The Central Electricity Regulatory Commission (CERC) has initiated the process to fix levellised generic tariffs for various renewable energy (RE) technologies, including small hydro power (SHP) projects, for FY26.

In August 2024, the regulator issued the levellised generic tariff for renewable energy technologies for the first year of control period—from July 1, 2024 to March 31, 2025.

In a suo motu order last week, the commission said that it has initiated the process for fixing levellised generic tariff for RE technologies for the second year of the control period—FY26.

The RE Tariff Order for FY26 will be issued after completing the due regulatory process procedures, which will take some more time, CERC said adding, that the tariffs fixed for FY25 shall continue to be in force till June 30, 2025 or until further orders.

The regulator had notified generic tariffs of ₹4.84-7.38 per kilowatt hour (kWh) for various small hydro power projects across States for FY25.

For instance, SHP projects below 5 megawatts (MW) in Himachal Pradesh, Uttarakhand, West Bengal, Jammu and Kashmir, Ladakh as well as North Eastern States, the regulator has fixed a levellised total tariff of ₹6.42 per unit, while for projects with capacity of 5-25 MW in these States, the rate is ₹5.82 per unit.

Besides SHP projects, the commission will also notify levellised generic tariffs for biomass power projects with rankine cycle technology, non-fossil fuel-based co-generation projects, biomass gasifier based power projects and biogas power projects.

The levellised tariffs have to be calculated by carrying out levellisation for the ‘useful life’ of each technology considering the discount factor for time value of money. For instance, the useful life of a SHP project is 40 years, while that of a biomass project with rankine cycle technology is 25 years.

According to regulations, the tariffs for renewable energy sources (RES) should include return on equity (RoE), interest on loan capital, depreciation, interest on working capital and operation and maintenance (O&M) expenses.

Besides, for RE technologies with fuel cost component, such as biomass power projects with rankine cycle technology, non-fossil fuel based co-generation, biomass gasifier based projects and biogas based power project, the single part tariff with two components—fixed cost component and fuel cost component—has to be determined.

The regulator has said that the capital cost of a SHP project for fixing tariffs will cover those projects that are located at sites approved by the State nodal agencies/ State governments using new plants, machinery and with an installed capacity of up to and including 25 MW.

For instance, the capital cost in Himachal Pradesh, Uttarakhand, West Bengal, North Eastern States and the union territories of Jammu and Kashmir and Ladakh for a SHP project has been fixed at ₹12 crore per MW both for capacities up to 5MW and 5 MW to 25 MW for FY25.

Published on April 16, 2025