Section 35 in The Central Electricity Regulatory Commission (Terms And Conditions For Tariff Determination From Renewable Energy Sources) Regulations, 2009
35. Capital Cost Indexation Mechanism
.-The following indexation mechanism shall be applicable in case of biomass power projects for adjustment in capital cost over the Control Period with the changes in Wholesale Price Index for Steel and Electrical Machinery:CC(n) = P&M(n) * (1+F1+F2+F3P&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 nthyearP&M(0) = Plant and Machinery Cost for the baseyearNote. - P&M(0) is to be computed bydividing the base capital cost (for the first year of the Control Period) by(1+F1+F2+F3), i.e., Rs. 450 Lakh per MW/1.33 =Rs. 338 Lakh per MW.d(n) = Capital Cost escalation factor for year(n)of Control Period.SI(n-1) = Average WPI Steel Index prevalent for calendaryear (n-1) of the Control Period.SI(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 Period.EI(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,b = 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 Works (0.10)F2 = Factor for Erection and Commissioning (0.09)F3 = Factor for IDC and Financing Cost (0.14)
