Section 48 in The Central Electricity Regulatory Commission (Terms And Conditions For Tariff Determination From Renewable Energy Sources) Regulations, 2009
48. Capital Cost Indexation Mechanism
.-The following indexation mechanism shall be applicable in case of non-fossil fuel based cogeneration projects for adjustments in capital cost with the changes in Wholesale Price Index for Steel and Electrical Machinery:CC(n) = P&M(n) * (1+F1+F2+F3)P&M(n) = P&M(0) * (1+d(n))D(n) = [a*{(SI(n-1)/SI(0))-1}+ b*{(EI(n-1)/EI(0))-1}]/(a+b)Where,-CC(n) = Capital Cost for nth yearP&M(n) = Plant and Machinery Cost for nthyearNote. - P&M is to be computed by dividing thebase capital cost (for the first year of the Control Period) by (1+F1+F2+F3), i.e., Rs. 445 Lakh per MW/1.33 = Rs. 335 Lakh per MW.d(n) = Capital Cost escalation factor for year(n)of Control PeriodSI(n-1) = Average WPI Steel Index prevalent forfiscal year (n-1) of the Control PeriodSI(0) = Average WPI Steel Index prevalent forcalendar year (0) at the beginning of the Control Period, i.e., January 2008 to December 2008EI(n-1) = Average WPI Electrical Machinery Indexprevalent for calendar year (n-1) of the Control PeriodEI(0) = Average WPI Electrical and Machinery Index prevalent for calendar year (0) at the beginning of the Control Period, i.e., January 2008 to December 2008a = Constant to be determined by Commission from time totime,(In default it is 0.7), for weightages to Steel Indexb = Constant to be determined by Commission from time totime,(In default it is 0.3), for weightages to Electrical Machinery IndexF1 = Factor for Land and Civil Work (0.10)F2 = Factor for Erection and Commissioning (0.09)F3 = Factor for IDC and Financing Cost (0.14)
