Setting guidelines for wind, solar, hybrid projects, with specific criteria for capacity, costs, and storage efficiency, Chhattisgarh is set to implement new renewable energy tariff rules from 2025.
The Chhattisgarh State Electricity Regulatory Commission (CSERC) has introduced new regulations to set the tariff for renewable energy sales to distribution licensees, effective from April 1, 2025.
These guidelines, called the “Chhattisgarh State Electricity Regulatory Commission (Terms and Conditions for Determining Tariff for Renewable Energy Sources) Regulations, 2024,” apply to new renewable energy projects that achieve commercial operations between April 1, 2025, and March 31, 2030.
For renewable energy projects commissioned before March 31, 2025, and have long-term power purchase agreements (PPAs), the tariff will remain as per the previously established tariff orders.
The eligibility criteria for renewable energy projects under the new regulations include wind energy projects that use newly installed equipment, as well as solar PV, floating solar, solar thermal, and rooftop solar systems that utilise government-approved technology. Floating solar projects integrated with existing renewable energy projects, excluding ground-mounted solar, will be classified as hybrid renewable energy projects. To qualify as a hybrid project, it must use new equipment, with each renewable energy source contributing at least 33% of the total installed capacity. Additionally, solar projects with a capacity ranging from 0.5 MW to 2 MW will be eligible for a generic tariff.
Tariff framework
The tariff will consist of a single rate that covers fixed costs such as return on equity, interest on loans, depreciation, working capital expenses, and operational maintenance costs.
Excess energy produced beyond the plant’s capacity can be sold on the market through bilateral or collective transactions. The beneficiary has the first right of refusal to purchase this excess energy at the tariff rate for the year.
Grid operation will require scheduling for renewable energy projects that include storage. However, scheduling and deviation settlement will apply if power is supplied to multiple beneficiaries.
The capital costs will include land, machinery, civil work, plant installation, financing, and infrastructure for connecting to the grid. The developer must submit a detailed breakdown of these costs for tariff evaluation.
The tariff determination will assume a debt-equity ratio of 70:30. If the actual equity exceeds 30% of the capital cost, the excess will be treated as a normative loan.
Loan tenure for tariff calculation will be 15 years, with annual depreciation set at 4.67% for the first 15 years, after which depreciation will be spread across the remaining lifespan of the project.
Furthermore, operation and maintenance (O&M) expenses will cover repairs, staff costs, and administrative overheads, with an annual escalation of 5.25%. Working capital requirements will be based on maintenance and operation costs for wind, solar, floating solar, and storage projects.
Project-specific guidelines
Tariffs and capital costs for renewable energy projects that include storage will be determined on a project-by-project basis, considering current market trends. The efficiency of solid-state battery storage must be at least 80%, and for pumped storage, at least 75%.
Tariffs and capital costs for wind, floating solar, and hybrid energy projects will be determined based on market conditions, with specific attention to each technology’s capacity utilisation factor (CUF).
Last year in July, the CSERC stated that the cross-subsidy surcharge for open-access power consumers should not exceed a certain percentage of the average cost of power supply, as per a recent amendment issued by the state regulator.
With this new framework, the state eyes to ensure fair pricing while supporting the development of renewable energy in Chhattisgarh.
