annexure vii final rec
TRANSCRIPT
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TARIFF DETERMINATION FOR SOLAR PHOTO VOLTAIC POWER PLANTS LOCATED IN RAJASTHAN
25 yrs Levelised Tariff (Rs/kWh) 6.96
Accelerated Depreciation(Rs/kWh) 0.87
S. No.Assumption
HeadSub-Head Sub-Head (2) Unit
Base Case
(SPV)
1 Power Generation
Capacity
Installed Power Generation Capacity MW 1.1
CUF % 19.00%
Deration p.a. after 2nd year % 0.70%
Auxiliary Consumption % 0.25%Tariff Period Years 25
Life of Power Plant Years 25
2 Project Cost
Capital Cost/MW inc Land,Trans &Connectivity charge Rs Lacs/M 875
Project Cost Power Plant Cost Rs Lacs 937.5
Tranmssion line Cost Rs Lacs/M 25
Connectivity Charges Rs Lacs/M 0
3 Sources of Fund
Debt: Equity
Debt % 66.00%
Equity % 34.00%
Total Debt Amount Rs Lacs 618.75
Total Equity Amout Rs Lacs 318.75
Funding Options-1 (Domestic Loan Source-1)
Loan Amount Rs Lacs 618.75
Moratorium Period years 0Repayment Period(incld Moratorium) years 10
Intrest Rate % 9.00%
Funding Options-2 ( Equity Finance )
Equity amount Rs Lacs 318.75
Return on Equity for first 10 yrs % p.a 13.00%
Return on Equity from 11th yr onwar% p.a 13.00%
Discount Rate (equiv. to WACC) 10.36%
4 Financial AssumptionsFiscal Assumptions
Income Tax % 30.90%
MAT Rate (for yr-1) % 19.93%
MAT Rate (for yr-2 to yr-10) 18.54%
80 IA benefits Yes/No Yes
Accelerated Depreciation(for 20 yearsRs/kWh 0.00
Depreciation
Depreciation Rate(upto 12-yrs) % 5.28%
Depreciation Rate(after 12-yrs) % 2.05%Years for 5.28% SLM rate years 12
5 Working Capital
For Fixed Charges
O&M Charges Months 1
Maintenance Spare (% of O&M expenses) 15.00%
Receivables for Debtors Months 1.5
Intrest On Working Capital % 8 00%
Annexure-VII
Order - Solar Tariff
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TARIFF DETERMINATION FOR SOLAR PHOTO VOLTAIC POWER PLANTS LOCATED IN RAJASTHAN
Units Generation Unit Year---> 1 2 3 4 5 6 7 8 9 10 11 12 13
Aux Consumption % 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% Installed Capacity MW 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1
Deration factor % 0.70% 1 1.000 0.993 0.986 0.979 0.972 0.965 0.959 0.952 0.945 0.939 0.932 0.926
Generation MU 1.83 1.83 1.81 1.80 1.79 1.78 1.76 1.75 1.74 1.73 1.71 1.70 1.69
Cost of generation Unit Year---> 1 2 3 4 5 6 7 8 9 10 11 12 13
O&M Expenses Rs Lakh 12.25 12.65 13.08 13.54 14.04 14.57 15.15 15.76 16.42 17.12 17.87 18.76 19.71
Depreciation Rs Lakh 61.88 61.88 61.88 61.88 61.88 61.88 61.88 61.88 61.88 61.88
Interest on term loan Rs Lakh 52.90 47.33 41.77 36.20 30.63 25.06 19.49 13.92 8.35 2.78 0.00 0.00 0.00
Return on Equity Rs Lakh 41.44 41.44 41.44 41.44 41.44 41.44 41.44 41.44 41.44 41.44 41.44 41.44 41.44Total Cost of generation Rs Lakh 168.47 163.30 158.16 153.05 147.98 142.94 137.95 132.99 128.08 123.22 59.31 60.20 61.15
Per unit Cost of generation Rs/kWh 9.22 8.94 8.72 8.50 8.28 8.05 7.82 7.60 7.37 7.14 3.46 3.54 3.62
Levellised cost of generation (Rs/kWh) (25 yrs) 6.96
Calculations showing the admissible gains of accelerated depreciation under Income Tax Act for solar PV power plants
First Year 33.22%
Capital cost Rs 100.00 Discount Rate 13.73% Income Ta 30.90% Accelerate 80.00% CUF
thereafter
Year--> 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Depreciation-Normative 5.28 5.28 5.28 5.28 5.28 5.28 5.28 5.28 5.28 5.28 5.28 5.28 2.05 2.05 2.05
Depreciation-Accelerated 80.00 10.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Depreciation difference admissible for claiming
benefit 74.72 4.72 (5.28) (5.28) (5.28) (5.28) (5.28) (5.28) (5.28) (5.28) (5.28) (5.28) (2.05) (2.05) (2.05)
Effective Income Tax Rate 33.22% 30.90% 30.90% 30.90% 30.90% 30.90% 30.90% 30.90% 30.90% 30.90% 30.90% 30.90% 30.90% 30.90% 30.90%
Income Tax gain 24.82 1.53 (1.67) (1.63) (1.63) (1.63) (1.63) (1.63) (1.63) (1.63) (1.63) (1.63) (0.63) (0.63) (0.63)
Discount Factor 1.00 0.91 0.82 0.74 0.67 0.61 0.55 0.50 0.45 0.41 0.37 0.34 0.31 0.28 0.25
Discounted Tax gain 24.82 1.39 (1.37) (1.21) (1.10) (1.00) (0.90) (0.82) (0.74) (0.67) (0.61) (0.55) (0.19) (0.18) (0.16)
Levelized ITAX gain 1.76
Solar generation MU 1.83 1.83 1.81 1.80 1.79 1.78 1.76 1.75 1.74 1.73 1.71 1.70 1.69 1.68 1.67
Solar PV
CUF 19.00%
Capital cost (Rs in Lakhs/MW) 875.00
Levelized ITAX benefit ,Rs Lakh 15.37
Levelized generation,LU 17.58
Levelised ITAX benefit in Rs/kWh 0.87
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TARIFF DETERMINATION FOR SOLAR PHOTO VOLTAIC
Units Generation Unit
Aux Consumption %Installed Capacity MW
Deration factor %
Generation MU
Cost of generation Unit
O&M Expenses Rs Lakh
Depreciation Rs Lakh
Interest on term loan Rs Lakh
Return on Equity Rs LakhTotal Cost of generation Rs Lakh
Per unit Cost of generation Rs/kWh
Levellised cost of generation (Rs/kWh) (25 yrs) 6.96
Calculations showing the admissible gains of accelerated depreci
Capital cost Rs 100.00
Year--> 1
Depreciation-Normative 5.28
Depreciation-Accelerated 80.00
Depreciation difference admissible for claiming
benefit 74.72
Effective Income Tax Rate 33.22%
Income Tax gain 24.82
Discount Factor 1.00
Discounted Tax gain 24.82
Levelized ITAX gain 1.76
Solar generation MU 1.83
Solar PV
CUF 19.00%
Capital cost (Rs in Lakhs/MW) 875.00
Levelized ITAX benefit ,Rs Lakh 15.37
Levelized generation,LU 17.58
Levelised ITAX benefit in Rs/kWh 0.87
25
0.25%1.1
0.851
1.55
25
36.62
0.00
41.4478.06
5.02
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TARIFF DETERMINATION FOR SOLAR PHOTO VOLTAIC POWER PLANTS LOCATED IN RAJASTHAN
Operation and Maintenance Expenses
Particular Unit Year---> 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
O&M expense for power Rs Lakh 9.51 10.06 10.63 11.24 11.89 12.57 13.28 14.04 14.85 15.70 16.59 17.54 18.55 19.61 20.73 21.92
Insurance Charges Rs Lakh 2.74 2.59 2.45 2.30 2.15 2.01 1.86 1.71 1.57 1.42 1.28 1.22 1.16 1.10 1.05 0.99
Total O&M expense Rs Lakh 12.25 12.65 13.08 13.54 14.04 14.57 15.15 15.76 16.42 17.12 17.87 18.76 19.71 20.71 21.78 22.90
Particulars Unit Year---> 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Opening balance Rs Lakh 913 863.81 815.12 766.42 717.73 669.04 620.35 571.65 522.96 474.27 425.58 406.37 387.15 367.74 348.33 328.92
Depreciation Rs Lakh 48.69 48.69 48.69 48.69 48.69 48.69 48.69 48.69 48.69 48.69 19.21 19.21 19.41 19.41 19.41 19.41
Closing balance Rs Lakh 863.81 815.12 766.42 717.73 669.04 620.35 571.65 522.96 474.27 425.58 406.37 387.15 367.74 348.33 328.92 309.51
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TARIFF DETERMINATION FOR SOLAR PHOTO VOLTAIC POWER PLANTS LOCATED IN RAJASTHAN
Particular Unit Description
Power Plant Cost Rs Lakh 913
Life of Plant Years 25
Years -----------------> Unit 1 2 3 4 5 6 7 8 9 10
Depreciation for power plant Rs Lakh 48.18 48.18 48.18 48.18 48.18 48.18 48.18 48.18 48.18 48.18
Total Depreciation Rs Lakh 48.69 48.69 48.69 48.69 48.69 48.69 48.69 48.69 48.69 48.69
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TARIFF DETERMINATION FOR SOLAR PHOTO VOL
Particular Unit
Power Plant Cost Rs Lakh
Life of Plant Years
Years -----------------> Unit
Depreciation for power plant Rs Lakh
Total Depreciation Rs Lakh
11 12 13 14 15 16 17 18 19 20
18.70 18.70 18.70 18.70 18.70 18.70 18.70 18.70 18.70 18.70
19.21 19.21 19.41 19.41 19.41 19.41 19.41 19.41 19.41 19.41
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TARIFF DETERMINATION FOR SOLAR PHOTO VOLTAIC POWER PLANTS LOCATED IN RAJASTHAN
Long-Term Debt Schedule
Particular Unit Year---> 1 2 3 4 5 6 7 8 9 10 11 12
Opening Balanc Rs Lakh 618.75 557 495 433 371 309 248 186 124 62 0 0
Repayment Rs Lakh 61.88 61.88 61.88 61.88 61.88 61.88 61.88 61.88 61.88 61.88 0.00 0.00
Closing Balance Rs Lakh 557 495 433 371 309 248 186 124 62 0.0 0 0
Interest Rs Lakh 52.90 47.33 41.77 36.20 30.63 25.06 19.49 13.92 8.35 2.78 0.00 0.00
Solar_PV_aSi
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TARIFF DETERMINATION FOR SOLAR PHOTO VOLTAIC POWER PLANTS LOCATED IN RAJASTHAN
Working Captial Requirement
Particular Unit Year---> 1 2 3 4 5 6 7 8 9 10
O&M expense for power plant Rs Lakh 0.79 0.84 0.89 0.94 0.99 1.05 1.11 1.17 1.24 1.31
Receivables Rs Lakh 21.06 20.41 19.77 19.13 18.50 17.87 17.24 16.62 16.01 15.40
Maintenance Spare Rs Lakh 1.43 1.51 1.60 1.69 1.78 1.88 1.99 2.11 2.23 2.35
Total Working Capital Rs Lakh 23.28 22.76 22.25 21.75 21.27 20.80 20.34 19.90 19.47 19.06
Interest Rate % 8.00%
Interest on Working Capital Rs Lakh 1.86 1.82 1.78 1.74 1.70 1.66 1.63 1.59 1.56 1.53
Solar_PV_aSi
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TARIFF DETERMINATION FOR SOLAR PHO
Working Captial Requirement
Particular Unit
O&M expense for power plant Rs Lakh
Receivables Rs Lakh
Maintenance Spare Rs Lakh
Total Working Capital Rs Lakh
Interest Rate %
Interest on Working Capital Rs Lakh
11 12 13 14 15 16 17 18 19 20
1.38 1.46 1.55 1.63 1.73 1.83 1.93 2.04 2.16 2.28
7.41 7.53 7.64 7.77 7.90 8.04 8.19 8.35 8.52 8.70
2.49 2.63 2.78 2.94 3.11 3.29 3.48 3.67 3.88 4.11
11.29 11.62 11.97 12.34 12.74 13.16 13.60 14.07 14.56 15.08
0.90 0.93 0.96 0.99 1.02 1.05 1.09 1.13 1.16 1.21
Solar_PV_aSi
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TARIFF DETERMINATION FOR SOLAR PHOTO VOLTAIC POWER PLANTS LOCATED IN RAJASTHAN
Return on Equity
Praticular Unit Year---> 1 2 3 4 5 6 7 8 9 10 11 12 13 14
Pre-tax ROE Rs Lakh 41.44 41.44 41.44 41.44 41.44 41.44 41.44 41.44 41.44 41.44 41.44 41.44 41.44 41
Income tax component for Gross up Rs Lakh 10.31 9.43 9.43 9.43 9.43 9.43 9.43 9.43 9.43 9.43 18.53 18.53 18.53 18
ROE (Grossed up for I.Tax) Rs Lakh 51.75 50.87 50.87 50.87 50.87 50.87 50.87 50.87 50.87 50.87 59.97 59.97 59.97 59
1 2 3 4 5 6 7 8 9 10 11 12 13 14
CC 1600 1600 1600 1600 1600 1600 1600 1600 1600 1600 1600 1600 1600 16
roe 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 1
tax rate 19.93% 18.54% 18.54% 18.54% 18.54% 18.54% 18.54% 18.54% 18.54% 18.54% 30.90% 30.90% 30.90% 30.9
grossed up 16.24% 15.96% 15.96% 15.96% 15.96% 15.96% 15.96% 15.96% 15.96% 15.96% 18.81% 18.81% 18.81% 18.8
ROE 77.932 76.602 76.602 76.602 76.602 76.602 76.602 76.602 76.602 76.602 90.304 90.304 90.30391 90.303
62.4 62.4 62.4 62.4 62.4 62.4 62.4 62.4 62.4 62.4 62.4 62.4 62.4 6
15.532 14.202 14.202 14.202 14.202 14.202 14.202 14.202 14.202 14.202 27.904 27.904 27.90391 27.903
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Annexure-VIIContd.
Calculations showing the admissible gains of accelerated depreciation under Income Tax Act for solar PV power plants
Capital cost Rs/MW 100 Discount Rate ###### Income Tax rate@ Accelerated depreciation 80% CUF 19.00% Aux 0.25%
Year--> 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Depreciation-Normative 5.28 5.28 5.28 5.28 5.28 5.28 5.28 5.28 5.28 5.28 5.28 5.28 2.05 2.05 2.05 2.05 2.05 2.05 2.05 2.05
Depreciation-Accelerated 80.00 10.00 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Depreciation difference
admissible for claiming 74.72 4.72 (5.28) (5.28) (5.28) (5.28) (5.28) (5.28) (5.28) (5.28) (5.28) (5.28) (2.05) (2.05) (2.05) (2.05) (2.05) (2.05) (2.05) (2.05)
Effective Income Tax Rate 33.22% 32.45% 31.67% 30.90% 30.90% 30.90% 30.90% 30.90% 30.90% 30.90% 30.90% 30.90% 30.90% 30.90% 30.90% 30.90% 30.90% 30.90% 30.90% 30.90%
Income Tax gain 24.82 1.53 (1.67) (1.63) (1.63) (1.63) (1.63) (1.63) (1.63) (1.63) (1.63) (1.63) (0.63) (0.63) (0.63) (0.63) (0.63) (0.63) (0.63) (0.63)
Discount Factor 1.00 0.91 0.82 0.74 0.67 0.61 0.55 0.50 0.45 0.41 0.37 0.34 0.31 0.28 0.25 0.23 0.21 0.19 0.17 0.15
Discounted Tax gain 24.82 1.39 (1.37) (1.21) (1.10) (1.00) (0.90) (0.82) (0.74) (0.67) (0.61) (0.55) (0.19) (0.18) (0.16) (0.14) (0.13) (0.12) (0.11) (0.10)
Levelized ITAX gain 1.76
Solar generation MU 1.83 1.83 1.81 1.80 1.79 1.78 1.76 1.75 1.74 1.73 1.71 1.70 1.69 1.68 1.67 1.66 1.64 1.63 1.62 1.61
Solar PV
CUF 19.00%
Capital cost (Rs in 875.00
Levelized ITAX benefit ,Rs 15.37
Levelized generation,LU17.58
Levelised ITAX benefit in
Rs/kWh0.87