Solutions Limited (DMSL) - DERCderc.gov.in/Public Notice/DMSL/Executive Summary - D… · ·...
Transcript of Solutions Limited (DMSL) - DERCderc.gov.in/Public Notice/DMSL/Executive Summary - D… · ·...
Summary of Petition No 27 of 2016 filed by M/s. Delhi MSW
Solutions Limited (DMSL)
Subject :- In the matter of determination of Tariff for sale of power to
Distribution Licensees in the State of Delhi in respect of the Municipal Solid
Waste to Energy (MSWtE) Project at Village Narela near Narela - Bawana
Road at Delhi.
1. The Petitioner is a generating company under sub section 28 of section
2 of the Electricity Act, 2003 (the “Act”), which is in the process of
commissioning a Waste to Energy Project at Bawana Industrial area,
New Delhi. The project comprises of two units of 600 tons per day of
boilers with a single stream turbine generator having a capacity of 24
MW. The project employs an air cooled condenser to conserve precious
resources like water and has sanction to utilize 1.0 MLD of treated
sewage from Delhi Jal Board (DJB).
2. The Petitioner has signed concessional agreement with the erstwhile
Municipal Corporation of Delhi (now North Delhi Municipal Corporation
– one of the three successor entities) for Door to Door collection,
Transfer, Transportation, developing an integrated Municipal Solid
Waste Processing Facility, which includes generation of power, and
Engineered Sanitary Landfill Facility as per MSW (Management &
Handling) Rules 2000 on long term Build, Own and Transfer (BOT)
basis on July 17, 2009.
3. The thermal processing of municipal waste results into ash as the sole
residue, apart from minor quantities of chemical residues emanating
from flue gas treatment. The sole and biggest advantage of thermal
processing of municipal waste, through generation of power, is its
ability to reduce the waste to the extent of 90% by volume and 75%
by weight. Thus the project set up by the Petitioner deploys multiple
processing technologies namely composting, RDF, thermal processing
(Waste to Energy) in tandem which will result in maximising the
recoverable from municipal waste such as compost and power, and to
minimize the residues so as to reduce the burden on sanitary landfill.
4. The land required for the project is provided on lease. The handing
over letter for the land of 100 acres at Bawana is dated December 31,
2009, which is issued by the erstwhile Municipal Corporation of Delhi
[(MCD) now North Delhi Municipal Corporation] for development of
Integrated MSW Processing Plant.
5. It is now pertinent of mention herein that the Central Government has
issued an amended National Tariff Policy dated 28.01.2016. The
relevant provision of the said policy is setout herein below:
“6.4 Renewable sources of energy generation
including Co-generation from renewable energy
sources:
…
(ii) Distribution Licensee(s) shall compulsorily procure 100% power
produced from all the Waste-to-Energyplants in the State, in the ratio
of their procurement of power from all sources including their own, at
the tariff determined by the Appropriate Commission under Section 62
of the Act.”
6. The Petitioner states that, in the meantime, certain proceedings
relating to waste-to-energy power plants were initiated before the
Hon’ble National Green Tribunal. The said proceedings were numbered
as Original Application No. 22(THC) of 2013, wherein the Petitioner
was also made a party. In the said proceedings, the Hon’ble National
Green Tribunal examined the status of the power plant of the
Petitioner, along with two other waste-to-energy plants situated at
Okhla and Ghazipur, Delhi.
In the above proceedings, the Hon’ble National Green Tribunal passed
an order dated 04.04.2016 wherein directions were issued to this
Hon’ble Commission to determine tariff of the Petitioner for the
purposes of sale to the Delhi Distribution licensees. The Petitioner was
also directed to file an appropriate petition before this Hon’ble
Commission for determination of its tariff. Accordingly, in the light of
the said directions, the Petitioner is filing the present petition.
It is further submitted that in the aforementioned order, the Hon’ble
National Green Tribunal also directed the Municipal Corporation, Delhi
to file a petition before this Hon’ble Commission in order to seek an
observation of this Hon’ble Commission regarding the revenue sharing
percentage between the Petitioner and the Municipal Corporation,
Delhi as per the Concession Agreement dated 17.07.2009.
It is stated that the present petition concerns with the determination of
tariff of the Petitioner’s power plant and other related issues, while the
Municipal Corporation, Delhi shall institute separate proceedings qua
the issue of revenue sharing.
Determination of Capital Cost
7. The Capital Cost incurred for the project with detailed break up for
Land and Site development, Building and Civil Works, Plant and
Machinery Cost, Preliminary and Pre-operative expenses, Contingency
and Interest during construction (IDC) cost (but excluding Working
Capital Margin) works out as Rs.39,271 Lakhs. The detailed rationale
and analysis of each parameter for the Project cost is provided in
Schedule – 1 of the present petition. The above capital cost
computation is as per the certificate issued by the auditors of the
Petitioner.
8. The Petitioner states that it has infused a total Equity of Rs. 9,500
Lakhs in the Project. The balance of the Project Cost (till March 31,
2016) amounting to Rs. 29,771 Lakhs has been funded by lenders as
Debt. This gives a Debt – Equity Ratio of 75.81 : 24.19, which is well
within the normative Debt-Equity Ratio of 70:30in line with standard
regulatory norms considered for power generation projects.It is stated
that A part of the debt component required for the project was raised
from IndusInd Bank led consortium.
9. The power plant of the Petitioner is based on Municipal Solid Waste
(MSW) which comprises heterogeneous mixture of MSW, which causes
wear and tear of the Boiler and other equipments in the plant. In view
of this abrasive nature of feeding fuel and other cost components
involved, the Operation and Maintenance Cost estimated for the power
plant of this nature are high which have been elaborated in
subsequent chapters.
10. Petitioner has submitted that the Hon’ble Central Electricity Regulatory
Commission has notified Tariff Regulations outlining terms and
conditions for determination of renewable projects based on municipal
solid waste on 07.10.2015 through the CERC (Terms and Conditions
for Tariff determination from Renewable Energy Sources) (Fourth
Amendment) Regulation, 2015 (hereinafter referred to as “CERC MSW
Regulations”). Hence, for parameters such as O&M cost, O&M cost
escalation, Depreciation, Interest on Debt, working capital
requirement, Interest rate on Working Capital, rate of Interest for Debt
and Working Capital requirement, Return on Equity, etc., the Petitioner
has relied on the norms from the said regulations.
It is pertinent to mention herein that this Hon’ble Commission
does not have any regulations qua MSW power plants, and as such the
tariff of the Petitioner has to be determined as per the provisions of
Section 61 of the Electricity Act 2003, which includes taking guidance
from the CERC MSW Regulations.
11. The break-up of the capital cost of the Petitioner is provided in
Schedule – 1 of the petition, alongwith its justification. It is stated that
as per the said Schedule, the per MW capital cost of the project of the
Petitioner is around Rs.16.36 Crores. The Petitioner submits that as
per the CERC MSW Regulations, the normative capital cost for MSW
plants is Rs. 15 Crores, however, as per the provisions of Section
61(d) of the Electricity Act 2003, the Petitioner is entitled to the actual
project specific tariff as the Petitioner is entitled to recover the cost of
generation which includes the actual capital cost.
12. Summary of financial data (Tariff Design) submitted by the Petitioner
A. total works cost estimated
13. Prayers of the Petitioner
(a) direct the Respondent Licensees to execute Power Purchase
Agreement(s) with the Petitioner,
(b) determine the tariff payable by the concerned distribution
licensee for sale of electricity from the Petitioner’s power plant;
(c) In the interim, direct as follows:
1. direct SLDC and DTL to synchronize the power plant of the
Petitioner with the Delhi STU grid;
2. pass orders for provisional tariff to be payable by the
Respondent licensees, effective from the date of
synchronisation;
(d) pass such further and other orders, as the Hon’ble Commission
may deem fit and proper, keeping in view the facts and
circumstances of the case.
*********