The Central Electricity Regulatory Commission (CERC) notified the CERC (Terms and Conditions for Tariff determination from Renewable Energy Sources) Regulations, 2024 on June 12, 2024 for the purpose of calculation of tariff and the terms and conditions for the same for any grid connected generating station or unit based on renewable energy sources.
The regulations stipulate eligibility criteria for wind power project, small hydro project, biomass power project, non-fossil fuel-based co-generation project, solar power project, renewable hybrid energy project, biomass gasifier-based power project and other renewable energy-based projects for the applicability of these regulations.
The regulations stipulate a control period commencing from July 1, 2024, till March 31, 2027, during which the norms for determination of tariff specified in these regulations shall remain valid. The regulations provide for two kinds of tariff including generic tariff and project specific tariff. Both kinds of tariff are to be levied on different types of renewable energy projects. However, project-specific tariffs are determined on a case-to-case basis by the CERC. The tariffs are to be determined on the basis of a variety of financial principles including capital cost, debt equity ratio, loans incurred, depreciation and other such principles.
These regulations usher in a significant development in the regulatory landscape surrounding renewable energy in India. By notifying determinable and specific criteria for tariff calculation and terms, the government has sought to promote renewable energy projects in the country and aid the development of the same.