1. REGULATORY FRAMEWORK AND KEY CHALLENGES (MUNICIPAL SOLID WASTE TO ENERGY PROJECT DEVELOPMENT) One Day Workshop on Waste to Energy Pune 19, May 2016 Surendra Pimparkhedkar Fellow & Head, CRP, WISE

2. 2 Presentation Plan Statutory / Regulatory Provisions for MSW to Energy Project Regulatory Approach for Tariff determination Current Status of MSW Project Development Issues and Challenges

3. Daily generation of Waste by some major States in India Name of the StateQuantity Generated (TPD) Collected (TPD)Treated (TPD) Maharashtra26,82014,9004,700 (17.5%) Uttar Pradesh19,180191805197 (27%) Tamil Nadu14,532142341607 (11%) Andhra Pradesh11,50010,6569418 (81%) Gujarat9227 1354 (14.6%) All India1,44,16511574232,871 (23%) Source : CPCB Annual Report 2013-14

4. Provisions under MSW (Management & Handling Rules 2000 )  4(i) Every municipal authority shall, within the territorial area of the municipality, be responsible for the implementation of the provisions of these rules, and for any infrastructure development for collection, storage, segregation, transportation, processing and disposal of municipal solid wastes  Municipal solid waste generated in a city or a town, shall be managed and handled in accordance with the compliance criteria and the procedure laid down in Schedule-II.  Schedule-II specifies compliance criteria for collection, segregation,storage transportation,processing & Disposal of Municipal Solid Waste  Criteria for processing waste recommends that suitable technology or combination of such technologies shall be adopted to make use of wastes so as to minimize burden on landfill  In case of biodegradable waste : processed by composting, vermicomposting, anaerobic digestion or any other appropriate biological processing for stabilization of wastes.  Mixed waste containing recoverable resources shall follow the route of recycling. Incineration with or without energy recovery including pelletisation

5. Tariff related provision under EA 2003 The appropriate commission shall subject to provision of this Act specify the terms and conditions for determination of tariff and in doing so, shall be guided by (h) promotion of co- generation and generation of electricity from Renewable source of energy Section 61(h) The appropriate Commission shall determine the tariff in accordance with the provision of this Act for – (a) supply of electricity by a generating company to a distribution licensee Section 62(1)(a) Notwithstanding anything contained in section 62, the Appropriate Commission shall adopt a tariff if such tariff has been determined through transparent process of bidding in accordance with the guidelines issued by the Central Government. Section (63)

6. Provision under Revised Tariff Policy Jan 2016 Distribution Licensee(s) shall compulsorily procure 100% power from all Waste to Energy Plants in the state, in the ratio of their procurement of Power from all sources including their own at the Tariff determined by Appropriate Commission under Section 62 of the Act. Clause 6.4 (1) (ii) Appropriate Commission may also provide for a suitable regulatory framework for encouraging emerging RE technologies by specifying Technology based “ REC Multiplier’ based on technology or ‘Vintage based REC Multiplier’ based on year of commissioning of plant Clause 6.4 (1) (iv) States shall eadavour to procure power through competitive bidding to keep the tariff low, except from the Waste to Energy Plant. Competitive bidding to be initiated from the date to be notified by the Central Government Clause 6.4 (2)

7. General Framework for Integrated MSW management (Niti Ayog’s Task force on WTE)

8. Options for processing of MSW Aerobic /Vermi Composting for wet biodegradable Waste Biomethanation Incineration (Mass combustion or RDF based combustion) Advanced Thermal Processes ( Pyrolysis, Plasma Arc Gasification) Choice of Decentralized or Centralized Processing of Waste Combination of Aforesaid technologies /processes

9. Criteria for selection of the WTE bid in PPP model Tariff based competitive bidding As practiced by Delhi ULBs in past and in Andhra Pradesh recently Limitations in Role of State Electricity Regulatory Commission Tipping Fee based bidding Polluters pay principal – tipping fee /gate fee born by community - Global model Practiced by majority of states in India for allotment of WTE project.

10. Tariff Setting Approach followed by Regulatory Commissions CERC PERC/MPERC Provision for generic tariff as well as Project Specific Tariff Regulations specifies normati ve Technical and Financial parameter for Tariff Determination from Power projects based on MSW and RDF Capital Cost Indexation mechanism for revision of CC on based on WPI of steel and E & M equipment MERC / GERC Project Specific Tariff on case to Case basis The technical Parameter shall be specified in the respective Tariff order whereas the financial parameters specified for other RETs in the Regulations shall act as Ceiling

11. Normative Parameters for MSW Projects - CERC Regulations ParameterPower Project utilizing Municipal Solid Waste Power Project utilizing Refuse Derived Fuel Capital CostRs 1500 lakhRs 900 lakh PLFDuring stabilization – 65%; from second year onwards – 75% During stabilization – 65%; from second year onwards – 80% Auxiliary Consumption15% of gross generation Station Heat Rate4200 Kcal/kWh O&M6% of normative capital cost with escalation at the rate of 5.72% in subsequent year. Calorific ValueNA2500 kCal/kg Fuel CostNARs 1800 /MT for FY 2015-16 with escalation at the rate of 5% for subsequent year. Tariff for FY 2015-16Levelised Tariff Rs.6.82Levelised Fixed cost – Rs.4.43 /kWh plus variable cost Rs.3.46 for FY 2015-16; total tariff – Rs.7.88/kWh

12. MSW Tariff Comparison Sr No SERCProject DeveloperCapacity (MW ) Location /TechnologyCapital Cost (Rs lakh / MW) Approved tariff (Rs / kWh) 1GERCHanjer Green Power Pvt. Ltd 15Surat / RDF690 (power plant) 6.80 2GERCAbellon Clean Ahmedabad Limited 13.8Ahmedabad / Incineration 14005.86 3GERCRGE Surat Private Limited 11.5Surat / Incineration17787.74 4BERCPatna Green Energy Private Limited 11.5Patna / Incineration17866.25 5MERCSolapur Bioenergy Pvt Ltd 2.83Solapur / Biomethanation 12774.88 6MERCRochem Green Energy Pvt Ltd 8.97Pune / Gasification 14435.86

13. Operational MSW Plants in India Name of ProjectCapacity ( MW) LocationTechnologyStatus Jindal Power Project, Okhla 20.9 MWOkhala New Delhi RDF based Combustion Commissioned Solapur Bio energy Systems Pvt. Ltd 2.83 MWSolapur MS BiomethanationCommissioned in 2013 Rochem Green Energy Pvt. Ltd 2.6 MWPune MSGasificationCommercial operation is not started yet IL &FS, Gazipur MSW based Power Plant 12 MWGazipur New Delhi RDF based combustion Trial Run Essel Infra Pvt. Ltd9.7 MWJabalpur MP Mass Combustion About to Commission in next couple of months

14.  Lack of Standard RFQ, RFP and CA as well as scientific study to know the characteristics of waste by ULBs  Assured supply of committed quantity /quality of Waste.  Difficulties in achieving Financial Closure in absence of firm PPA with DISCOMs.  Project Specific Tariff or Generic Tariff ?  DISCOMs prefer other least cost RE options over MSW based power for meeting RPO  Escalation of tipping fee - to be linked to price of fuel and WPI  Timely revenue payments by DISCOMs – provision for an Escrow Account  Supervision of performance of Concessionaire particularly in maintaining the emission standards in prescribed limits. Issues and Challenges

15. Way Forward  Integrated Municipal Waste Management  Standard model documents for RFQ, RFP &CA  Adherence to MSW Rules  Scheme of Financial support  Appropriate tariff Structure  separate RPO or REC multiplier for MSW  Net metering policies for small scale KW size decentralized Waste to Energy projects  Performance Monitoring Mechanism  Incentives and Penalties

16. Thank you