The Karnataka Electricity Regulatory Commission (KERC) has fixed ₹3.74 (~$0.058)/kWh as the generic tariff for wind projects in Karnataka. The new benchmark tariff will be applicable through March 31, 2018.
Furthermore, KERC has proposed a debt-equity ratio of 70:30 for tariff determination, with proposed project costs ₹62 million (~$0.97 million)/MW at a CUF of 28%.
To determine the tariff, KERC has taken into consideration a 75 percent domestic loan component and a 25 percent foreign loan component.
The KERC has stated that loan tenure will be 13 years. The project depreciation rate will be set at 5.38 percent of the capital cost for the first 13 years for recovery of debt, with remaining depreciation spread during the balance of the useful life of a project.
Additionally, a 16 percent return on equity (RoE) for wind projects was proposed, with the tenure of PPAs will be 20 years, with an option for the developer to extend it for another five years.
It was stated that the projects that have already entered into PPAs and were approved by the KERC prior to the issuance of this order will receive the old tariff of ₹4.50 (~$0.07)/kWh.
Karnataka Renewable Energy Development Ltd. has stated that Karnataka has ~7.5 GW of total installed capacity from renewable energy sources, with 3.84 GW of Wind as of August 2017.
Earlier in August, in Tamil Nadu wind tariffs fell to a low of ₹3.46 which is not a viable tariff for developers in Karnataka, according to project developers and wind turbine manufacturers.