generation tariff

7/31/2019 Generation Tariff

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Agenda

Overview of Regulatory SetupOverview of Regulatory Setup

Determination of Regulated TariffDetermination of Regulated Tariff

Tariff setting Through CompetitiveTariff setting Through Competitive

Bidding processBidding process

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Short Term Trading of PowerShort Term Trading of Power Key RegulationsKey Regulations

Commercial IssuesCommercial Issues


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Capacity charges consists ofCapacity charges consists of

ReturnReturn on equity (ROE)on equity (ROE)

Interest on LoanInterest on Loan

DepreciationDepreciation

O&M CostO&M Cost

Generation TariffGeneration Tariff

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Interest on WorkingInterest on Working CapitalCapital

Cost of Secondary fuelCost of Secondary fuel

Compensatory allowanceCompensatory allowance

Energy Charges consists ofEnergy Charges consists of

Reimbursement of cost of primaryReimbursement of cost of primary

fuel at normative Heat Ratefuel at normative Heat Rate


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Tariff NormsTariff Norms20092009--1414

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Norms for

Annual Capacity Charges Recovery

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Return on EquityReturn on Equity

BasicBasic RateRate ofof ReturnReturn willwill bebe 1515..55%% forfor existingexisting stationsstations

ForFor newnew projectsprojects itit cancan bebe 1616%% subjectsubject toto completioncompletion ofof CoDCoDfromfrom investmentinvestment approvalapproval asas followsfollows::

200200//210210//250250//300300//330330 MWMW -- 3333 monthsmonths atat 44 mthsmths intervalinterval

500500//600600//660660 MWMW -- 4444 monthsmonths atat 66 mthsmths intervalinterval

660660//800800 MWMW -- 5252 monthsmonths atat 66 mthsmths intervalinterval

GasGas StationsStations >>100100MWMW -- 3030 mthmth atat 44 mthsmths intervalinterval

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x ens onx ens on ro ec sro ec s -- mon smon s essess

HydroHydro ProjectsProjects asas perper TECTEC

PrePre TaxTax ReturnReturn toto incentiviseincentivise investmentinvestment inin sectorsector

DebtDebt:: EquityEquity forfor newnew projectsprojects toto 7070::3030 oror actualactual whicheverwhichever isishigherhigher

Actual equity in excess ofActual equity in excess of 3030% will be treated as normative loan% will be treated as normative loan


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RepaymentRepayment equalequal toto depreciationdepreciation irrespectiveirrespective ofof actualactualrepaymentrepayment

ToTo bebe chargedcharged fromfrom 11stst yearyear ofof CoDCoD irrespectiveirrespective ofofmoratoriummoratorium

ActualActual WtWt.. AvAv .. RateRate ofof interestinterest atat thethe be inninbe innin ofof

Interest on LoanInterest on Loan

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eacheach yearyear

GeneratorGenerator toto attemptattempt rere--financingfinancing forfor benefitbenefit NetNetBenefitBenefit ofof refinancingrefinancing toto bebe sharedshared inin thethe ratioratio ofof 11(gen)(gen)::22 (beneficiaries)(beneficiaries)

RefinancingRefinancing costcost isis toto bebe borneborne byby thethe beneficiariesbeneficiaries


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Secondary Fuel Oil in Annual Fixed Cost.Secondary Fuel Oil in Annual Fixed Cost.

NormativeNormative SecondarySecondary FuelFuel OilOil consumptionconsumption

uptoupto TargetTarget AvailabilityAvailability levellevel

LandedLanded costcost ofof oiloil basedbased onon actualactual ofof thethe

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threethree monthsmonths..

SecondarySecondary FuelFuel OilOil expensesexpenses willwill bebe subjectsubjecttoto annualannual adjustmentadjustment onon annualannual basisbasis basedbasedonon thethe weightedweighted averageaverage landedlanded costcost ofof oiloil


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Capital CostCapital Cost

CapitalCapital costcost forfor tarifftariff basebase toto includeinclude

ForFor existingexisting stationsstations capitalcapital costcost admittedadmitted upup toto

3131..33..20092009..

For new stations onFor new stations on actual cash expenditureactual cash expenditure

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not include commitments & liabilities for which nonot include commitments & liabilities for which nopayment has been made)payment has been made)

InitialInitial SparesSpares -- CoalCoal:: 22..55%%,, GasGas:: 44..00%%,, HydroHydro::

11..55%%

PlusPlus EstimatedEstimated CapitalCapital ExpenditureExpenditure onon cashcash basisbasis

forfor thethe respectiverespective yearsyears ofof thethe tarifftariff periodperiod 20092009--1414


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Capital CostCapital Cost

TruingTruing upup exerciseexercise basedbased onon actualactual CAPEXCAPEX uptoupto

3131..0303..20142014 toto bebe donedone inin 20142014--1515 GeneratorsGenerators permittedpermitted additionallyadditionally oneone moremore timetime duringduring

20092009 --1414 priorprior toto 20132013--1414 forfor truingtruing upup

DifferenceDifference betweenbetween tarifftariff allowedallowed andand revisedrevised afterafter TruingTruing--upup

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ofof respectiverespective yearyear

CapitalCapital CostCost prudenceprudence checkcheck ww..rr..tt benchmarkbenchmark normsnorms asas &&whenwhen publishedpublished..

EstimatedEstimated CapitalCapital ExpenditureExpenditure forfor thethe respectiverespective yearsyears ofof

thethe tarifftariff periodperiod 20092009 --1414 toto includeinclude AdditionalAdditional CapitalCapital ExpensesExpenses uptoupto CutCut OffOff DateDate

ExpenditureExpenditure allowedallowed asas perper 20092009--1414 RegulationRegulation beyondbeyondCutCut OffOff DateDate


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Cut Off DateCut Off Date

DateDate byby whichwhich allall worksworks withinwithin thethe originaloriginal

scopescope ofof workwork areare requiredrequired toto bebe completedcompleted..meansmeans 3131stst MarchMarch of of thethe yearyear closingclosing afteraftertwotwo years years of of the the yearyear of of commercialcommercialoperationoperation of of thethe project,project, andand inin casecase thethe

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operationoperation inin thethe lastlast quarterquarter of of aa year,year, thethecutcut--offoff datedate shallshall bebe 3131stst MarchMarch of of thethe yearyearclosingclosing afterafter threethree yearsyears of of thethe yearyear of ofcommercialcommercial operationoperation..

COD of StationCOD of Station Cut off DateCut off Date

1.4.2012 to 31.12.20121.4.2012 to 31.12.2012 31.3.201531.3.2015

1.1.2013 to 31.03.20131.1.2013 to 31.03.2013 31.3.201631.3.2016


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60.0

80.0

100.0

120.0

140.0

NUALFIXEDC

HARGE

INCENTIVE DISINCENTIVE

108108..88%%

117117..66%%

91.2%91.2%

60.0

80.0

100.0

120.0

140.0

NUALFIXEDC

HARGE

INCENTIVE DISINCENTIVE

108.8%108.8%

1010 yrs oldyrs old

70708585


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FixedFixed ChargesCharges (inclusive(inclusive ofof incentive)incentive) payablepayable onon calendarcalendar

monthmonth basisbasisForFor stationsstations >> 1010 yearsyears

== (AFC(AFC xx NDMNDM // NDY)NDY) xx (PAFM(PAFM // NAPAF)NAPAF)

==

Recovery of Fixed ChargeRecovery of Fixed Charge Thermal StationsThermal Stations

== (AFC(AFC xx NDMNDM // NDY)NDY) xx 00..55 ((11..00 ++ PAFMPAFM // NAPAF)NAPAF)

EvenEven ifif plantplant availabilityavailability forfor aa particularparticular monthmonth isis nil,nil, stationstation willwill

recoverrecover 5050%% ofof fixedfixed chargecharge

ProvidedProvided InIn casecase thethe plantplant availabilityavailability factorfactor achievedachieved duringduring

aa yearyear


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Norms for

Energy Charges Recovery

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Operating NormsOperating NormsHeatHeat RateRate Existing StationsExisting Stations

ExistingExisting 200200//210210//250250 MWMW 25002500

500 MW Sub critical Units (for TDBFP 40 Kcal less)500 MW Sub critical Units (for TDBFP 40 Kcal less) 24252425

Kcal/kWh

BTPSBTPS 28252825

TTPSTTPS 29502950

TandaTanda 28252825

Anta, Dadri, KawasAnta, Dadri, Kawas 2075 /30102075 /3010

Faridabad, KayamkulamFaridabad, Kayamkulam 2000/29002000/2900

AuriyaAuriya 2100/30452100/3045

GandharGandhar 2040/29602040/296021


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AuxiliaryAuxiliary PowerPower ConsumptionConsumption

Without cooling towerWithout cooling tower With cooling towerWith cooling tower

200 MW200 MW 8.58.5 9.09.0

22

.. ..

500 (MDBFP)500 (MDBFP) 8.58.5 9.09.0


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ECEC coveringcovering primaryprimary fuelfuel costcost shallshall bebe payablepayable forfor totaltotal exex--busbus energyenergyscheduledscheduled toto bebe suppliedsupplied toto thethe beneficiarybeneficiary duringduring thethe calendarcalendar month,month,atat thethe specifiedspecified energyenergy chargecharge raterate..

EnergyEnergy chargecharge raterate ((ECECRR)) inin RsRs.. perper kWhkWh onon exex--powerpower plantplant basisbasis::

Computation of Energy ChargeComputation of Energy Charge -- ThermalThermal

ECRECR isis arrivedarrived atat afterafter reducingreducing GHRGHR byby heatheat fromfrom 11 mlml secondarysecondary fuelfuel

VCR = Energy charge rate, in Rupees per kWh sent out.

GHR = Gross station heat rate, in kcal per kWh.

SFC = Specific fuel oil consumption, in ml/kWh CVSF = Calorific value of secondary fuel, in kCal/ml

LPPF = Landed price of primary fuel, in Rupees per kg,

CVPF = Gross calorific value of primary fuel, in kCal per kg,


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Heat RateHeat Rate Existing StationsExisting Stations

ExistingExisting 200200//210210//250250 MWMW 25002500 No changeNo change

500 MW Sub critical Units (for TDBFP 40 Kcal500 MW Sub critical Units (for TDBFP 40 Kcal

less)less)

24252425 Less by 25Less by 25

BTPSBTPS 28252825 Less by 60Less by 60

TTPSTTPS 29502950 Less by 25Less by 25

TandaTanda 28252825 Less b 25Less b 25

Kcal/kWh

Anta, Dadri, KawasAnta, Dadri, Kawas 2075 /30102075 /3010 SameSame

Faridabad, KayamkulamFaridabad, Kayamkulam 2000/29002000/2900 SameSame

AuriyaAuriya 2100/30452100/3045 SameSame

GandharGandhar 2040/29602040/2960 Increase by 40Increase by 40

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TheThe CommissionCommission maymay onon itsits ownown reviserevise thethe normsnorms ofof StationStation

HeatHeat RateRate inin respectrespect ofof anyany ofof thethe generatinggenerating stationsstations forfor whichwhich

relaxedrelaxed normsnorms havehave beenbeen providedprovided


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Heat Rate - New Stations

Pressure Rating (Kg/cm2) 150 170 170 247 247

SHT/RHT (0C) 535/535 537/537 537/565 537/565 565/593

New coal based stations after 1.4.2009 6.5% margin over design HeatRate

New gas based stations after 1.4.2009 5% margin over design Heat Rate

New liquid fuel based stations after

1.4.2009

7.1% margin over design Heat

Rate

Type of BFP Electrical Turbine Turbine Turbine Turbine

Max Turbine Cycle Heat rate(kCal/kWh)

1955 1950 1935 1900 1850

Min.Boiler Efficiency

Sub-Bituminous Indian Coal 0.85 0.85 0.85 0.85 0.85Bituminous Imported Coal 0.89 0.89 0.89 0.89 0.89

Max Design Unit Heat rate(kCal/kWh)

Sub-Bituminous Indian Coal 2300 2294 2276 2235 2176

Bituminous Imported Coal 2197 2191 2174 2135 207926


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Sample TariffSample Tariff

a cu a ona cu a on

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Sample Tariff CalculationSample Tariff Calculation

Station Details & AssumptionsStation Details & Assumptions

Coal Station (Coal Station (11XX 500500 MW)MW)

Ant. Completed Cost:Ant. Completed Cost: Rs.Rs. 25002500 CrsCrs

Debt: Equity:Debt: Equity: 7070:: 3030 Loan Repayment: DepreciationLoan Repayment: Depreciation

WtgWtg. Avg. Rate of. Avg. Rate of InttIntt.:.: 99%%

TATA:: 8585%%

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Sample Tariff Calculation ..contd.

YEAR 1 2 3 4 5 6 7 8 9 10

ROE 176 176 176 176 176 176 176 176 176 176

DEPRECIATION 125 125 125 125 125 125 125 125 125 125

INTEREST ONLOAN 152 141 129 118 107 95 84 73 62 50

OILCONSUMPTION 11 11 11 11 11 11 11 11 11 11

IWC 20 20 20 20 20 20 20 20 20 20

CAPACITYCHARGE 549 542 534 527 520 514 507 501 496 490

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Frequency Linked UI Rate

600

700

800

900

1000

0

100

200

300

400

500

50.2 50.1 50 49.9 49.8 49.7 49.6 49.5 49.4 49.3 49.2 49.1 49 48.9

generation tariff

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