At ₹3.85, CERC Approves 7% Hike in APPC for Open Access Solar in 2020-21

In its order notified last week, the Central Electricity Regulatory Commission (CERC) has set the national Average Power Purchase Cost (APPC) for open access at ₹3.85/kWh. This implies that for wind or solar generators that are regional entities and selling power under open access, which is not accounted for RPO compliance of obligated entities, and for captive power plants where PPAs do not exist, settlement shall be done at APPC determined at the national level. It is part of CERC’s remit to determine the APPC for settlement of charges at national level.

The APPC would be applicable during the financial year (FY) 2021-22 or until further orders for deviation settlement regarding open access and captive wind and solar generators fulfilling regional entities’ requirements.

The APPC is usually determined by computing the average APPC of all states and union territories, weighted by the conventional power purchased by the respective states and union territories. It is usually a point of contention with many states still not really welcoming it as it should be.

APPC excludes the cost of generation or procurement from renewable energy sources and transmission charges, as it is supposed to be derived from the cost from conventional power sources. Ever since the commission first notified the APPC for 2015-16 at Rs 3.48, the cost has seen a stead increase in subsequent years, to arrive at the current rate of Rs 3.85. Which seems to be broadly in line with inflation rates too.

In arriving at its order, the commission rejected the suggestion from Power Company of Karnataka Limited (PCKL), which had requested it to consider determination of National APPC based on actual costs instead of approved cost of power purchase. PCKL has also requested to consider tariff obtained through competitive bidding in respect of wind and solar power projects or rate determined under generic tariff by CERC whichever is lower. This would have led to a lower cost, but possibly impacted prospects for developers in the open access market too.

Most other suggestions were about updating relevant data for individual states, which the CERC duly incorporatedin its calculations.

View state wise power purchase cost here