable purchase standards at 5 per cent of the total power purchases in the year 2010 and thereafter should increase by one percentage point (100 basis points) each year for 10 years.
Specifying capital cost norms and fixing tariff upfront for the whole tariff period are the two main features of the new regulations. The regulations provide normative capital costs for projects based on different renewable technologies. These capital costs are to be revised every year for incorporating the relevant escalations.
The tariff permitted to a project under these regulations would apply for the whole tariff period which is 13 years. The tariff period for solar power has been kept as 25 years and for small hydro below 5 mw, it has been kept as 35 years.
The Forum of Regulators has also agreed to implement Renewable Energy Certificate mechanism as an alternative route for fulfilling renewable purchase.