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India Procurement News Notice - 91937


Procurement News Notice

PNN 91937
Work Detail The Karnataka Electricity Regulatory Commission (KERC) has issued a discussion paper on the fixation of norms and determination of tariffs for power procurement from rooftop aero turbines with or without solar for the financial year 2026. The initiative aligns with the Karnataka Renewable Energy Policy 2022-27, which promotes the adoption of innovative renewable energy technologies, including rooftop aero turbines. These turbines are small-scale wind energy systems installed on rooftops to generate electricity using wind resources, making them suitable for urban and suburban areas. Their integration with solar photovoltaic (PV) systems can further enhance energy generation and optimize resource utilization. The primary objectives of promoting rooftop aero turbine systems in Karnataka include encouraging decentralized power generation, enabling consumers to harness wind energy, facilitating hybrid renewable energy solutions, reducing dependence on grid power, and promoting private sector participation in distributed wind power. The tariff for these systems is proposed to be determined based on either a cost-plus model or a competitive bidding framework. Given the absence of large-scale rooftop aero turbine projects in India, determining a standard tariff remains a challenge due to the lack of reliable data on capital costs, capacity utilization factors (CUF), and performance benchmarks. KERC has outlined eligibility criteria for installing rooftop aero turbines. Consumers who already have a solar rooftop system or plan to install an aero turbine can integrate both, provided the installed capacity of each resource does not exceed the sanctioned load. If both systems are installed, the total capacity should not exceed 1.25 times the sanctioned load. A standalone rooftop aero turbine system should have a minimum capacity of 1 kW and not exceed the sanctioned load. To determine the tariff for the financial year 2026, the Commission has analyzed policies, procedures, and financial mechanisms related to power generation. The tariff will depend on key operational and financial parameters. The useful life of the plant is proposed to be 25 years. A levelized tariff for the same period will be set to ensure financial certainty for investors. The CUF for rooftop aero turbines is yet to be determined, and stakeholders are invited to propose an appropriate value. The debt-equity ratio is proposed at 70:30, similar to other renewable energy projects. Since the capital cost of rooftop aero turbines is not available, stakeholders are encouraged to submit cost estimates. For operation and maintenance (O&M), KERC has proposed an annual cost of ?1,000 per kW with a 5% annual escalation. The interest rate on debt is set at 11.10% per annum for a 13-year loan period. The interest on working capital is proposed at 11.50% per annum. Depreciation is structured to align with loan repayment, with a rate of 5.38% per annum for the first 13 years and the remaining 10% spread over the remaining useful life. The return on equity (RoE) is proposed at 14% per annum, in line with the prevailing norms of the Central Electricity Regulatory Commission (CERC). The discount rate, based on the weighted average cost of capital (WACC), is set at 11.97%. No auxiliary consumption is allowed due to a lack of documentary evidence supporting its requirement. The final tariff will be determined after receiving stakeholder inputs, especially regarding capital costs. If no inputs are received, KERC will set the tariff on a project-specific basis to promote rooftop aero turbines. The Commission has invited suggestions and comments from stakeholders, which can be submitted to the Secretary.
Country India , Southern Asia
Industry Energy & Power
Entry Date 05 Mar 2025
Source https://solarquarter.com/2025/03/03/kerc-discussion-paper-proposes-tariff-framework-for-rooftop-aero-turbines-with-or-without-solar-in-karnataka/

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