Before the Maharashtra Electricity Regulatory Commission

Page 1 of 101

Before the

Maharashtra Electricity Regulatory Commission (MERC)

TARIFF PETITION FOR 750 TPD MSW BASED WASTE PROCESSING PLANT LOCATED AT

PUNE

FILED BY:

PUNE BIO ENERGY SYSTEMS PVT LIMITED

REGISTERED OFFICE:

PUNE BIOENERGY SYSTEMS PRIVATE LIMITED

4TH FLOOR, S.P HEIGHTS, OLD PUNE-MUMBAI HIGHWAY,

KASARWADI

PUNE-34

Petition for Determination of Tariff for 750 TPD waste processing plant of PBESPL, Pune

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BEFORE THE HON’BLE MAHARASHTRA ELECTRICITY REGULATORY COMMISSION (MERC)

Filling No. Case No. of 2020

PUNE BIOENERGY SYSTEMS PRIVATE LIMITED

4th FLOOR, S.P HEIGHTS, OLD PUNE-MUMBAI HIGHWAY,

KASARWADI

PUNE-34 …Petitioner

IN THE MATTER OF:

Petition of Pune Bioenergy systems Pvt Ltd. (PBESPL) under Section 62(1) of the Electricity Act (EA), 2003 and Regulations 8.1 and 8.2 of the MERC (Terms and Conditions for Determination of Renewable Energy (RE) Tariff) Regulations (‘RE Tariff Regulations), 2015 and amendments issued therein for determination of Tariff for supply of electricity to Distribution Licensees in Maharashtra from 750 TPD capacity of Municipal Solid Waste processing project to be commissioned at Pune.

Pune Bioenergy systems Private Limited (PBESPL),

4th FLOOR, S.P HEIGHTS, OLD PUNE-MUMBAI HIGHWAY,

KASARWADI

PUNE-34

Respondents: -

1. Maharashtra State Electricity Distribution Co. Ltd, Mumbai

2. Maharashtra State Electricity Transmission Co. Ltd, Mumbai

3. Maharashtra State Load Dispatch Centre, Mumbai

The Petitioner, M/s. Pune Bio energy systems Private Limited (PBESPL) most

respectfully submits as under


Page 3 of 101

Contents

1. FACTS OF THE CASE ............................................................................................................. 9 2. PRAYERS .............................................................................................................................. 12 3. BACKGROUND .................................................................................................................... 15 4. SCOPE OF WORK OF CONCESSIONAIRE ............................................................................ 21 5. OVERVIEW OF SOLID WASTE MANAEMENT IN INDIA .................................................... 22 6. WASTE TO ENERGY TECHNOLOGIES PREVELANT IN INDIA .......................................... 25 7. UNIQUE FEATURES OF PUNE MSW PLANT AND BENEFITS ............................................ 28 8. PROJECT-SPECIFIC TARIFF DETERMINATION .................................................................. 31 9. PROMOTERS OF THE PROJECT ........................................................................................... 34 10. SELECTION OF TECHNOLOGY FOR WASTE PROCESSING PLANT .................................. 35 11. BRIEF PROFILE OF THE TECHNOLOGY PROVIDER .......................................................... 40 12. WASTE TO ENERGY PROCESS AND SELECTED TECHNOLOGY DESCRIPTION .............. 42 13. LOCATION OF THE WASTE PROCESSING SITE ................................................................. 48 14. LAND UTILIZATION PLAN .................................................................................................. 49 15. PROJECT ATTRIBUTES ........................................................................................................ 50 16. PROJECT PARAMETERS ...................................................................................................... 54 17. CAPITAL COST OF THE PROJECT ....................................................................................... 56 18. FIXED OPERATING COST OF THE PROJECT ...................................................................... 66 19. OTHER COMMERCIAL ASPECTS ........................................................................................ 90 20. PROPOSED TARIFF .............................................................................................................. 92 21. IN SUMMARY ....................................................................................................................... 92 ANNEXURE-A MEMORANDUM AND ARTICLES OF ASSOCIATION (enclosed) .......................... 95 ANNEXURE-B MSW TEST REPORT .............................................................................................. 96 ANNEXURE-C PHOTOGRAPHS OF THE VISIT ............................................................................. 97 ANNEXURE-D DETAILED PROJECT REPORT (enclosed) .............................................................. 98 ANNEXURE E – CONCESSION AGREEMENT (enclosed) ............................................................... 99 ANNEXURE-F PLANT LAYOUT PLAN (enclosed) ........................................................................ 100 ANNEXURE-G MERC FORM 2.1 (enclosed) .................................................................................. 101 ANNEXURE- H MERC FORM 2.2 (enclosed) ................................................................................. 101


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List of tables

Table 1: Compensation from PMC ........................................................................................... 10

Table 2:State-wise generation, collection and treatment of MSW ........................................... 31

Table 3: Characteristics of MSW for the proposed treatment facility ...................................... 35

Table 4: Technologies in WtE Plants........................................................................................ 36

Table 5: EPC offer Snapshot..................................................................................................... 38

Table 6: Minimum area requirement ......................................................................................... 49

Table 7: Project Attributes ........................................................................................................ 50

Table 8: Useful life notified by various commissions .............................................................. 51

Table 9: Project Parameters ...................................................................................................... 54

Table 10: Net EPC Capex for Petition ...................................................................................... 56

Table 11: Break up of capital costs ........................................................................................... 57

Table 12: Comparison of Manpower in WtE plants ................................................................. 59

Table 13: Tax Calculation on EPC package ............................................................................. 60

Table 14: Detailed break up of civil costs ................................................................................ 61

Table 15: Transmission Line Capex ......................................................................................... 62

Table 16: Break up of Misc. Fixed assets ................................................................................. 63

Table 17: Phasing of capex ....................................................................................................... 63

Table 18: IDC Computation Table ........................................................................................... 64

Table 19: O&M Expenses for the plant (in INR lakhs) ............................................................ 67

Table 20: Breakup of Manpower Consideration ....................................................................... 69

Table 21: Break up of O&M Expat Services ............................................................................ 70

Table 22: Cost towards Electricity Charges (startup) ............................................................... 73

Table 23: Break up of R&M Expenses ..................................................................................... 75

Table 24: Per unit O&M ........................................................................................................... 76

Table 25:Per unit O&M cost comparison with Other RE ......................................................... 77

Table 26: O&M escalation rate ................................................................................................. 77

Table 27: Periodic Maintenance Expenses ............................................................................... 79

Table 28: WPI rates ................................................................................................................. 79

Table 29: O&M Transmission cost norms ................................................................................ 80

Table 30: Transmission Line O&M Cost.................................................................................. 80

Table 31: Summary of O&M Expenses .................................................................................... 80

Table 32: Computation of Depreciable amount ........................................................................ 82

Table 33: SBI MCLR Rate ....................................................................................................... 85

Table 34: PLF trends across various regulators ........................................................................ 87

Table 34: Details of Auxiliary Consumption ............................................................................ 87


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List of figures

Figure 1: Status of Waste segregation in Pune ......................................................................... 15

Figure 2: Waste disposal methods in the city ........................................................................... 15

Figure 3: Media snapshots for MSW plants in Pune city ......................................................... 17

Figure 4: Experience center ...................................................................................................... 29

Figure 5: Reciprocating Step Grate assembly ........................................................................... 36

Figure 6: Typical arrangement of a MSW fired boiler & Auxiliaries ...................................... 36

Figure 7: Typical Plant Equipment Layout by GPSPL ............................................................. 40

Figure 8: Role - Greenesol’s as EPC ........................................................................................ 41

Figure 9: Process overview- Block diagram ............................................................................. 42

Figure 10: Pre-Processing of MSW .......................................................................................... 43

Figure 11: Google image of Land Layout of proposed plot ..................................................... 48

Figure 12: Snapshot of outstanding payments to RE generators by MSEDCL ........................ 86


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List of abbreviations

Acronym Description

AEPL Aspirify Environment Pvt Ltd

BOOT Build, Own, Operate & Transfer

C&D Construction & Demolition

CDM Clean Development Mechanism

CERC Central Electricity Regulatory Commission

COD Commercial Operation Date

CPCB Central Pollution Control Board

CPI Consumer Price Index

CWPC M/s. China Western Power Co. Ltd

DCS Distributed Control Systems

DG Diesel Generator

EA Electricity Act

EPC Engineering, Procurement & Construction

GCV Gross Calorific Value

GHG Green House Gas

GPSPL M/s. Greenesol Power Systems Private Limited

HZIPL M/s. Hitachi Zosen India Private Limited

IDC Interest during Construction

IIT Indian Institute of Technology

IS Indian Standard

kCal Kilo Calorie

kg Kilo Gram

kV Kilo Volt

kW Kilo Watt

LCV Lower Calorific Value

LOI Letter of Intent

MCLR Marginal Cost of funds based Lending Rate

MERC Maharashtra Electricity Regulatory Commission

MNRE Ministry of New and Renewable Energy

MoEF Ministry of Environment, Forest and Climate Change

MOSPI Ministry of Statistics and Program Implementation

MSEDCL Maharashtra State electricity Distribution Company Limited

MSETCL Maharashtra State Electricity Transmission Company Ltd.

MSW Municipal Solid Waste


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Acronym Description

MT Metric Tons

MW Mega Watt

MYT Multi Year Tariff

NCL National Chemical Laboratory

NCV Net Calorific Value

NEERI National Environmental Engineering Research Institute

NOC No Objection Certificate

O&M Operation and Maintenance

ORS Organic recycling systems Pvt. Ltd.

p.a. Per annum

PBESPL Pune Bioenergy systems Pvt Ltd.

PMC Pune Municipal Corporation

PPP Public Private Partnership

R&M Repair & Maintenance

RE Renewable Energy

REC Renewable Energy Certificate

RPO Renewable Purchase obligation

SBI State Bank of India

SNCR Selective Non-Catalytic Reduction

SPV Special Purpose Vehicle

Sq Cm. Square Centimeter

SWM Solid Waste Management

TAC Technical Advisory Committee

TL M/s. Thermax Limited

TPD Tons per Day

TPH Tons per hour

ULB Urban Local Body

UNDP United Nations Development Programme

WPI Wholesale Price Index

WtE Waste to Energy

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SECTION-I

FACTS AND PRAYERS OF THE CASE


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1. FACTS OF THE CASE

1.1. Waste processing can help India deal with the increasing garbage disposal problem. Wastes that are generated in India, find their way into land and water bodies without proper treatment, causing severe water and air pollution. The problems caused by solid and liquid wastes can be significantly mitigated through the adoption of environment-friendly waste-processing technologies that will allow treatment of wastes before their disposal.

1.2. Pune Municipal Corporation (PMC), considering the growing need for waste management at Pune, decided to set up a processing and disposal plant for mixed Municipal Solid Waste at Fursungi, Pune on Build, Own, operate and transfer (BOOT) basis.

1.3. In the year 2014, PMC conducted a competitive bidding process and invited proposals for processing of MSW from eligible bidders for effective treatment of waste in the city. PMC received several proposals for establishing the waste processing plant in Pune city.

1.4. After the evaluation of the proposals, PMC has selected Organic Recycling system private limited (ORS) as a successful bidder for processing of waste in Pune city.

1.5. Organic recycling systems Pvt ltd (ORS) and PMC had entered into a Concession agreement for handling 500 TPD of waste on 30th April, 2015. The Concessionaire was allotted 5 Acres land at Urali Devachi (Fursungi landfill) through the land lease agreement No.3250/2015 dated 25th May, 2015 to execute the project for capacity of 500 TPD.

1.6. ORS Private Limited formed an SPV named Pune Bioenergy Systems Pvt limited (PBESPL) to set up the waste processing plant in Pune city. However, ORS was not able to raise funds for the project and manage the operational difficulties arising in the project.

1.7. Therefore, Aspirify Environment acquired controlling stake in PBESPL on 1st Feb, 2016 and took over the concession. Aspirify Environment became shareholder through a Novation agreement signed on 8th July, 2016.

1.8. Thereafter, the concession was enhanced to 750 TPD from 500 TPD as per the approvals issued by Hon’ble Standing committee and Hon’ble General body of PMC through an order issued by Hon. Municipal Commissioner of PMC on 15th April, 2017. PMC has stated a minimum assured quantity of 600 TPD for this project. The revised Letter of Intent (LOI) was issued to the Pune Bio Energy Systems Pvt Ltd for 750 TPD on 28th June, 2018. The authorisation from Maharashtra Pollution Control Board (MPCB) was also granted to operate the facility for processing, recycling, treatment and disposal of waste.

1.9. The original location of the waste processing plant was Fursungi, however, due to opposition of villagers, the location of the Waste processing plant was changed to Ramtekdi on 29th June, 2018 post approval of the Municipal Commissioner. The Petitioner also took authorization from MPCB for the new location for processing, recycling, treatment and disposal of waste.


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1.10. Waste to energy projects were governed as per Municipal Solid Waste (Management and Handling) rules framed by Central Government in accordance with Section 3, 6 and 25 of the Environment (Protection) Act, 1986 (29 of 1986 on 25th Sep, 2000). The current prevailing rules for Management and Handling of Municipal Solid Waste are SWM Rules 2016.

1.11. The Concession agreement was signed in the year 2015, while MSW rules 2000 were in force. Thus, the base capital cost was determined in line with the then prevailing conditions. However, due to factors like change in capacity, change in site location etc., the Concession did not attain finality. Meanwhile applicability of SWM rules, 2016 (in accordance with Section 3, 6 and 25 of the Environment (Protection) Act, 1986 (29 of 1986) notified on 8th April, 2016 made it imperative for the Petitioner to invest in additional process units to comply with raw MSW calorific value, emission standards, odour control, buffer zone/green belt etc. in addition to the previously described specifications.

1.12. The factors such as change in project cost (due to SWM rules 2016), change of project site, & increase in the land area from 5 acres to 10 acres a revised proposal was submitted for consideration to PMC to determine the monetary impact of such changes. To determine the monetary impact, PMC decided to refer the matter to Technical Advisory Committee (TAC) comprising of PPP Expert and scientist from the National Chemical Laboratory (NCL) and also sought assistance from IIT Roorkee.

1.13. PMC has agreed to compensate the Concessionaire with INR 89.95 Crores towards capital cost increase owing to shifting of project location and Change in Law. This was done after the recommendations from TAC and IIT Roorkee report. Break-up of the compensation is as illustrated below:

Table 1: Compensation from PMC Details Capital expenditure

(in Rs. crores) Approved with regards to

Pre-processing & vehicles 52.19 Change in law as major change prescribed in the SWM Rule 2016

Residual storage (civil) 3.70 Complete odour control 12.00 FGT+EMS 15.29 Extra stack height 0.94 Infra. development due to site change 0.68 Change in project site location HT power transmission line due to site change 5.15 Total 89.95

1.14. The additional investment was required by the Petitioner on account of SWM rules, 2016 and change of project location. Since those would be compensated for by PMC, such cost has been excluded from the capital cost claimed in this Petition for the purpose of tariff determination.

1.15. PMC executed revised Concession agreement with PBESPL to incorporate the changes in factors such as site location, land area, project cost for developing waste processing project in Ramtekdi, Pune.

1.16. The Petitioner, PBESPL has its registered office at 4th Floor S.P heights, Old Pune Mumbai highway Kasarwadi, Pune-34. It is promoted by Aspirify Environment Private Limited (AE), with offices in India and Singapore started operations in 2016. Copy of Memorandum of Association and Articles of Association is attached as Annexure -A.


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1.17. Aspirify Environment is a Pune based company. It facilitates sustainable solutions in waste processing projects, water management systems, resource re-generation options and solar power advisory.

1.18. With 750 TPD Waste processing project in Pune & 800 TPD plant in Thane, AE will be one of the largest waste processing company in Maharashtra. It will generate > 25 MW of power.

1.19. The Petitioner has prudently assessed various technologies and relevant parameters while selecting the technology for this project in Pune. The plant design also factors in such systems so as to take care of the acceptability by general public, which had become big challenge for several waste processing plants in the country.

1.20. The Petitioner, humbly submits before the Hon’ble Commission that WtE projects in India are still at developmental stage of their commercial self-sustainability and such projects face higher risks given the feedstock and its seasonality, diversity of the scope of work, terms of concession agreements, conditions of project sites, etc. In this context, it is essential that the view on the tariff is taken on the case to case basis to safeguard its commercial viability.

1.21. The Electricity Act, 2003 as well as the Tariff Policy, 2016, vest in the Hon’ble Commission, the responsibility to balance the interest of the consumers with the interest of the project developers while regulating the tariff of the generating companies. As per Section 61 of Electricity Act 2003,

“The Appropriate Commission shall, subject to the provisions of this Act, specify the terms and conditions for the determination of tariff, and in doing so, shall be guided by the following, namely: - ….

(d) safeguarding of consumers' interest and at the same time, recovery of the cost of electricity in a reasonable manner”

1.22. In light of the above, PBESPL is filing a Petition to the Hon’ble Commission for determination of project specific tariff for power generated from its 750 TPD Municipal Solid Waste processing project for sale of power to MSEDCL.

1.23. In order to explain the key aspects of the proposed project which influence the tariff, PBESPL respectfully seeks an opportunity to present the case prior to finalization of the Tariff Order. This Petition provides, inter-alia, PBESPL’s approach for formulating the present Petition, the broad basis for the projections used and the proposal being made to the Hon’ble Commission.

1.24. A cost reflective tariff is essential for commercial viability of the project and would enable the petitioner to seek a speedy Financial closure for the project.

1.25. With regards to plant connectivity, PBESPL has approached MSETCL for providing evacuation facility for the plant. MSETCL has confirmed availability of power evacuation facility at 132 kV vide Phursungi Substation


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2. PRAYERS In view of the aforesaid facts and circumstances, the Petitioner respectfully prays to the Hon'ble Commission:

1. Take the accompanying Tariff Petition for approval of sale of power to the Distribution Licensee of the state from 750 TPD waste processing plant of PBESPL

2. Approve tariff of approve a Levelized Tariff of INR 9.92 /kWh for the period of __ years, in accordance with the tariff structure adopted by the Hon’ble MERC.

3. Grant must run status to the project, and exemption from Merit Order Dispatch Principles for the entire life of the Project.

4. Grant compensation in tariff on account of increase in any tax rates from the tax rates considered in this petition.

5. Direct DISCOMs to consider the benefit of zero contract demand charges.

6. Direct MSEDCL to provide for payment security provision via LC equivalent of 6 months of bill amount, as suggested in Clause 19.11 in the petition. To safeguard against the delayed payment from procurer, among other things, allow the petitioner to levy delayed payment surcharge of 1.25% on every month of delay on pro-rata basis beyond payment due date.

7. Grant waiver on Wheeling charge, Regulatory Asset Surcharge, Pension Trust Surcharge, Cross Subsidy Surcharge & Additional Surcharge on sale of power for the life of the Project in case of sale of power directly to third party.

8. Grant exemption in case of deviation from the scheduled power under Deviation Settlement mechanism for entire life of the project.

9. Condone any inadvertent omissions/ errors/ shortcomings and permit the Petitioner to add/ change/ modify/ alter portion(s) of this filing and make further submissions as may be required at a later stage; and

10. Pass such an order as the Hon'ble Commission deems fit and proper as per the facts and circumstances of the case, and direct MSEDCL to incorporate specific provisions in Power Purchase Agreement as approved by the Commission.

In order to align the principles behind the tariff Petition, Petitioner respectfully seeks an opportunity to present the case prior to finalization of the Tariff Order.

The Petitioner further declares that the subject matter of the Petition has not been raised by the Petitioner before any other competent forum, and no other competent forum is currently seized of the matter or has passed any orders in relation thereto.

Place: -


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Date: -

Signature

Competent Authority

On behalf of Pune Bioenergy Systems private Limited (PBESPL)

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SECTION-II

BACKGROUND

AND

DESCRIPTION OF THE PROJECT


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3. BACKGROUND

3.1. Pune is the second largest city in the state of Maharashtra and is considered as a cultural capital of the Maharashtra State. Pune is also being developed as a Smart City under the Government of India Smart City programme. As per Pune Municipal Corporation (PMC), the city is currently generating an average of 1678 TPD of waste of which 873 TPD is segregated waste and 805 TPD is unsegregated waste. The below diagram depicts the status of waste processing in Pune: -

Figure 1: Status of Waste segregation in Pune

*Source: -Solid Waste Management strategy plan (2017-2025), PMC

#Figure shown for illustrative purpose only

3.2. The Pune Municipal Corporation (PMC) is managing MSW with the participation of certain private & public organizations. PMC does not have adequate resources to process and dispose mixed MSW generate in the city. It is being dumped at the Urali-Devachi site or remains littered.

3.3. The MSW collection & transportation vehicles transfer the waste in the Bulk Refuse Carrier (BRC) /Stationary Compactor at transfer station/depot* of each 7 nos. of wards stations at Aundh, Ghole Road, Paud Road, Katraj, Hadapsar, Yerwada &Koregaon Park area and delivered to Phursungi landfill site and other processing plant. The below image demonstrates the present method of waste disposal in the city: -

Figure 2: Waste disposal methods in the city


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Source: - http://www.polytestlaboratories.com/testing-labs-in-pune.html

3.4. There are serious concerns regarding protection of public health and environment due to deficient management of MSW in Pune. Environmental protection needs to be given primary importance and adequate support is essential to transform vision into administrative reality.

3.5. Pune Municipal Corporation is striving hard from almost 10 years for successful waste processing plant in the city however local resistance, failure of technology etc. have led to failure of the projects. This has led to increased problems for the Corporation. It is important to refer to the difficulties faced by PMC for setting up a properly functional waste processing facility, to appreciate various aspects of the proposed project: -

i. PMC’s initial efforts to manage solid waste of the city lead to award of 700 TPD waste processing plant in 2010 to Rochem Separation Systems Pvt Ltd. This project also envisaged a 10 MW Waste to Energy Plant based on Pyrolysis Gasification Technology from Germany. However, the project has managed only 250 TPD of waste and has failed to produce any electricity from waste. It never became fully functional owing to several operational challenges. This led accumulation of waste within the premises and increase in emission of foul odour causing problems to the residents in the vicinity. Subsequently, the residents filed petition to close down the plant.

ii. In Aug 2017, NGT directed Rochem to clear the compound waste as it accepted there were issues with the current technology in place.

iii. The state government had allotted land in Urali Devachi and Phursungi villages to the PMC, which started dumping garbage at the site in 1991. However, the villagers moved to court in 1995 demanding the closure of the site on account of potential health hazards due to dumping. The PMC planned for processing of the waste to produce RDF, however the plant had to be closed down as there were no takers for the substandard RDF produced at the site.

iv. In March 2014 it was reported in a study by Pune University that the quality of groundwater in villages close to the MSW landfill at Urali Devachi- Phursungi, Bhekrai Nagar, Manjari Burduk, Shewalewadi and Loni Kalbhor is polluted. The reason for pollution which is spread over 10 km radius from the Landfill site was on account of untreated leachate from the landfill site. The study showed high concentrations of chlorides and other heavy metals in water making it unfit for drinking.


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v. In April 2017 a fire erupted at the Phursungi garbage depot and filled the nearby villages with foul smell and smoke and it took almost 3-4 days for it to be under control. The court ordered PMC to build a compound, to stop open dumping, and to cover all garbage lying at the dumping site by capping.

vi. The agitation further intensified and PMC garbage trucks were stopped by villagers they marked the occasion with a special ‘Jagran Gondhal’ ritual protest.

vii. PMC’s efforts to process waste at Urali Devachi & Phursungi is marked with around 25 times protests and logjam from nearby villagers till date.

viii. PMCs efforts to process waste collected from areas around Baner and Balewadi also hit a roadblock in 2017. The contract awarded by PMC mandated the M/S Noble Exchange to collect waste from these areas and segregate it at a facility in Sus Pashan to be further processed at a unit outside the city at Talegaon-Dabhade. However, the stench emitted from the Sus Pashan facility had become unbearable for the residents in the vicinity, as a result of which there were several protests to shut down the facility. The plant was forcefully shut down by in July 2017. PMC had proposed to set up a vertical garden along the 80 m wall of the plant to mitigate the smell and address the concerns of the citizens. However, this was not considered as a problem solver. The residents have further sought intervention of Chief Minister to permanently close this facility as more than 250 complaints were filed with the Municipal Corporation. The plant is currently in shutdown condition and matter is being contested at NGT.

ix. For PBESPL too, it was envisaged that the waste processing plant would come up at Phursungi and in turn reduce the landfill area of the dumping site, however due to continued public resistance, the site location was shifted to Ramtekdi.

3.6. The Petitioner would demonstrate the media snapshots of the history of MSW plants in the city: -

Figure 3: Media snapshots for MSW plants in Pune city


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Source:- https://punemirror.indiatimes.com/pune/civic/phursungi-uruli-villagers-mark-protest-with-a-jagran-gondhal/articleshow/58386907.cms

Source: - https://timesofindia.indiatimes.com/city/pune/Pune-Municipal-Corporations-waste-to-green-energy-project-in-Hadapsar-is-

limping/articleshow/22131853.cms

Source:-https://timesofindia.indiatimes.com/city/pune/fire-breaks-out-at-rochem-garbage-processing-plant/articleshow/63208870.cms

Source:-https://punemirror.indiatimes.com/pune/civic/waste-to-power-plant-turns-into-dumping-yard/articleshow/59906789.cms


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Source:-https://timesofindia.indiatimes.com/city/pune/Groundwater-pollution-near-citys-landfill-site/articleshow/18961693.cms

3.7. After such a history, PMC has appointed the Petitioner to process 750 TPD of waste generated in the city vide Concession agreement signed on 29th June 2018.

3.8. For PBESPL, it became important to thoroughly assess and evaluate current practices, technologies, methods, economic viability, environmental appropriateness and institutional mechanism for MSW management so as to choose an appropriate model for the city. As mentioned earlier, due to adverse history of the city regarding waste processing plant, the petitioner took substantial efforts in assessment and finalisation of technology to mitigate all major externalities such as pollution, odour, ash generation, etc. that would lead to successful project and also acceptability from common public.

3.9. Further, to avoid any situation detrimental to the well-being citizens living in vicinity of the plant on account of any inadvertent externalities such as odour issues, air pollution and water pollution, the petitioner has decided to take due care as specified below:

State of the art equipment would be deployed to take care of flue gases and ash handling to minimise suspended particulate matter.

The entire plant is enclosed closed with latest odour control equipment to ensure the neighbouring area is odour free.

Collaborate with PMC for scientific treatment and recycle of leachate to maximise reuse of water by the same plant, to avoid any leachate discharge to the ground and reduce requirement of raw water feed to the plant.

The Petitioner has also tied up with Afforestation Consultancy Services to enable the petitioner to come up with an afforestation project with the use of a unique Miyawaki Technique", in the buffer zone of the waste processing plants. The afforestation work would be undertaken according to CPCB guidelines and native plants having high Air Pollution Tolerance Index (APTI) would be planted.


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3.10. The Petitioner undertook comprehensive study of plants operating in India and world-wide before selecting the technology for this project. Since, none of the WtE plants operating in India has made a clear success story as yet. Countries having proven experience of WtE or having waste characteristics similar to that of India were shortlisted. This resulted in a series of visits undertaken by the Petitioner to countries such as South Korea, China & Japan to study the lifecycle of WtE plants in those countries. Based on the study of WtE experience in these countries, a comprehensive risk matrix was prepared by the Petitioner. The risks and its possible mitigation were identified beforehand. The risk matrix was acted upon as an input to finalise the technical specifications.

3.11. Post finalisation of technical specifications, design basis report (submitted to MERC) was prepared and sent to all prospective EPC vendors. After the assessment of offers provided by the vendors the Petitioner selected a consortium led by Greenesol Power Systems Private Limited with Everbright International as its Grate technology partner, as the EPC vendor.

3.12. Greenesol Power has been selected through a competitive procurement process to provide EPC services with Reciprocating Grate from Everbright International group. The technology is based on highly engineered and reliable reciprocating step grate system.

3.13. The Pune plant will process waste received from PMC which will be converted into electricity. However, it is to be noted that the primary objective of this plant is to process mixed MSW generated in the city limits and to reduce it in volume substantially through a scientific, and sustainable method.


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4. SCOPE OF WORK OF CONCESSIONAIRE

This section describes the broad scope of work of the Concessionaire as defined by PMC to process waste generated in Pune city.

4.1. As per theConcession Agreement the broad scope of the project shall include: -

i. Concessionaire would be responsible for financing, designing, drawing, fabrication, supplying, providing, erecting, constructing, testing & commissioning of the Plant at the Project site on BOOT basis.

ii. The Concessionaire is expected to own, operate and maintain the Plant for the Concession period from the Commencement Date.

iii. The MSW would be supplied by PMC to the plant and the Concessionaire is expected to weigh the MSW received at the Project site and shall maintain daily records of the same.

iv. The concessionaire is expected to pre-preprocess the MSW including segregation, drying and any other treatment required on MSW, prior to the commencement of treatment of MSW.

v. Prior to establishment of the Plant, the Concessionaire needs to carry out a detailed study and analysis on the MSW generated/created within the PMC Limits and shall ensure that the Plant will be operated as per the features and characteristics of the MSW so generated/created within the PMC Limits.

vi. Concessionaire is expected to ensure that in case of any foul smell emanating from the received MSW, it shall take steps to treat the same to control or stop the foul smell.


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5. OVERVIEW OF SOLID WASTE MANAEMENT IN INDIA

This section describes the importance of scientific waste disposal in the country to ensure environmental protection. Also, the section highlights the importance of private sector participation in the sector.

5.1. Human activities create waste, and the ways that waste is handled, stored, collected, and disposed of can pose risks to the environment and to public health. Solid waste management (SWM) includes all activities that seek to minimize health, environmental, and aesthetic impacts of solid waste.

5.2. Solid waste can be defined as non-liquid material that no longer has any value to the person who is responsible for it. The words rubbish, garbage, trash, or refuse are often used as synonyms when talking about solid waste.

5.3. The term Municipal Solid Waste (MSW) refers to solid waste from houses, streets and public places, shops, offices, and hospitals. Management of these types of waste is most often the responsibility of municipal or other governmental authorities and excludes the street sweep, construction and demolition (C&D) debris. The Municipal Corporation handled this separately under C&D handling.

Importance of Solid Waste Management:

5.4. Solid Waste Management is a part of public health and sanitation normally dealt with by local bodies like Municipal Corporations. It is essential obligatory functions of the Urban Local Bodies in India. This service is falling too short of the desired level of efficiency and satisfaction resulting in problems of health, sanitation and environmental degradation.

5.5. In urban areas, especially in the rapidly urbanizing cities of the developing world, problems and issues of municipal solid waste management (MSWM) are of immediate importance. Most governments have acknowledged the importance of MSWM; however, rapid population growth overwhelms the capacity of most municipal authorities to provide even the most basic services.

5.6. The Swachh Bharat Mission, Municipal Solid waste management manual issued by Ministry of Urban Department in 2016 estimates that the total solid waste generated by 377.1 million people living in urban India is 1,43,449 metric tonnes per day of municipal solid waste. The collection and disposal of municipal solid waste is one of the pressing problems of city life, which has assumed great importance in the recent past. With the growing urbanization as a result of planned economic growth and industrialization, problems are becoming acute and call for immediate and concerted action. The proper disposal of urban waste is not only absolutely necessary for the preservation and improvement of public health but it has an immense potential for resource recovery.

5.7. The Planning Commission had published an update on the Solid waste Management with the other Policy guidelines. The waste-to-energy projects are implemented through National Program on Energy Recovery from Urban and Industrial wastes and UNDP/GEF project on Development of High Rate Bio-methanation Processes.

5.8. In order to solve this problem different waste management rules are implemented link Hazardous Waste Management, Bio-Medical Waste Management, E-Waste management and Solid Waste Management rules (SWM Rules 2016), etc.


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5.9. The MSW generated in Indian cities is, by and large, not treated but is directly taken to the open dumpsites. To address the issue of MSWM in India, in exercise of the powers conferred by section 3, 6 and 25 of the Environment (Protection) Act, 1986 (29 of 1986), the Central government, MoEF, made rules to regulate the management and handling of the municipal solid wastes, namely, SWM Rules 2016 to regulate the management and handling of MSW and provide a framework for treatment and disposal of MSW. The SWM Rules 2016 lay down the steps to be taken by all the municipalities to ensure management of solid waste according to best practices.

5.10. The implementation of MSWM practices benefits both public health and environmental quality directly and substantially. Municipalities have overall responsibility for solid waste management (SWM) in their cities.

Potential of waste management in India

5.11. The total Indian urban population amounts to approximately 377 million. There are 7935 cities and towns in India. Of those cities, according to the 2011 census, 468 are considered class I, meaning that the population exceeds 100,000. The class I cities alone contribute to more than 72 percent of the total municipal solid waste (MSW) generated in urban areas1.

5.12. As per National Environmental Engineering Research Institute (NEERI), the country produces about 38 million tons of urban solid waste annually. The per capita MSW generation in Indian cities and towns varies between the range of 0.2 to 0.6 kilograms per day depending upon the size and population of the city.

5.13. According to the Central Pollution Control Board (CPCB), average collection coverage ranges from 50 to 90 percent. Furthermore, of all collected waste, 94 percent is disposed of in an unacceptable manner on open waste land or low-lying areas even near creeks, forests, rivers, ponds and other ecological sensitive regions without any consideration of state-of-the art engineering principles. This practice is commonly known as ‘Open dumping’ and does not meet the norms of disposal specified in the MSW Rules. Hence, there is severe degradation of quality of groundwater and surface water through leachate, as well as degradation of quality of air through uncontrolled burning of waste either man made or self-ignition due to high ambient temperature. Provisions of leachate and gas control do not exist, and thus these landfills become a potential source of public health hazards.

5.14. According to Ministry of Statistics and Program Implementation (MOSPI) estimates, there exists a potential of energy recovery about 2556 MW of power from MSW.

5.15. Of this, only about 53 MW have been installed and 312 MW has been planned so far, according to MNRE. Thus, less than 15% of the total potential has been exploited so far.

1Source: Improving Solid Waste Management in India: A sourcebook for policy makers published by World Bank


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Need for private sector in waste management

5.16. The country is in urgent need to provide boost to MSW based Power Generation Projects as they not only generate green power but also avoid externalities associated with conventional MSW handling practices. With the growing urbanization as a result of planned economic growth and industrialization, problems pertaining to collection and disposal of municipal solid waste are becoming acute and call for immediate and concerted action. The proper disposal of urban waste is not only absolutely necessary for the preservation and improvement of public health but it also has an immense potential for resource recovery.

5.17. The Solid Waste Management (SWM) Rules 2016 lay down the steps to be taken by all municipal authorities to ensure management of solid waste according to best practices. Under Rule 15, "Duties and responsibilities of local authorities and village Panchayats of census towns and urban agglomerations", the following is stated:

"facilitate construction, operation and maintenance of solid waste processing facilities and associated infrastructure on their own or with private sector participation or through any agency for optimum utilisation of various components of solid waste adopting suitable technology including the following technologies and adhering to the guidelines issued by the Ministry of Urban Development from time to time and standards prescribed by the Central Pollution Control Board. Preference shall be given to decentralise processing to minimize transportation cost and environmental impacts such as:

waste to energy processes including refused derived fuel for combustible fraction of waste or supply as feedstock to solid waste-based power plants or cement kilns”

5.18. The private sector has access to a wide range of technological alternatives that can be used for the processing of waste. It can bring in funds for highly capital-intensive segment of MSW processing. Private sector provides higher efficiency of waste management service at overall lower cost as compared to the local administration. Hence, the private sector should come up to develop such project for the proper management of waste in the country.


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6. WASTE TO ENERGY TECHNOLOGIES PREVELANT IN INDIA

The scientific disposal of waste is essential for maintaining the pollution free environment. There are various methods of waste disposal in India explained in the below paragraphs: -

6.1. Bio Chemical conversion: This process is based on enzymatic decomposition of organic matter by microbial action to produce methane gas. The bio-chemical conversion processes, are preferred for wastes having high percentage of organic biodegradable matter and high level of moisture / water content, which aids microbial activity. The main technological options under this category are Anaerobic Digestion, also referred to as Bio-Methanation. Anaerobic digestion is the process of treating the bio-degradable waste with micro-organisms in an anaerobic condition, where the waste is converted to gaseous mixture of Methane, carbon-di-oxide and traces of Hydrogen sulphide. The gaseous mixture is a low calorific value gas (GCV - 4500kcal/Nm3) popularly known as Biogas. Energy can be produced from the combustion of Biogas either in boiler or Internal combustion Engines. The anaerobic digestion is limited to bio-degradable wastes and requires extensive discipline in the source segregation. The performance of few plants available in India with the Bio-Methanization technology is yet to be proved on a commercial scale. The following are the few Installations.

- One number of 5.0MW WTE plant, based on Bio-Methanation of MSW was commissioned in Lucknow in 2003, as is not in operation due to technical reasons.

- M/s. Organic recycling solutions – Solapur, has installed one 400TPD Bio-Methanization plant, which is presently not in operation due to technical reasons.

6.2. Thermo-chemical conversion: This process envisages thermal de-composition of MSW to produce heat energy. The Thermo-chemical conversion processes are useful for wastes containing high percentage of organic non-biodegradable matter and low moisture content. The main technological options under this category include Pyrolysis /Gasification and Incineration.

6.2.1. Pyrolysis: Pyrolysis is the thermal degradation of a substance in the absence of oxygen. This process requires an external heat source to maintain the pyrolysis process. Typically, temperatures around 300 °C to 850°C are used during pyrolysis of MSW. The products from the pyrolyzing process are a Solid Residue and Syngas. The solid residue (sometimes described as a char) is a combination of non-combustible materials and carbon. The syngas is a mixture of gases (combustible constituents include carbon monoxide, hydrogen and methane) and condensable oils, waxes and tars. The syngas typically has a net calorific value (NCV) of between 2500 and 5000kcal/Nm3.

6.2.2. Gasification: Gasification is due to partial oxidation of the combustibles as the sub stoichiometric air is supplied which prevents the complete combustion. The temperatures employed are typically above 650°C. The main product is Syngas with a calorific value of 960° C to 2400kcal/Nm3. Pyrolysis and gasification processes require external energy to sustain the process. The pyrolysis and gasification also require extensive segregation process. The performance of the following WTE plant available in India with the gasification / Pyrolysis technology is yet to be proved on a commercial scale. M/s. Rochem Separation Systems (India) Pvt. Ltd., Pune 4 x 2.6MW


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WTE Plant based on Pyrolysis technology, which is presently not in operation due to technical reasons

6.2.3. Incineration: Incineration technology is the controlled combustion of waste, with the recovery of heat, to produce steam, that in turn produces power through steam turbines. Incineration process needs sufficient quantity of air for complete combustion of the incoming MSW to generate heat energy. Incineration of MSW allows huge savings at the landfill as the volume of MSW is reduced almost to 10 to 15% in the form of ashes and slag as compared to the original waste volume. In WTE plants based on incineration, the entire energy contents of waste are recovered, except the unavoidable fraction that is lost through the flue gas, cooling devices, boiler walls and ashes. The direct combustion of MSW releases more available energy compared to pyrolysis / gasification.

6.3. Waste to Energy through incineration has wide world wide experience. European Union (EU) has more than 400 units, Japan has more than 100 units, USA has more than 80units and china has more than 60 units in operation. It is evident that the energy recovery from MSW through incineration is a proven technology. Also, in India, many WtE plant with MSW incineration technology are in continuous operation. Some of the examples are as below: -

- M/s. Timarpur Okhla Waste Management Private Ltd, 3 x 450TPD WTE plant at Okhla, is in operation. The power generation capacity of the plant is 21.0MW.

- M/s East Delhi Waste Processing Company (P) Ltd, 1 x 550TPD WTE plant at Ghazipur, is in operation. The power generation capacity of the plant is 12.0MW

- M/s. Essel Infra, 1 x 600TPD WTE plant at Jabalpur, is in operation. The power generation capacity of the plant is 11.5MW.

- M/s. Delhi MSW Solutions (P) Ltd, 2 x 600 TPD plant at Narela – Bawana. The power generation capacity of the plant is 24.0MW

6.4. Incineration based WtE technology entails numerous benefits described as below: -

Environmental Benefits:

o Controlled processing & disposal of' Municipal Solid Waste o Methane avoidance from landfill and open dumping of waste o Reduction in load in open landfill — reduction in leachate and ground water

pollution o Promoting resource utilization o Energy recovery and renewable power generation o Supporting action on climate change

Social Benefits:

o Eliminating manual handling and segregation of waste o Reducing human exposure to MSW — improving health & hygiene, reducing

spread of diseases. o Developing best practices in waste processing & disposal in Solid Waste

Management


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o Supporting Pune Municipal Corporation for meeting its obligations for providing civic amenities

Other Benefits:

o Provisioning of green power and fulfilling RPO Obligation as stipulated by Hon’ble MERC


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7. UNIQUE FEATURES OF PUNE MSW PLANT AND BENEFITS

As explained in the earlier sections of this petition, Pune city had witnessed series of failures in scientific disposal of the waste. Therefore, the Petitioner has taken immense efforts to make this plant a success. The Petitioner did immense background work in understanding the critical success factors for MSW plant. The Petitioner has invested in making the plant unique in nature as compared to earlier projects, so that it is acceptable to the general public and also invoke a realization of a positive change taking place for the benefit of their environment. The general public in the near past carried out marches and protest for closing down earlier projects related to MSW management in the city. The primary reasons for the same were – unprocessed waste accumulation, lack of odor control, ground water pollution and lack of emission control causing problems to the nearby residential areas. The key features in the plant to address public concerns and safeguarding the environment are listed below: -

7.1. Preprocessing system: This plant is designed keeping view that Indian MSW characteristics containing non-combustibles will have limited inverse effects on the combustion process. It was found that throughput capacities of M/S Komptech (Equipment supplier) are very effective and cannot be compared with conventional technologies, which are technologically complex plants that had poor reliability and high maintenance costs. Such factors led to failures of many plants. After an analysis of various technological options for MSW pre-processing plant, the Petitioner has found that Komptech System is suitable to achieve the high quality of environmental target and higher operational standards, though more expensive but less frequency of repairing is needed. The Preprocessing system selected has the required redundancy in place for processing the input waste ensuring 3 shift operation. This would further ensure that unnecessary pile-up at MSW pit does not take place. The leachate from the MSW pit will be collected in a leachate pool which will be designed for two (2) days storage. The leachate will be pumped out for further treatment by PMC.

7.2. Leachate Treatment: - The Petitioner has taken measures to ensure that the ground water is not polluted as was the case with the previous plants in the city. The leachate from the MSW pit will be collected in a leachate pool which will be designed for two (2) days storage. The leachate will be pumped out for further treatment by PMC. The petitioner is taking steps to assist PMC design the treatment plant in a way that the treated leachate can be reused as raw water feed by the waste processing plant thus making it a Zero liquid discharge project. This would in turn reduce the overall annual raw water requirement of for the plant and avoid any leachate seepage to ground water.

7.3. Odour Control system: The Petitioner has pioneered to address this concern of general public by installing advanced system of odour control for this project. The Odor Control System (OCS) is envisaged for two areas i.e. MSW Pit Area and Leachate collection pit area. The odour control system will be spread in an area of 26,784 cubic meters over the pit area. The Odour control system will have online & off line odour control equipment. During offline period of the plant, the odour from the leachate pit will be conveyed and put back in to waste pit by odour extraction fans for maintenance activities in the leachate pit. Fresh air supply by blowers to the leachate pit for dilution and air supply for maintenance activities in the leachate pit. The odour from the pre-processing area will be conveyed and put back in to waste pit by odour extraction fans.

During online operation of the plant, to eliminate the odour from the waste pit, FD fan takes suction from the pit and the waste pit is maintained under negative pressure to prevent odour. In order to prevent the odour polluting surrounding environment from the MSW pit, during the plant under shut down, the odour from both waste pit and leachate


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pit shall be conveyed by blowers and shall fed into activated carbon filter where the gas shall be absorbed by the neutralization process and neutralized gas will be left to atmosphere through chimney. To ensure higher absorption efficiency, the gas measurement will be carried out at activated carbon filter outlet and the activated carbon filter will be changed. The waste activated carbon will be mixed with domestic waste into the incinerator for incineration at high temperature.

7.4. Flue Gas Control: Keeping in view the history of protests in Pune, importance of controlling pollution and its impact on environment, the Petitioner has gone for a state-of-the-art Flue gas control system with the following aspects:

Selective Non-Catalyst Reduction (SNCR) to control NOx

FGD system to control SOx and HCL emissions

Activated Carbon injection to control the dioxins, furans and heavy metals and hydrocarbons

Fabric filters with residue recirculation

Online Environmental monitoring system

The SNCR based control of NOx emissions includes ammonia storage tank (5 days storage), Piping, valves, fittings, instruments, ammonia and water mixing system, nozzles, required control system, gas alarm system, etc. to make the system complete in all aspects.The NOx emission at the chimney with SNCR system shall be less than 400mg/Nm³ (on half hourly average basis). SNCR technology is the best available technology for the NOx reduction in incineration plants.

7.5. Experience center: - The other unique feature of this waste processing plant is the EXPERIENCE CENTER. The Petitioner would develop an experience center for this plant wherein the general public can see the process of converting waste into energy through the naked eye. The experience center would boost up the interest of the general public towards MSW plants. This transparency shall reduce the public discomfort towards such plants as they would witness the entire process of safeguarding the environment.

Figure 4: Experience center

7.6. PEB structure: -The plant has the Pre Engineered Building (PEB) structure which will facilitate unhindered processing of waste even during rainy season as entire plant will be covered with roof shed with suitable support PEB structure. The Pre Engineered Building structures have been proposed for fast construction purpose for attenuating bird and fly menace and minimizing leachate from runoffs. The Pre Engineered Building structures have been proposed to arrest odour and dust, visibility blockage and better performance and efficiency in all seasons.


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7.7. Buffer zone: The Pune waste processing plant shall develop the buffer zone around solid waste processing and disposal facility. The buffer zone shall be developed into a mini forest area. The afforestation would be undertaken according to CPCB guidelines and native plants having high Air Pollution Tolerance Index (APTI) would be planted. The afforestation undertaken would deploy unique Miyawaki Technique which is proven worldwide, irrespective of the soil conditions. More than 3000 forests have been successfully created worldwide using this methodology. This technique enables 30 times more density as compared conventional plantations which would result in 30 times more Carbon dioxide absorption as compared to monoculture plantations. One of the key fundamentals to achieve this density is creation of multi layered forests and plant trees which are native to the given soil.

7.8. Fire protection system: - The Petitioner has invested to monitor all the activities of the plant. The technology has the capability of monitoring 5500 input output points. One such point is the thermal sensor which is installed at the pit area and monitor its temperature. As the temperature in Pune reaches at an extreme level (46 degree) in summers, there are chance of fire in the pit area. Thermal sensor shall monitor the temperature and it also reduces the moisture of MSW so as to increase its calorific value. Similarly, there are multiple points which shall be monitored, calibrated and controlled through a control center.

7.9. It is pertinent to mention that the Petitioner while estimating the capital cost for the purpose of tariff determination has excluded the capital cost pertaining to some of the above-mentioned features such as Offline odor control, FGD system, SNCR & Pre-processing equipment. These features have been incorporated on account of Change in Law & change in location which has come about post the inception of the project, and the incremental cost for the same is being compensated for by PMC as illustrated in para 1.13. The built up of capital cost for tariff determination is clearly illustrated in section 17 of the petition.


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8. PROJECT-SPECIFIC TARIFF DETERMINATION

8.1. The Pune waste processing plant shall entail benefits to the city considering its unique features. It is important to have an adequate regulatory system in place for viability of such projects.

8.2. The primary objective of the Petitioner is to develop a waste processing facility to manage and handle waste generated in the city. As a consequence of this 750 TPD waste processing facility which entails a Waste to Energy Plant of 13.19 MW rated capacity, the Petitioner would be selling power to Maharashtra State Electricity Distribution Company Limited (MSEDCL). Hence, the appropriate Commission in this case is the Hon'ble Maharashtra Electricity Regulatory Commission (MERC) for determination of tariff.

8.3. There is a profound need of establishing waste processing plant in the state. The state of Maharashtra has a potential for at least 287 MW2 of power generation from WtE projects. However, the state is lagging behind considerably when it comes to treating MSW (18% of the quantity collected) as compared to several other states3:-

Table 2:State-wise generation, collection and treatment of MSW State Quantity

Generated (TPD)

Collected (TPD)

Treated (TPD)

Quantity treated as % of collected

Goa 183 182 182 99% Andhra Pradesh

11500 10656 9418 82%

Chandigarh 340 330 250 74% Delhi 8390 7000 4150 49% Meghalaya 268 199 98 37% Maharashtra 26820 14900 4700 18%

8.4. The state of Maharashtra also became one of the early pioneers in the segment of Waste to Energy projects when the Hon’ble Commission issued the Order for MSW based Waste to Energy plants in 2004.

8.5. In spite of being the most urbanised state in India, Maharashtra is yet to witness a single successfully operating Waste to Energy project. Therefore Hon’ble MERC is requested to provide needful regulatory facilitation. It is important to have an adequate regulatory system in place for viability of such projects. The regulatory provisions of MSW based project is described in the following paras.

8.6. As per Section 61 (h), the Commission shall be guided, inter alia, by the aspect of promotion of electricity generation from renewable sources of energy.

“61. The Appropriate Commission shall, subject to the provisions of this Act, specify the terms and conditions for the determination of tariff and in doing so, shall be guided by the following, namely……………………… (h) The promotion of co-generation and generation of electricity from renewable sources of energy;”

2 MNRE Annual report for FY 2016-17 3 Twentieth Report on ‘Power Generation From Municipal Solid Waste' relating to the Ministry of New and Renewable Energy published in 2016


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8.7. Hon’ble MERC has recognized Municipal Solid Waste based Waste-to-Energy Projects as Renewable Energy Sources. As per Regulation 2-1(dd) of the RE Tariff Regulations, 2019.

“(dd) “Renewable Energy Sources” means the renewable sources such as Mini, Micro and Small Hydro, Wind, Solar, Biomass including bagasse, bio-fuel urban or Municipal Solid Waste and such other sources as are recognized or approved by the MNRE”

8.8. Central Electricity Regulatory Commission (CERC) also recognizes these Projects in its regulations as Renewable Energy Sources. As per Regulation 2(y) of the CERC RE Tariff Regulations, 2020.

“Renewable energy sources” means renewable sources such as small hydro, wind, solar including its integration with combined cycle, biomass, bio fuel cogeneration, urban or municipal waste and other such sources as approved by the MNRE;”

8.9. As per Section 62(1) of the EA, 2003, the Appropriate Commission is empowered to determine the Tariff for supply of electricity by a Generating Company to a Distribution Licensee, and for transmission and wheeling of electricity.

“62. The Appropriate Commission shall determine the tariff in accordance with the provisions of this Act for – (a) supply of electricity by a generating company to a distribution licensee:”

8.10. Clause 6.4 (1) (ii) of Tariff Policy, 2016 mandates the Distribution Licensee to purchase 100% of the power produced from all Waste to Energy plants in the state.

“Distribution Licensee(s) shall compulsorily procure 100% power produced from all the 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 the Appropriate Commission under Section 62 of the Act.”

8.11. Section 86(1)(e) of the Electricity Act, 2003 stipulates that –

"The State Commission shall discharge following functions, namely (1)(e) promote cogeneration and generation of electricity from renewable sources of energy by providing suitable measures for connectivity with grid and sale of electricity to any person, and also specify, for purchase of electricity from such sources, a percentage of total consumption of electricity in the area of distribution licensee.”

8.12. The Electricity Act, 2003 as well as the National Tariff Policy, 2016, vest in the Hon’ble Commission, the responsibility to balance the interest of the consumers with the interest of the project developers while regulating the tariff of the generating companies. As per Section 61 of Electricity Act 2003,

“The Appropriate Commission shall, subject to the provisions of this Act, specify the terms and conditions for the determination of tariff, and in doing so, shall be guided by the following, namely:- …. (d) safeguarding of consumers' interest and at the same time, recovery of the cost of electricity in a reasonable manner”

8.13. Regulation 3.1 of the MERC RE Tariff Regulations, 2019 states that:


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“3.1 These Regulations shall apply to those new RE Projects which are commissioned in the State of Maharashtra for the generation and sale of electricity to Distribution Licensees in the State, are Eligible Projects for the purposes of these Regulations, and whose tariff is to be determined by the Commission under the provisions of Section 62 read with Section 86 of EA, 2003:”

8.14. As per Regulation 9.1 of RE tariff regulations, a Project-specific Tariff shall be determined on case to case basis in case of MSW-based Power Projects.

“9.1 A Project-specific tariff shall be determined by the Commission on a case-to case basis for the following types of Projects: (a) Waste to Energy Projects based on the technologies approved by MNRE such as Municipal Solid Waste-based Projects;”

8.15. Regulation 9.2 provides of RE tariff regulations states that the financial norms set out in the Regulations, except for capital cost and O&M expenses, shall be the ceiling norms while determining the Project-specific Tariff:

“9.2 The determination of project-specific tariff for generation of electricity from such RE sources shall be in accordance with the ceiling norms specified in these Regulations for the respective technologies and the terms and conditions as may be stipulated in the relevant Orders of the Commission: Provided that the financial norms specified in Chapter 2, shall be the ceiling norms while determining such project-specific tariff.”

8.16. The Petitioner is considering selling the entire power produced from the Waste processing plant to MSEDCL in accordance with policy and regulatory guidance.

8.17. The Petitioner, humbly requests the Hon’ble Commission to recognise the Petitioner’s submission in this Petition. It is submitted that WtE projects in India are still at the nascent stage of their commercial self-sustainability. The technologies for WtE projects are evolving and not many developers/ projects have been developed/ commissioned so far. Further, the scope of work assigned to WtE project developer varies greatly from one project to another. In this context, it is essential that the view on the tariff is taken on the case to case basis to safeguard its commercial viability. Accordingly, the petitioner requests Hon’ble commission to determine the project specific tariff for WtE project.

8.18. The Petitioner is filing this Petition to the Hon’ble Commission for determination of tariff for sale of power generated by processing up to 750 MT per day of Municipal Solid Waste for sale of power to MSEDCL and approval of power purchase with specific provisions as requested in this petition.


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9. PROMOTERS OF THE PROJECT

9.1. Aspirify Environment is a Pune based company. It facilitates sustainable solutions in waste to energy projects, water management systems, resource re-generation options and solar power advisory.

9.2. Pune Bio Energy Systems Pvt Ltd (PBESPL) is a Special Purpose Vehicle (SPV) promoted by Aspirify Environment Pvt Ltd (AEPL). AEPL is a company founded by Mr. Shrichand Aswani and Mr. Sujay Kalele for execution of municipal solid waste (MSW) management projects in the country. PBESPL is setting up a unit in Pune which will process 750 tons per day (TPD) of MSW to convert it in energy. The project will be carried out on Build-Own-Operate-Transfer (BOOT) basis, in agreement with Pune Municipal Corporation (PMC).

9.3. Aspirify Environment (AE), with offices in India and Singapore started operations in the year 2016. With 750 TPD Waste processing project in Pune & 800 TPD plant in Thane, AE will be one of the largest waste processing company in Maharashtra. It will generate > 25 MW of power.

9.4. In light of Government of India’s recent programs of Swachh Bharat Abhiyaan, Clean Ganga Mission, Smart Cities and National Air Quality Index, environmental services are becoming one of the cornerstones of our country’s development and Aspirify Environment is looking at playing a substantial role in creating a strong foundation to this green and sustainable future.


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10. SELECTION OF TECHNOLOGY FOR WASTE PROCESSING PLANT

10.1. The petitioner undertook the following activities to select the appropriate technology to sustainably process & dispose the waste, overcome the technical, environmental, and social challenges of MSW.

Present Status

10.2. As a first step, towards developing the Project, the Petitioner assessed the present status of the Waste and the processing and disposal of the same by PMC.

10.3. The present-day scenario in the surrounding township of the project site for handling and disposing the MSW is in a pathetic situation. Most of the collected MSW is disposed on private or municipal barren lands located in the outskirt of city. This is due to the population and economic growth and unawareness of the public on the waste management such as waste resource reduction, reuse, recycling and energy recovery. Thus, the MSW is burnt on huge heaps to reduce volume in the barren lands or in the dump sites.

10.4. The waste characterization study was done based on actual household survey done by Kulkarni Laboratory & quality management services, Pune which is approved by MOEF & CC is as below:-

Table 3: Characteristics of MSW for the proposed treatment facility Constituents Unit Value

Carbon % 57.55 Nitrogen % 0.84 Hydrogen % 7.22 Sulphur % 0.35 Oxygen % 18

10.5. The MSW test report annexed as Annexure – B.

Selection of Technology for Pune MSW Project

10.6. There are various technologies adopted for MSW combustion. Few of them are listed below.

Movable Grate Reciprocating / Pusher Grate type Travelling grate type

Rotary Kiln Non-cooled rotary kiln type Water cooled rotary kiln type

Fluidized bed type Bubbling fluidized bed type Circulating fluidized bed type

10.7. Of these three basic technologies, fluidized bed has been very rarely used for MSW combustion. This is due to the fact that fluidized bed technology requires the waste to be pre-treated in a homogenization process, which is both costly and technically difficult.


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10.8. Rotary kilns have been applied for low value waste to achieve full burn-out of hazardous waste / clinical waste to safely contain the process and all residues. The following table gives the suitability of various technologies: -

Table 4: Technologies in WtE Plants Technology Untreated MSW Pre-treated

MSW Hazardous waste

Reciprocating Grate Widely Applied Widely Applied Not applied Travelling Grate Not applied Applied Rarely applied Non-cooled rotary kiln Not applied Applied Widely applied Water cooled rotary kiln

Not applied Applied Applied

Bubbling fluidized bed Not applied Rarely Applied Not applied Circulating fluidized bed

Rarely applied Rarely Applied Not applied

10.9. Reciprocating step grate is widely used in various countries and is a proven technology for burning pre-sorted MSW. Hence the same grate will be considered for this project.

Figure 5: Reciprocating Step Grate assembly

Source: - DPR of the project

10.10. The proposed MSW processing plant will be designed to burn the pre-processed MSW in the boiler. Bulky objects, higher size non combustibles present in the MSW are removed during the pre-processing process. The typical arrangement of a reciprocating step grate boiler for MSW based power plant is shown in the figure below: -

Figure 6: Typical arrangement of a MSW fired boiler & Auxiliaries


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10.11. The Petitioner on acquiring the project to process waste in the city undertook detailed technology assessment through vendor discussion and visiting various WtE plants in India and abroad. The Petitioner was aware of the fact that more than 52 waste processing plants in Pune had failed in the past due to technology failure, citizen protest, improper execution etc. Hence the Petitioner understood minute details of the technology used in the plant for scientific disposal of waste.

10.12. The Petitioner went to China, Japan, Korea for technology assessment of the plants operating in these countries considering the characteristics of waste similar to that of India. The visit took place at HO & Boiler factories in Sichuan, waste to energy plant at Seoul, Mitsubishi. The Petitioner also participated in Korea green hub for learning International best practices of waste to energy plants. The following promoters went to China, Japan and Korea from Aspirify Environment.

a. Shrichand Aswani-Director b. Sujay Kalele- Director c. Vijay Aswani-Director d. Deepak Kriplani- Business development head e. Ashish Bangar-Head of operations

10.13. The photographs of the visit are annexed as Annexure-C.

10.14. The Petitioner also assessed the reasons that have contributed to the failure of such plants in Pune city. The Petitioner also has a focus to build the technology in a way that it also addresses general public issues and the plant enjoys social acceptability.

10.15. The Petitioner after conducting visits to various waste to energy plants has defined technical specification required for the project in Pune city. Based on such technical specifications, it had prepared a Design Basis Report which was sent to prospective EPC vendors. Accordingly, the participants submitted the quotations. The Petitioner had ensured technical merit and price competitiveness while selecting the vendor.


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10.16. Based on the detailed study, the Petitioner prepared a risk matrix which was circulated to the prospective vendors for their quotations and technology specifications.

10.17. The Petitioner received the offers from the following suppliers:-

M/s. China Western Power Co. Ltd (CWPC) M/s. Greenesol Power Systems Private Limited (GPSPL) M/s. Hitachi Zosen India Private Limited (HZIPL) M/s. Thermax Limited (TL)

10.18. The offers of all the suppliers were evaluated and it was concluded that China Western power Co. Limited and Thermax Limited does not meet the criteria of the Pune waste processing plant. Hitachi Zosen considered the reduced fuel throughput capacity as 600 TPD though the requirement was for 750 TPD.

A snapshot of the offer received is as below:

Table 5: EPC offer Snapshot

Particulars UOM

Greenesol Power Systems Pvt Ltd. Thermax Ltd

China Western Power Industrial Co. Ltd

Hitachi Zosen India Pvt Ltd.

Capacity TPD, MW

1 X 750 TPD , 13.19 MW

1 X 750 TPD, 13 MW

1 x 750 TPD, 10 MW

1 X 600 TPD , 11.5 MW

FOR Site price including design and supply of the Waste Processing plant

Rs Lacs 13,694 19,920 14,152 12,073

Erection and Commissioning at Site

Rs Lacs

1,360 included 5,670 included

Civil works

Rs Lacs excluded excluded excluded excluded

Two years operational spares, commissioning spares, special tools and tackles

Rs Lacs 646 excluded excluded excluded

Total Rs Lacs

15,700 19,920 19,822 12,073

10.19. Hence the Petitioner has selected Greensol as the EPC who would be providing internationally proven Everbright’s incineration technology power for the plant. Incineration Technology for waste-to-energy of MSW is the well-recognized waste processing & disposal technology adopted globally.

10.20. GPSPL is offering EPC Solution for WtE Power Plants in India with Grates from Everbright International group of China. They have more than 108 WtE Power Plants in operation in China

10.21. It would therefore be appropriate to source the key technology from a globally experienced technology supplier to bring in not only the technology but also to benefit from the experiences, learnings, challenges in working with different types of MSW.


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Power generation from 750 TPD of MSW

10.22. The 750 TPD of raw MSW shall be delivered to the MSW pit by the incoming vehicles after getting weighed. One side of the pit is identified for dumping the raw MSW and the other side is for storage of pre-processed MSW / RDF. The 750 TPD of MSW shall reduce to 654 TPD on removal of moisture and inerts due to pre-processing. The pre-processed MSW to be fed into the boiler will be 654 TPD. The gross power generation, with net calorific value of incoming Pre-processed MSW (654 TPD) as 1733 kcal/kg and conversion efficiency of 24% is as follows (ref Project DPR):

Quantity of pre-processed MSW = 654.72 TPD Estimated Net Calorific Value = 1733 kCal/kg Estimated Conversion Efficiency = 24% Energy Recovery Potential from 654.72 TPD is estimated as per the following universally accepted general formula: Total MSW quantity (W tons) = 654.72 TPD Net Calorific Value (NCV kCal/kg) = 1733 kCal/kg Power generation potential (kW) = 1.162 x NCV x W/ 24 = 1.162 x 1733 x654.72/24 = 54958 kW Conversion Efficiency = 24% Gross Generation potential (Minimum) = 13190 kW = 13.19 MW

10.23. Taking, net calorific value at 1733 kCal /kg, the possible power generation by using 654.72 TPD of Pre-processed MSW shall be 13.19 MW.

10.24. It is pertinent to note that the operating capacity of the turbine is 13.19 MW. This turbine is designed considering capacity at VWO condition or short time overload condition of 14.46 MW


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11. BRIEF PROFILE OF THE TECHNOLOGY PROVIDER

11.1. “Greenesol Power Systems Pvt Ltd” (GPSPL), is a company having Joint Venture with HANGZHOU STEAM TURBINE COMPANY (Hangzhou, China) and having registered office in Hyderabad, Telangana, India is selected as a technology provider for this project. GPSPL is into the business of setting up coal fired thermal power plants. A decade after its inception it has grown into an EPC company and a one-stop shop for setting up Power Plant of sizes up to 350 MW. The technology provider is into sugar sector, Paper Mills, Refineries, Cement Plants, Fertilizer Plants, Steel Plants, Edible Oil Extraction Plants, Petrochemicals, Municipal waste-based Power WtE Plants, Sponge Iron & Steel, Textile, Rubber, Independent Power Plants and other allied sectors.

11.2. GPSPL is offering EPC Solution for WtE Power Plants in India with Grates from

Everbright International group of China. They have more than 108 WtE Power Plants in operation in China.

Figure 7: Typical Plant Equipment Layout by GPSPL


11.3. The overall scheme of the WtE Power Plant supplies for a Typical Waste to Energy

Plant being given by Greenesol Power along with their Chinese Consortium members is explained in Figure above. Civil works is carried out by the Purchaser, using a professional agency, under design inputs from Greenesol Power and under guidance from the Project Consultants M/s Avant-Garde Engineers and Consultants P. Ltd., Chennai.

11.4. GPSPL is currently executing the 2 x 600 TPD / 19.8 MW WtE Power Plant of Hyderabad Integrated Municipal Solid Waste Limited at Jawahar nagar, Hyderabad. Also, it had given the Turbine Package for Delhi MSW 24 MW Power Plant.

11.5. Greenesol is offering EPC Solution for WtE Plants in India with Grates from Everbright


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International group of China. They have more than 108 WtE Plants in operation and/or under construction stage in China.

Figure 8: Role - Greenesol’s as EPC


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12. WASTE TO ENERGY PROCESS AND SELECTED TECHNOLOGY DESCRIPTION

This section of the Petition gives a brief explanation of the technology to be used in Pune MSW plant. The detailed description of the technology can be referred in the DPR annexed as Annexure-D of this petition.

12.1. The petitioner has proposed to develop waste processing project based on mass-burn combustion process & technology from one of the leading technology provider.

12.2. The dedicated land for power plant will be developed as per the results of contour survey, topographic survey, soil investigation report or backfilling may require from land development. Dressing of surfaces including strutting, shoring & dewatering if required and filling and back filling in layers. The plant layout plan is annexed as Annexure-F.

Waste to energy Process

Figure 9: Process overview- Block diagram


12.3. The MSW from the various collection points will have different chemical and physical characteristics. The boiler has to be operated in a steady state condition which requires the fuel in a homogenous form. Hence the raw MSW requires some amount to pre-processing to improve its quality before feeding in to the boiler as mandated by SWM rules, 2016. The raw MSW from one side the pit shall be taken for pre-processing. The Pre-processing equipment will be located below the tipping floor.

12.4. MSW pre-processing facility consists of MSW unloading, manual / mechanical segregation, Pre-processed MSW preparation and bio-drying section for organic fraction. PMC will deliver fresh waste at the proposed MSWM facility. The wastes are unloaded at a designated area of the tipping floor. MSW storage pit handles the waste. There will be leachate collection drains from the pit and thus leachate present in the garbage will be collected in the collection pit. Next, the prepared Pre-processed MSW will be stored in the Pre-processed MSW storage area. Finally, all rejected materials are sent to landfill sites through vehicles.

12.5. The scheme for the pre-processing is shown in the figure below: -


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Figure 10: Pre-Processing of MSW


12.6. The raw MSW shall be delivered to the MSW pit by the incoming vehicles after getting weighed. One side of the pit is identified for dumping the raw MSW and the other side is for storage of pre-processed MSW / RDF.

12.7. The pit shall be of a capacity such that it can cater to 7 days requirement and drain out the surface moisture present in the MSW. Frequent mixing / shuffling of MSW in the pit by one dedicated Grab Crane are envisaged.

12.8. The pre-processed MSW /will have a calorific value of 1733 kcal/kg and shall be fed to the Boiler through a Grab system.

Ash handling system:

12.9. Mechanical ash handling system with pit and Grab crane is envisaged to evacuate the ash generated from the boiler continuously for bottom ash. The ash handling system will be designed for evacuating the ash quantity at a suitable rate while firing the fuel under various GIDCV/ LCV considerations. The ash handling system will have storage pit for 2 days.

Odour Control System

12.10. The Odour control system will have online & off line odour control equipment’s and the system description is as follows:

12.11. During offline period of the plant, the odour from the leachate pit will be conveyed and put back in to waste pit by odour extraction fans for maintenance activities in the leachate pit. Fresh air supply by blowers to the leachate pit for dilution and air supply for maintenance activities in the leachate pit.

12.12. During offline operation of the plant, the odour from the pre-processing area will be conveyed and put back in to waste pit by odour extraction fans.

12.13. During online operation of the plant, to eliminate the odour from the waste pit, FD fan takes suction from the pit and the waste pit is maintained under negative pressure to prevent odour.


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12.14. In order to prevent the odour polluting surrounding environment from the MSW pit, during the plant under shut down, the odour from both waste pit and leachate pit shall be conveyed by blowers and shall fed into activated carbon filter where the gas shall be absorbed by the neutralization process and neutralized gas will be left to atmosphere through chimney.

12.15. To ensure higher absorption efficiency, the gas measurement will be carried out at activated carbon filter outlet and the activated carbon filter will be changed. The waste activated carbon will be mixed with domestic waste into the incinerator for incineration at high temperature.

Auxiliary Cooling water system:

12.16. The steam from the Turbine exhaust is cooled in ACC. An FRP cooling tower with required auxiliaries will be considered for the auxiliary water requirements. 2 x 100% (1W+1S) Cooling water pumps of required capacity is considered for supplying cooling water to the auxiliaries.

Crane for the Turbo generator Building:

12.17. An Electrically operated overhead travelling (EOT) crane with a span of 15.0 meters, with the main hook lifting capacity of 25 Tonnes will be provided to facilitate maintenance of the Turbo generator and their auxiliaries. The crane travel will cover the entire length of the Turbo generator building.

Ash Conveying Compressor:

12.18. The compressed air required for conveying fly ash from bag filter hoppers will be supplied by the required number of air compressors. Oil injected Screw air compressor (air cooled) will be provided with accessories like pre and post oil filters, moisture separator, inbuilt PLC control panel and other auxiliaries like air receivers.

Air Conditioning and ventilation System:

12.19. Packaged type floor mounted air cooled duct able air conditioning system will be provided for TG control room and PCC, MCC, HT & VFD panel room. All other rooms like crane operator cabin, Office room, conference hall, Reception hall and dry SWAS panel room will be provided with Hi – wall Split A/C.

12.20. Exhaust fan ventilation system will be provided for TG floors, Cable cellar, Battery bank room, Wet SWAS panel room, raw water & fire water pump house, pantry, store and toilet.

12.21. Blower will be provided for leachate pit for odour control. Dry type (Activated Carbon) based odour control will be provided for MSW pit for odour control during boiler shutdown.

Fire Protection System:

12.22. The fire protection system for the proposed power plant shall consist of:

Fire hydrant system for entire power plant including boiler area, STG building area and ACC area

The high velocity water spray system for distribution transformers and lube oil tank

Medium velocity water spray system for cable cellar Remote operated water cum foam monitors (Swivel type) at top of MSW pit.


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Manual operated foam system and Medium Velocity Water Spray System for LDO tank Fire protection system

Gas detection system for MSW pit & Leachate pit Automatic fire detection and alarm system for the electrical panel rooms in the

TG building. Portable fire extinguishers for the entire TG building. Portable fire extinguishers for MSW pit.

12.23. The major design aspects of the system will be as follows:

Control will be of the type which normally relieves the operator of continual regulating duties and will be backed up by interlocks and safety systems that will take pre-planned action in cases where unsafe trends and/or conditions develop faster than the operator's ability to respond.

Continuous self-checking features will be incorporated in system design with automatic transfer to healthy/redundant circuits to enhance the reliability of the complete system.

All the closed loop analog signals, safety and interlock signals and digital signals will be processed by the DCS.

Redundancy will be provided in the Central Processing unit, power supply and Communication modules (both between the controller & the operator station and between the I/O modules and the controller).

Redundancy will also be provided for the communication cables Power supply used for interrogation with field devices will also be redundant. The Input / Output modules will be provided with noise filter and galvanic /

opto isolation from external control source. The input modules will be suitable for processing the field signals. The outputs

will be short circuit proof and protected by fuses. The memory will be non-volatile or battery backed up as required. On-line replacement of modules will be possible without affecting the process. Data communication network response time will be less than 100m Sec. Sequence control / Interlocks scan time should be within 100 msec. Display update time will be less than 1 sec. The system will be designed so that the failure of any monitoring device or

control components or spurious intermediate grounding in the signal path will not open the signal loop nor cause the loss or malfunction of signal to other devices using the same signal.

All equipment/systems located in the field will be suitable for continuous operation without loss of function, departure from the specific function or damage at the ambient temperature and humidity conditions.

The control system software will have all the essential capabilities to perform advanced control algorithms as a minimum. It will be user friendly, easily programmable and have excellent Data acquisition, Graphic display and logging capabilities.

Civil Engineering

12.24. Turbo generator foundation:-The Turbo generator Foundation is a cast-in-situ reinforced concrete Frame foundation which consists of top deck slab, beams, columns and base raft.


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12.25. Pre-fabricated structure: - The plant shall have PEB structure to ensure unhindered waste processing in city.

12.26. Static Equipment Foundations:-All the static equipment foundations shall be constructed with cast-in-situ reinforced concrete. All foundations shall be extended to a depth, which conforms to the allowable bearing pressure of the soil.

12.27. Buildings:- It shall accommodates MSW tipping floor, Pre-processing floor, Refuse pit, Grab Crane, Boiler and Station building, Station building houses Turbo generator, all the auxiliaries of the Turbo generator, EOT crane, maintenance area, switchgears, control room, battery room, ventilation and air conditioning room, offices & toilets etc.

12.28. MSW tipping floor: -MSW tipping floor will be in RCC and designed for the truck loads. Tipping floor will be supported by RCC frame work and isolated pad foundation will be adopted for this structure. Roll up shutter shall be electrically operated.

12.29. Pre-processing floor:-MSW pre-processing shall be located below the tipping hall.

12.30. Refuse pit:-Refuse pit will be designed as storage structure. Refuse pit walls are designed for inside Waste material pressure and outside earth pressure. Base slab will be given proper slopes and drainage system for removal of collected leachate. Walls and base slab shall be coated with Coal tar epoxy painting.

12.31. Boiler structure:-Boiler supporting structure shall be steel support from ground level.

12.32. Station building:-The sub structure of the building will be shallow foundations and superstructure with RCC frame work, with concrete cast in situ floor slabs and concrete cast in situ roof slab for the control room and other rooms other than the machine room. The roof will be pre-coated steel with curvature or “Proflex” make type sheeting directly resting on building walls. External walls will be 200mm thick concrete block and internal walls will be 100mm thick concrete block work as per functional requirement of the building. The building frame shall support the overhead EOT crane moving on gantries.

12.33. Turbo generator Room floors-The floor shall be finished with granolithic concrete with a surface hardener / Kotah stone. Skirting shall be painted plaster / with Kotah stone.

12.34. Switchgear room, AC & Ventilation machine room:-The floor shall be finished with granolithic concrete with a surface hardener. Skirting shall be painted plaster.

12.35. Control Room:-The floor shall be modular elevated floating type floor with a PVC tile finish.

12.36. Non-Plant Buildings:-Non-Plant Buildings like, Fuel shed, Pump house, etc., will be of concrete shallow foundations and superstructure with reinforced concrete / Structural steel frame work, reinforced concrete cast in situ / curved metal sheeting roof. External walls shall be of 200mm thick concrete block masonry and internal walls will be of 100mm concrete block masonry depending upon the functional requirement of the buildings.

12.37. Transformer:-Transformers, breakers etc. shall be supported on reinforced concrete pedestals and foundations.

12.38. Auxiliary Cooling Tower:-The FRP cooling Tower shall consist of Hot Dipped Galvanised (HDG) steel columns and RCC basin for water storage.


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12.39. Pipe Racks:-Pipe rack supporting structure will be of structural steel columns with interconnecting longitudinal & transverse beams, properly braced with vertical & horizontal bracings.

12.40. Roads and Pavement: - All the roads shall be designed to withstand the largest expected loads.

12.41. Ramp: - Ramp shall be provided for the trucks to access the tipping floor.

12.42. Surface Drainage:-All the paved and unpaved areas shall be adequately drained. The surface drainage system shall be designed for surface washings and/or rain/fire water as the case may be.

12.43. Plumbing and Sanitary System:-Plumbing and sanitary system shall serve all toilets, showers, bathrooms, kitchens and laundry room. Wherever possible all discharge pipes shall be fully vented. The design, installation, testing and maintenance of all plumbing systems & sanitary appliances shall comply with latest Indian Standards.

12.44. Sewerage Drainage System:-The sewerage drainage system consists of connecting the sanitary waste disposal from different buildings to the Septic tank through necessary pipeline.

12.45. Site Clearance:-All the materials and equipment employed for construction purpose shall be taken away from the site. All the rubbish and unwanted plant material shall be cleared and dumped away from the site. All areas within and outside the site which have been used during the construction shall be cleared and the ground surface shall be left in a safe and aesthetically good condition.

12.46. Fencing / Compound Wall:-The Compound walls may be required to be installed on the main road side leading to the factory.


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13. LOCATION OF THE WASTE PROCESSING SITE

13.1. The proposed waste processing plant will be located in Ramtekdi, Pune, Maharashtra.

13.2. The nearest airport is Hadapsar Airport located 14.33 km from project site. The nearest railway station is Pune station located 10 km from the project site.

13.3. The site is well accessible through NH -65 highway which connects Pune and Solapur.

13.4. The following figure illustrates the site location of the proposed plant. It has an aerial extent of around 10 acres.

Figure 11: Google image of Land Layout of proposed plot



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14. LAND UTILIZATION PLAN

14.1. Land utilization plan has been prepared and accordingly the proposed land utilization is given in the following table.

Table 6: Minimum area requirement Description Area(m2) Road/ Circulation area 9370 Parking 1000 Open plot for Mechanical Units (Switchyard)

3458 Open plot for Mechanical Units 2260 LDO space 345 Water Tank+ Pump house 475 Laboratory 145 Plant Block 4340 Shed Block 3000 Office Block 795 Staff Housing 705 Landscaped area 4550 Pathway 2575 Green Buffer 4435 Area below ramp 1255 Open plot 3075 Total 41783

14.2. The minimum area to be utilised for the power plant is 41783 m2 (≈10 acres) , which is sufficient for the project to be constructed


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15. PROJECT ATTRIBUTES Table 7: Project Attributes

Particulars Details

Un-segregated raw waste to be supplied by PMC

Up to 750 tons per day (TPD) with a minimum guaranteed quantity of 600 tonnes per day (TPD)

Pre-treated MSW to be treated at plant facility

654 tons per day (TPD) for input feed of 750 TPD

Waste processing Technology Reciprocating grate technology

Period of Agreement 15 years. The period can be further extended by 15 years on mutual consent.

Envisaged Plant Capacity/Output{Commercial (saleable) Output}:

10.73 MW (Net) Electric Power Generation Capacity - Energy generated from this plant could be classified under Renewable Energy

Critical Plant Parameters (related to Power)

Gross Electric Power Generation capacity: 13.19 MW In-house consumption of power (auxiliary consumption):

2.46 MW Net Electric Power Generation Capacity of the Plant: 10.

73 MW Envisaged PLF of plant:

65% for first year 80% for second year

Envisaged generation of electrical units (Net units for sale): 597.53 lakh units in first year and 751.28 lakh units in subsequent years.

COD 24 months from effective date

Useful Life of the plant

15.1. As per Clause 4.2 (a) of the Concession agreement:-

“The Concession hereby is for the period of (15+15) (30) years commencing from the Commencement date and ending on the expiry date (“the Concession period”)during which the Concessionaire is authorized to design, finance, construct, operate and maintain the project in accordance with the provisions thereof.”

Provided that in the event of termination of this Concession agreement, the Concession period shall mean and be limited to the period commencing from the commencement date and ending with the termination date.

PMC may agree to extend/renew the Concession after expiry of the Concession period for such period as mutually agreed to and on such terms and conditions as mutually agreed to an on such terms and conditions as mutually agreed upon. However, the decision to extension or renewal of the Concession will also take into account impact of Rulings/orders issued or given by Government agencies/Regulator like MERC, CPCB, MPCB, NGT etc.

15.2. The term of Concession as defined is 15 years and therefore tariff should also be determined for 15 years in this petition. However, in MSW orders the Hon’ble Commission considers tariff period of 20 years referring to the below regulations:-


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MERC’s RE tariff regulations, 2019:-

“2.1 (nn) Useful Life’, in relation to a Unit of a Generating Station, including the evacuation system, means the following duration from the date of commercial operation (‘COD’) of such generation facility, namely: —

a. Wind Energy Power Projects 25 years

b. Biomass-based Power Project, Non-Fossil Fuel-based Co-Generation 25 years

c. Mini/Micro and Small Hydro Power Projects 35 years

d. Solar PV/Solar Thermal Power Projects 25 years

e. Solar Roof-top PV systems Power Projects 25 years

Provided that the Useful Life of other RE Projects shall be as stipulated by the Commission while determining the Project specific tariff, taking into consideration the norms of the Central Commission;

15.3. The Petitioner would like to highlight that MERC RE tariff regulations 2019 do not specify life for MSW based WtE projects as the tariffs are to be determined on project specific basis. The petitioner further highlights the following precedence in the notified orders of various State commission on incineration based MSW projects below:-

Table 8: Useful life notified by various commissions

Particulars Commission Useful Life Year

Telengana (Generic Order) TSERC 20 years 2020

Nagpur WtE MERC 20 years 2019

Tamil Nadu (Tariff Order) TNERC 20 years 2017

Jabalpur WtE MPERC 20 years 2016

15.4. The petitioner further highlights that the Commission has also issued Tariff Orders for MSW Projects in Solapur, Pune and Kolhapur, where the Commission has considered 20 years of useful life and 20 year of Tariff period.

15.5. Also, Hon’ble MERC had insisted in various MSW orders in the past for 20 years of life though the concession period was shorter.

15.6. Hence in line with the regulatory norms specified by Hon’ble MERC and precedence cited above and MSW tariff Orders issued by Hon’ble MERC’s, useful life of the plant is considered as 20 years for the purpose of this petition.

Supplementary Fuel

15.7. The MSW calorific value varies continuously throughout the year over a wide range. Hence, such plants always monitor the furnace temperature. As per SWM Rules 2016, such plants need to maintain minimum 950 °C in furnace and two seconds residence time for total burnout of waste. This temperature is monitored constantly. When it starts falling below the limit, first MSW firing is increased. However, if MSW calorific value is low, or the volume fed nears to the maximum capacity for the boiler intake, supplementary fuel would be required to make up for the energy shortfall to regain temperature of 950 °C.


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SWM Rules 2016 permit use of fuels for MSW Processing as referred below:

Clause C (e) under Schedule II – Standards for Incineration of SWM 2016 rules:

“Only low sulphur fuel like LDO, LSHS, Diesel, bio-mass, coal, LNG, CNG, RDF and bio-gas shall be used as fuel in the incinerator”

Hon’ble GERC in its order for MSW based Waste to Energy project provides for the cost of fuel. Relevant excerpt is quoted below:

“2.4.1 (g) the Commission decides to retain the RDF (fuel) cost as proposed in the discussion paper, i.e. Rs. 1600 /MT with 3% annual escalation from the second year onwards during the subsequent years of the control period.”

15.8. PBESPL highlights that the proposed project is designed to consume 654 TPD of pre-processed MSW of NCV 1733 kCal/kg to generate 13.19 MW of power. Only during the eventualities described above, supplementary fuel would be used.

15.9. The petitioner has considered 10% Biomass as supplementary fuel for calorific value support during 3 months during a year (monsoon). It is to be noted that the calorific value of 1512 kcal/kg as per the submitted report is as recorded in the month of November (winter) on the basis of which rated output of 13.19 MW is calculated. However, in the tariff model, for the purpose of calculation, the revised annual average NCV for power generation is arrived in the model considering impact of use of 10% Biomass for 3 months annually. PBESPL would maintain MIS data logs to record & monitor the temperature profile in the furnace, as well as data on use of supplementary fuel in the plan

15.10. It is pertinent to note that the petitioner is liable to compensate the Discom to the extent of under-generation from guaranteed CUF, at 75 percent of the tariff , as per RE Regulations 2019. To avoid such situation, it is imperative for the petitioner to have the provision for use of required supplementary fuel.

“10.3 In case the RE Project fails to generate energy up to the guaranteed CUF, then the RE Project proponent shall compensate the concerned Distribution Licensee to the extent of under-generation at 75 percent of the tariff approved by the Commission”

15.11. There’s no limitation prescribed by any authority while using RE fuel as supplementary.. Clause 42.1 & 42.2 of Maharashtra RE regulations 2019 for Biomass projects provide as below:

“42.1 The use of fossil fuels for Existing RE Projects shall be limited to the extent of 15% of the total fuel consumption on an annual basis.

42.2 Use of fossil fuels for generation shall not be allowed for New RE Projects, and the entire power has to be generated using biomass..”

15.12. In an endeavour to limit the carbon footprint of the proposed project, PBESPL voluntarily proposes to limit the use of supplementary fuel up to 10% (on weight basis) for 3 months in a year. Petitioner would make use of the non-conventional/renewable fuel (biomass / RDF) only for this purpose.


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15.13. The Petitioner can undertake the process of conducting calorific value tests for MSW in Pune for the monsoon months (as applicable) i.e. usually July, August & September and shall furnish the same for the commissions record, if required, on annual basis.


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16. PROJECT PARAMETERS Table 9: Project Parameters

Assumption Head

Sub Head Sub Head (2) Unit PBESPL

Power Generation

Capacity

Installed Power Generation Capacity

MW 13.19

Auxiliary Consumption

% 16.57% (I st year)

18.67% (II nd year) PLF (during 1st year after stabilization)

% 65.00%

PLF (2nd yr onwards) % 80.00% CoD 24 months from effective date Useful Life Years 20.00

Project Cost Capital Cost

Capital Cost INR Lakh/MW 2,244.98 Capital Cost INR Lakh 29,611.29 Capital subsidy INR Lakh - Net Capital Cost INR Lakh 29,611.29

Financial Assumptions

Tariff Period Years 20.00

Debt / Equity

Debt % 70% Equity % 30% Total Debt Amount INR Lakh 20,727.90 Total Equity Amount

INR Lakh 8,883.39

Debt Component

Loan Amount INR Lakh 20,727.90 Moratorium Period Years - Repayment Period Years 12.00 Interest Rate % 10.14%

Equity Component

Equity Amount INR Lakh 8,883.39 Return on Equity for first 10 years

% p.a. 16.00%

Return on Equity 10th year onwards

% p.a. 16.00%

Discount rate % 9.83%

Depreciation

Depreciation Rate for first 12 years

% 5.83%

Depreciation Rate for 13th year onwards

% 2.50%

Incentive Generation Based Incentives, if any

INR per unit Not applicable

Period for GBI Years Not applicable

Operation & Maintenance

O&M Expenses During Active Operations Period

INR lakhs for the first year

2,222.1

Additional O&M for periodic maintenance

to be carried out in 5th and 10th and 15th and 20th year

INR Lakh 1,050

Annual Escalation Factor for Opex

During Active Operations Period

% 5.52%

Working Capital

O&M expense Months 1.00 Maintenance Spare

(% of O&M expenses)

% 15%

Receivables Months 6.00 Fuel Stock Months 4.00


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Assumption Head

Sub Head Sub Head (2) Unit PBESPL

Interest on Working Capital

% p.a. 9.64%

Tipping fee Tipping fee Tipping Fee: yr-1 Re/ton 360.00 Annual increment % p.a. 8.00%

Fuel Related Fuel type

MSW as fuel (annual avg)

% 97%

Supplementary fuel (annual avg of biomass used only during monsoon season)

% 3%

Avg NCV of MSW after preprocessing

kcal/kg 1,643.78


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17. CAPITAL COST OF THE PROJECT

17.1 As part of the Concession Agreement with PMC, under Public Private Partnership (PPP) framework, PMC has allotted 10 acres of land to PBESPL on long term lease for the concession period. The site is located at Ramtekdi, Pune.

17.2 Pune Bio Energy Systems Private Limited is planning to set up a 750 TPD Waste processing plant on EPC basis in Ramtekadi, Hadapsar MIDC, Pune, Maharashtra. This plant will have 1 x 750 TPD WTE boilers with steam generation capacity of 68 TPH with one number of turbo generators producing 13.19 MW during normal operation along with air cooled condensing system.

17.3 The plant will have complete facility as required to handle the incoming municipal solid waste and to feed it into the boiler. The Pune waste processing project will be equipped with complete gas cleaning system to meet the pollution control norms, odour control system operating when the plant is offline or online, 5500 input output points etc.

17.4 Raw MSW shall be delivered to the incoming MSW pit by the vehicles after getting weighed. One side of the pit is identified for dumping the incoming raw MSW and the output side of the pit is located after pre-processing is for storage of pre-processed MSW / RDF. It is estimated that 750 TPD of raw MSW will be pre-processed on days when the power plant is fully loaded. The pre-processed MSW to be fed into the boiler will be 654 TPD.

17.5 As illustrated in point 10.17, the capital cost finalised as per the scope defined in the Designed Basis report was Rs 157,00.00 Lakhs. However, since the compensation from PMC also includes compensation for additional Capex on account of Change in law ( i.e from MSW 2000 to MSW rules 2016) towards FGT + EMS system of 15.29 Cr ( ref. para 1.13 ), which was included in the EPC package, the same has been removed from the EPC capital cost for the purpose of Petition. We have also reduced the lump sum cost component towards operational spares for two year trouble free operation, which is also a part of the EPC package , as the same has been expensed out through the O&M cost as per relevant regulations. The calculation for capital cost for petition is illustrated as below:

Table 10: Net EPC Capex for Petition Particulars Cost in Lakhs

Offer from Greenesol (exclusive of taxes) 15,700.00

Less - Compensation on account FGT+ EMS by PMC through ___ 1529.00 Less - Two years operational spares, commissioning spares, special tools and tackles 646.00

Net EPC Capex for Petition 13,525.00

EPC scope does not include scope of Pre-processing (clause 4.5 of DBR) & Odour Control system, orders for which are being placed separately. Section 11 of Design Basis Report clearly indicate the MSW pre-processing system as an exclusion from EPC scope. The cost on account of the Pre-processing & Odour control is also not being considered for the purpose of petition as the same is being provided for through the compensation from PMC (ref para 1.13)


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17.6 Thus, the capital cost estimated by the Petitioner for Pune waste processing plant for the purpose of tariff determination works out to be INR 29,611.29 lakhs which comprises of hard costs as well as soft costs. The break-up of the same is illustrated as below:

Table 11: Break up of capital costs Particulars Cost (in INR Lakhs)

EPC packages excl taxes 13,525.00

Taxes 1,401.37

Misc Fixed Assets 255.80

Transmission line (incl taxes) less PMC comp

1,696.65

Total Plant & Machinery 16,878.82

Building & Civil Cost (Inc. land preparation)

4,300.00

Transmission line Civil cost ( incl taxes)

2,618.38

Total Hard Cost 23,797.20

Contingency Cost 713.92

Consultancy charges 594.93

PMC charges 356.96

Preoperative expenses 237.97

Financing cost 475.94

ROW (transmission soft cost) 1,000.00

IDC 2,434.37

Total soft costs 5,814.09

Total capital cost 29,611.29

17.7 The Petitioner submits that the estimated capital cost for INR 29,611.29 lakhs does not include the components for which the compensation is provided by the Municipal Corporation. The compensation is given by PMC for additional capital cost incurred by the Petitioner due to change in location & Change in Law i.e. SWM rules 2016. Hence such costs have not been considered in the capital cost estimated for the determination of tariff.

17.8 It is to be noted that MNRE issued a letter reference no. F.No.20/222/2016-17-WTE, dated 30/07/2018 (annexure 2 with this submission) for Programme on Energy from Urban, Industrial and Agriculture Wastes/Residues for 2017-18, 2018-19 & 2019-2020. Under clause 2 b Scope of the Program guidelines

The scheme provides for Central Financial Assistance in the form of capital subsidy and Grants-in-Aid in respect of the following activities:

(b) Power generation or production of Bio-CNG/enriched Biogas from biogas produced from Industrial waste, Sewage Treatment Plants, Urban & Agricultural Waste/residue.

The same letter indicates that guidelines for power generation from MSW based projects would be issued separately..

On 28th February 2020, MNRE issued revised guidelines F.No. 20/222/2016-17 dtd 28/02/2020 which provides for CFA of Rs 5 Cr/MW with a maximum cap of Rs 50 Cr for incineration based MSW projects. The CFA is subject to application to MNRE and approval by Project Advisory Committee of MNRE.


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The petitioner submits that, they have not filed any application with MNRE to avail such CFA. The petitioner further clarifies that, in the event this CFA is availed by the petitioner at a future date, the petitioner would offer a discount in Tariff to the Discom to that effect.

The petitioner requests MERC to provide the sensitivity of every Cr of VGF to corresponding paisa/kwh change in tariff once it has finalised all parameters for its approved tariff

Thus, the actual discount passed on tariff would be computed on the basis of finally approved and actually availed CFA amount, if any.

Hard costs

Plant & Machinery:

17.9 The capital costs under Plant & Machinery include those pertaining to processing plant.

17.10 The processing plant includes cost of boiler, turbine, ACC and all the other auxiliary systems of the power plant, like the auxiliary cooling water system, inclusive of auxiliary cooling tower and pumps, compressed air system, AC, firefighting system, instrumentation system, etc. The cost estimate includes the cost of steam piping (all medium pressure, high pressure and low-pressure piping), cooling water piping and all other piping within the battery limits of the power plant.

17.11 It is to be noted that, on account of seasonal variability, the quantum as well as the quality (calorific value) of MSW could vary. Inferior quality of incoming MSW would either require substitution with supplementary fuel, or flexibility to digest full quantity of MSW and also accommodate supplementary fuel to generate the rated power output.

17.12 As per the Concession agreement, PMC is entitled to impose a penalty as below if any part of MSW is left unprocessed

“In the event, the Concessionaire fails to operate and handle 80% of MSW of the capacity of the plant supplied by PMC, PMC shall be entitled to levy a penalty on the Concessionaire up to an amount of 10% of the tipping fee on the unprocessed MSW/MT/day.”

17.13 Thus, keeping such seasonal variabilities in view, the overall project sizing has been done in such a way that, no incoming MSW is left unprocessed as well as the rated plant output in maintained.

17.14 The broad description of equipment relevant for processing plant is as below:-

a. The waste processing plant proposed to be developed in the Pune city shall have boiler of reciprocating grate technology which is a proven technology for burning pre-sorted MSW. As mentioned in the earlier sections of the petition, Pune faces extreme climatic conditions. During wet season, the moisture content in MSW is at a higher level due to which the quantum of input MSW would increase beyond 750 Tons a day in weight to run the plant at rated capacity. Hence it is essential that the capacity of the grate should be such that it can handle waste of larger quantities than 750 TPD. The grate is designed to handle the waste of 850 TPD.


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b. The cost include the estimates towards grab crane which shall be used for picking up and removing the higher size material such as wood logs, building blocks, stones etc. There shall be two (2) independent grab cranes (both working) with a minimum grab volumetric capacity of 10m3 each. The system shall be complete with crane track, control cabinet for crane operation and all the required control systems to make the system complete in all aspects. The grab crane will have online weighing system to record the MSW feeding rate.

c. The Petitioner has invested to monitor all the activities of the plant. The technology has the capability of monitoring 5500 input output points. One such point is the thermal sensor which is installed at the pit area and monitor its temperature. As the temperature in Pune reaches at an extreme level (46 degree) in summers, there are chance of fire in the pit area. Thermal sensor shall monitor the temperature and it also reduces the moisture of MSW so as to increase its calorific value. Similarly, there are multiple points which shall be monitored, calibrated and controlled through a control centre. Due to such additional control points being monitored by a single control centre, the Petitioner would employ lesser manpower and hence lesser employee cost. Therefore, by investing a higher amount in technology the Petitioner is able to save on operation and maintenance expenses.

d. The sophistication plant automation has resulted in significantly lower manpower requirement for the power plant (processing plant)section as compared to other WtE plant of commensurate capacity

Table 12: Comparison of Manpower in WtE plants

Plant Manpower in Processing Plant/ Power Plant

Nagpur WtE ( 11.5 MW) 181

Jabalpur WtE (11.5 MW) 168

Pune WtE ( 13.19 MW) 110

e. The present pollution control norms, depletion of water quantity and quality year by year has mandated the use of Air-cooled condenser.

f. The steam generator is equipped with complete required systems like air and Flue gas system, Fuel and ash system, Feed water and steam system, Dust collection system, Soot blower system, Steam and water analysis system, Boiler draft system, Instrument air system, Electrical system, Instrumentation and control system, etc.

g. The feed water management program shall ensure the supply of good quality make up water to the system.

h. Well-engineered ash handling system is considered for this project. i. To separate dust particles from the flue gas, cyclones or electrostatic precipitators or bag

filters are installed. j. The plant & machinery cost is based on the quotations received for plant EPC k. The above mentioned capital cost towards plant and machinery is inclusive of imported

component of USD 12,129,000, (Twelve million one hundred twenty nine thousand dollars) which is payable in USD and the cost consideration in INR is arrived as per exchange rate of INR 68.16 (as on 8th June 2018).


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l. The capital costs for plant and machinery also includes taxes on imported as well as domestic component. The Petitioner is in the process of securing a certificate from Ministry of New and Renewable Energy (MNRE) whereby a concessional tax rate would be applicable on the imported plant and machinery component. The Petitioner has considered the concessional rate of tax and therefore the cost of plant and machinery includes INR 1,401.37 Lakhs towards tax. Tax calculation is provided as below:

Table 13: Tax Calculation on EPC package

Sr no

Description Value, Rs Lakhs

BCD rate, %

BCD, Rs

Surcharge, %

Surcharge, Rs

Assessible value, Rs

GST/IGST rate, %

GST/IGST value, Rs Lakhs

Total tax, Rs Lakhs

1 EPC

a Imported 8,267.25 5% 413.36 10% 41.34 8,721.95 5% 436.10 890.80

b

Indigenous Supply - HSN 84 or 85

3,352.45 - - - - - 5% 167.62 167.62

c

Indigenous Supply - Other than HSN 84 or 85

545.75 18% 98.24 98.24

2 Services (indigenous)

1,359.55 - - - - - 18% 244.72 244.72

3 Sub total 13,525.0 1,401.37

m. In the event the petitioner is unable to secure the above MNRE certificate or the practice of issue of certificate is discontinued, the revised tax applicable would be Rs 1,878.8 lacs and the Tariff impact on account of this increase in taxes would be an increase of 1.13 % on the given tariff.

n. However, if there is any upward revision in the tax rates for any reason, the Petitioner requests the Hon’ble Commission to compensate such increase in tariff, considering it as “change in law” - a Force Majeure condition. The provision of pass through of taxes is provided in Hon’ble Commission RE tariff regulations, 2019. The relevant clause is quoted as below:-

“26. Taxes and Duties The tariff determined under these Regulations shall be exclusive of taxes and duties on the generation and sale of electricity from a RE Project as may be levied by the appropriate Government: Provided that the taxes and duties levied by the appropriate Government on generation, and sale of electricity from such RE Project, such as Electricity Duty and Water Royalty, shall be allowed as a pass-through to the extent actually incurred.”


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Civil costs:

17.15 The civil costs estimate does not consider any cost for the land, since it is provided on lease basis. However, the area identified for the project may need levelling and development. The necessary costs for the levelling are considered in the civil cost estimate.

17.16 The civil costs include the cost of construction of MSW pit for seven days storage of waste. It is essential so as to:-

To reduce Moisture To Homogenize the incoming fuel To create a buffer & to reduce fluctuations

17.17 The civil cost includes cost of construction of Pre-engineered or Prefabricated infrastructure. Pre-engineered steel buildings have emerged as main technology for industrial constructions. A structure adaptable to the changing environmental conditions can be termed as a Smart Structure. Owing to the government’s initiation of the ‘Smart City’, there is an up surge in demand of PEB. The advantages of using PEB structure in MSW projects are: -

To facilitate unhindered processing of waste even during rainy seasons, the process plant will be entirely covered with roof Shed with suitable support PEB structures.

The Pre-Engineered Building structures have been proposed for fast construction purpose for attenuating bird and fly menace and minimizing leachate from runoffs.

The PEB shed is completely covered with proper ventilation to ensure filtration of out-going air/odour through wet scrubbers and circulation of fresh air.

The Pre-Engineered Building structures have been proposed to arrest odour and dust, visibility blockage and better performance and efficiency in all seasons.

17.18 This costs also include expenditure towards administrative building, experience centre to address the resistance of the general public from Waste processing plants.

17.19 The Leachate from the MSW pit shall be collected in a leachate pool, which shall be designed for minimum two (2) days storage with minimum leachate collection of 165 TPD shall be considered. Two nos (1W+1S) leachate transfer pump shall be provided by the contractor. The leachate will be pumped out for further treatment by the Petitioner.

17.20 The Petitioner has invited quotations from various vendors for estimating the cost towards civil works. The quotations were received from Suyog Construction, Shri Siddheshwar Construction and NM Manthalkar. The Petitioner analysed the quotations and selected the vendor based on competitive bidding. Further, the Petitioner renegotiated with the selected Contractor so as to achieve an optimum cost.

17.21 The estimates given in the civil works costs are based on expected soil bearing capacity of about 25 T/m² at a depth of 1.5m. The total civil cost works out to INR 4,300 Lakhs for this project.

Table 14: Detailed break up of civil costs Description Value

Land & Site Development


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Description Value

Cost of levelling and site development, internal roads etc.

1 Lot

Power plant building & other equipment foundations

Technical Building (Turbine Area + Boiler Area + Cover shed over Pit, Crane Girder, Cover over Tipping floor, etc.), Turbo generator foundation, Boiler foundation, Chimney

Building and Civil Works

MSW storage pit, Ramp, Reservoir, PEB

Total estimate for Civil works (Rs Lakhs) 4,300.00

Transmission cost:

17.22 As per RE tariff regulation 2019, there is a change of definition in injection point

"‘Inter-connection Point’ shall be the point where the power from the Project is injected into the nearest transmission/distribution grid sub-station, including the dedicated transmission/distribution line connecting the Projects with such substation;".

Nearest MSETCL substation from the plant is at 8.78 km. MSETCL vide MOM dated 28.5.2019 have confirmed that power can be evacuated from the plant at 132 kV through 132 kV Line Bay at Phurusngi S/S. Thus, the petitioner has considered transmission line of 132 km underground cable of Al 630 sqmm for 37.4 km ( 4 runs : 3 phase run + 1 spare ) for interconnection to nearest MSETCL substation.

The Petitioner has availed quotes from MSETCL approved transmission line suppliers and estimated a reasonable cost to be incurred on account of construction of the required transmission line. The petitioner has further deducted Rs 515 lacs compensation towards capital cost of transmission line envisaged from PMC on account of change in location. The capital cost consideration towards transmission line is illustrated in the table below:

Table 15: Transmission Line Capex

Particulars UOM Value

132 kV, 630 sq mm , Aluminium Transmission line Capex ( incl taxes)

Rs Lacs 2211.65

Civil cost a/c Transmission Line (incl taxes) Rs Lacs 2618.38

Less compensation a/c PMC Rs Lacs 515.00

ROW Rs Lacs 1000.00

Net Capex towards TL incl Civil & Taxes Rs Lacs 5315.03

17.23 The Transmission line in consideration will have to pass through densely populated area to reach the nearest MSETCL substation. Keeping the safety standards in view the Petitioner has gone for buried underground cabling which would entail civil work and Right of Way (ROW) acquisition activities. Based on the quotes received from MSETCL approved vendors and the on ground survey carried out, the Petitioner has considered a cost of Rs 2618.38 lacs towards Civil works & Rs 1000.00 lacs towards RoW, attributed to transmission line construction


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17.24 The delay, if any, in construction of evacuation line for evacuation of power can lead to delay in starting power generation and shorten the operating life of the project. Such reduction in life will lead to increase in tariff which would ultimately burden the consumers of Maharashtra. Also delay in commissioning would lead to increased cost of IDC, resulting in higher Capital cost and higher tariff.

17.25 The new RE Tariff regulations 2019 define -

“Date of Commissioning’ as the date of commissioning declared by a Generating Company in relation to a Unit of its Generating Station: Provided that date of commissioning shall be certified based on joint inspection by RE Generator and concerned Distribution Licensee or SLDC as may be applicable;

Delay in commissioning entails cost to the RE generator primarily on account of but not limited to loss of generation & increase in IDC amount and thus directly impacts the actual RoE realised by the project. In the event of a delay in SCOD, the petitioner requests for a right to approach the commission for a compensatory tariff to compensate for such loss, provided delay is not attributed solely to the RE generator

Misc. Fixed Assets:

17.26 Misc Fixed assets as indicated in capital cost break-up in Table 6. includes plant equipment which are not a part of EPC package but form an essential part of the plant equipment. The list of items is as illustrated below:

Table 16: Break up of Misc. Fixed assets Miscellaneous fixed assets Rs. In Lacs

A. Technical handling Vehicles for internal use 50.00

B. Weigh bridge 50.00

C. Workshop equipment, Laboratory Equipment and measuring instruments 45.00

D. EB power facility at the plant 10.00

E. Office equipment, monitoring systems, communication systems, etc 75.00

F. Safety equipment, First aid etc., 25.80

Total price for fixed assets (incl taxes) 255.80

Capex Phasing:

17.27 The table below demonstrates the phasing of capex for Pune waste processing project:-

Table 17: Phasing of capex Month Phasing Cumulative

progress at the end of the month

1 7% -

4 14% 7%


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7 22% 21% 10 21% 43% 13 10% 64% 16 7% 74% 19 8% 81% 22 11% 89% 24 0% 100%

Soft costs

Interest during construction:

17.28 The interest during construction period is capitalised to calculate the total project cost. The rate of interest considered for the term loan is 10.14% and is calculated for 70% of the project cost (20,727.90 Rs Lakhs of Loan). The IDC is calculated considering the phasing of the capital expenditure.

17.29 The below table demonstrates the computation of IDC:-

Table 18: IDC Computation Table Month Quarterly Drawdown

(INR lakhs) Cumm. Drawdown

(INR lakhs) Cumulative Interest (IDC)

(INR lakhs) Yr- 1 Yr-2 Yr-1 Yr-2 Yr-1 Yr-2

1

1,366.36

2,203.25

1,366.36

14,696.41

11.54

792.61

2 -

-

1,366.36

14,696.41

23.09

916.77

3 -

-

1,366.36

14,696.41

34.63

1,040.92

4

2,793.67

1,645.83

4,160.02

16,342.24

69.77

1,178.98

5 -

-

4,160.02

16,342.24

104.92

1,317.04

6 -

-

4,160.02

16,342.24

140.06

1,455.09

7

4,196.13

1,731.97

8,356.15

18,074.21

210.65

1,607.78

8 -

-

8,356.15

18,074.21

281.24

1,760.47

9 -

-

8,356.15

18,074.21

351.84

1,913.16

10

4,137.01

2,409.99

12,493.16

20,484.19

457.38

2,086.21

11 -

-

12,493.16

20,484.19

562.92

2,259.26

12 -

243.71

12,493.16

20,727.90

668.46

2,434.37

Preoperative expenses up to commissioning:


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17.30 The pre-operative and preliminary expenses are incurred in project feasibility studies, technical & commercial studies and related activities for conceptualizing the project, expenses on ecology & topological survey, soil investigation study, land fencing, pre-construction office cost, technology selection and EPC contractor selection, visits to the working plants, cost for preparation of DPRs etc. Since this is a generation project, these studies are very important to determine project viability. Estimated preoperative expenses are INR 237.97 lakhs.

Consultancy services and project management consultancy services:

17.31 Consultancy charges along with the Project Management Cost include support services in different activities that align the project to achieve the program goals and allows for optimized or integrated cost, schedule and effort. Total consultancy and PMC charges, are INR 594.93 Lakhs and INR 356.96 Lakhs respectively, which amount to 2.5% and 1.5% of the project hard cost respectively.

Contingency cost

17.32 Contingency fund is allocated to tide over any escalation in project cost or unforeseen expenditure. Further, since a significant portion of the capital expenditure of plant & machinery is on the key imported equipment, there is a currency risk. Total contingency cost is INR 713.92 lakhs i.e. 3% of total hard cost.

Financing cost

17.33 The financing cost includes up-front fees, processing fees, project appraisal fees, fees of lender’s legal counsel, lender’s independent engineer, syndicator, and lender’s insurance advisor. Estimated financing cost of the project is INR 475.94 lakhs which is 2 % of the Project hard cost.

17.34 It is submitted MSW projects utilize pre-processed MSW, which consists of highly corrosive and combustible chloride which is highly volatile. Therefore, specially designed low pressure boilers with tubes of better quality are required to be used. Also, the requirement of equipment for de-stoning, shredding and drying of pre-processed waste and additional pollution protection equipment are to be accounted for. Due to this, the cost will be more than for the boilers used for generation of steam from other renewable sources such as Biomass.

17.35 The Hon’ble Commission may also consider that even though the cost of producing electricity from such waste to energy project is higher than power from conventional sources, the benefits expected from the projects are much higher in terms of waste management in a most efficient and environment friendly manner, reduced land requirement of landfill etc.

17.36 The Petitioner would like to bring to the notice of the Hon’ble Commission that the capital cost estimated by the Petitioner is as per the highly proven technology i.e. incineration technology available for processing MSW. Due to the location specific project parameters along with obligations stipulated in the Concession Agreement, Capital cost of the proposed plant is significantly influenced. Key aspects are mentioned below:

Additional cost due to odour control system, higher area under PEB

Monitoring system to control 5500 input output points

High capacity of boiler to reduce the impact of seasonal variations on the output


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17.37 The Petitioner, thus, humbly requests the Hon’ble Commission to approve the capital cost for the project as detailed above.

18. FIXED OPERATING COST OF THE PROJECT

18.1. The Petitioner has estimated only fixed cost for Pune MSW project. There is no requirement of additional fuel, if the MSW at boiler feed has calorific value of 1733 kcal/kg. However the petitioner has observed that this calorific value of MSW tends to drop significantly during monsoon season and thus would required use of biomass for calorific value support during that season as illustrated in paras 15.8 to 15.15. Since the use of Biomass is just about 3% of the total fuel requirement, the petitioner has considered this cost of fixed nature only and have gone for single part tariff. The following components of fixed cost have been considered for determination of tariff for the proposed MSW based power plant.

Supplementary Fuel (calorific value support during wet months only)

O&M Expenses

Depreciation

Terminal value

Interest on Long term loans

Interest on Working Capital Loans

Return on Equity

Plant Load factor

Auxiliary Consumption

Tipping fee

O&M expenses

18.2. The regulatory framework for determination of O&M expenses is specified in Hon’ble MERC’s RE tariff regulations. The relevant clauses are mentioned as below:-

“9.1 A Project-specific tariff shall be determined by the Commission on a case to case basis for the following types of Projects:

Waste to Energy Projects based on the technologies approved by MNRE such as Municipal Solid Waste-based Projects;”

“9.2 The determination of Project-specific tariff for generation of electricity from such RE sources shall be in accordance with such terms and conditions as may be stipulated in the relevant Orders of the Commission:

Provided that the financial norms specified in Chapter 2, except with regard to Capital Cost and O&M expenses, shall be the ceiling norms while determining such Project-specific tariff.

“20.1 O&M expenses shall comprise repair and maintenance (‘R&M’) expenses, establishment (including employee) expenses, and administrative and general expenses including insurance.


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20.2 O&M expenses shall be determined for the Tariff Period based on normative O&M expenses specified by the Commission in these Regulations for the first year of the Review Period.

20.3 Normative O&M expenses allowed under these Regulations shall be escalated at the rate specified in the Regulations of the Commission governing Multi Year Tariff over the Tariff Period, for computation of the Levelised tariff.”

18.3. The proviso to Regulation 9.2 of Hon’ble MERC tariff regulations provides for project specific tariff determination of waste to energy projects. Hence the Petitioner requests the Hon’ble MERC to determine O&M expenses for Pune waste processing plant considering its project specific features.

18.4. The O&M Cost for the MSW waste processing Project at Pune has been estimated as INR 2,222.13 Lakhs incurred during the first year of operation, as tabulated below:-

Table 19: O&M Expenses for the plant (in INR lakhs)

Particulars For power plant For pre- treatment plant Total

Import/ Expat

Local Sum Import/ Expat

Local Sum

Employee Expense / Expats 52.50 406.20 458.70 15.75 152.40 168.15 626.85

Admin cost 33.75 40.68 74.43 16.43 98.76 115.19 189.62

Ash handling and Residual Management Cost - 202.86 202.86 - 321.74 321.74 524.61

Electricity charges - 269.62 269.62 - - - 269.62

Total A&G Expense 546.91 436.93 983.84

LDO ( start-up) - 56.16 56.16 - - - 56.16

Consumable & Spare parts 26.00 72.28 98.28 4.48 59.15 63.63 161.92

Water - 17.48 17.48 - - - 17.48

Activated carbon - 64.80 64.80 - - - 64.80

Hydrated lime - 151.20 151.20 - - - 151.20

Ammonia for SNCR - 48.00 48.00 - - - 48.00

CT, BOILER ,chemical - 2.37 2.37 - - - 2.37

Maintenance 36.99 38.65 75.64 17.28 14.40 31.68 107.32

Total R&M & other Expense 62.99 450.94 513.93 21.76 73.55 95.31 609.24

TOTAL 149.24 1,370.30 1,519.54 53.94 646.46 700.39 2,219.93


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18.5. The O&M expenses projected by the Petitioner are bifurcated into the below heads:

Employee expenses:-

18.5.1. The Petitioner has estimated the expenses towards manpower as INR 626.85 lakhs including 68.25 lakhs towards expat services

18.5.2. The petitioner has estimated the employee expenses based on manpower requirement for each activity associated in the execution of the entire project.

18.5.3. The team will be headed by senior management comprising of plant head which is further bifurcated into various Functional Group Heads for O&M, Electrical, Instrumentation, Civil, Environment, Health & Safety (EHS), Information Technology (IT), Stores, Accounts, HR & Admin and Purchase departments. The functional heads will have their Assisting Engineers, executives and technicians.

18.5.4. There will also be requirement of skilled fitters, welders, riggers as well as semi-skilled and unskilled labour. Fitters are basically the essential skilled manpower that review, plan, review set-up and guide other manpower for completion of various jobs. Riggers will be required for handling and shifting heavy machinery and equipment so that fitters can then get the work done.

18.5.5. Power plant requires specialized IBR welders (Indian Boiler Regulations), for welding pressure parts like drum, waterwall piping, High pressure piping etc. Since plant can breakdown anytime or any failure can happen anytime, these fitters, riggers, welders and helpers have to be always available and prepared with all necessary tools, tackles and welding machines.

18.5.6. The Petitioner has assessed the manpower requirement on the basis of various functions involved in the operation of plant.

18.5.7. The existing employees shall require extensive knowledge transfer in terms of technology, etc. hence this expense is essential for the project. The personnel must be trained and available before the plant commissioning commences and therefore it is essential that, appointments are made well before the programmed plant commissioning date. The staffing and the organisational structure is decided based on considering the specific requirements of the man power preferably, with WTE power plant background.

18.5.8. The level of competence and skills required for personnel of a waste to energy plant has to be higher than those required for a conventional power plant. This is because of the processing needs, changing composition, seasonal fluctuations and unstable combustion possibilities. The O&M personnel in the MSW power plant (Especially the boiler operators and the shift engineers), requires appropriate training as the MSW mass firing technology is in developing stage in Indian context. The proper training shall be provided by the equipment supplier at manufacturer’s works and at project site.


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18.5.9. Retention of both skilled and unskilled manpower is extremely critical to the successful lifecycle operation of the plant. Hence, appropriate cost consideration towards compensation and staff facilities are of utmost importance to enable the same.

18.5.10. Detailed break-up of Manpower consideration is as provided below:

Table 20: Breakup of Manpower Consideration Processing plant operating staff (domestic) Power Plant Pre-processing

Nos. Salary/m Nos. Salary/m Plant Head 1 200,000

O&M Head 1 150,000

Stores - Head + Assistant 2 150,000

Accounts - Head + Assistant 2 115,000

HR & Admin - Head + Assistant 2 100,000

IT 1 50,000

Safety 1 40,000

Chemist 2 60,000

Lab personnel 2 75,000

Drivers 4 80,000 6 120,000 Purchase Head + Assistant 2 100,000

Security

In-Charge 1 35,000

Gunman 1 25,000

Guards 15 375,000

Maintenance

Mechanical

In-charge 1 35,000

Shift engineers 3 75,000 3 75,000 Millwright Fitter 1 30,000

Senior Fitter 1 30,000 1 30,000 Junior Fitter 2 40,000 2 40,000 IBR Welder 1 35,000

Normal Welder 2 40,000 2 40,000 Rigger 1 30,000

Electrical

In-charge 1 35,000

Shift engineers 3 75,000 3 75,000 Technicians - Electrical 3 60,000 3 60,000 Instrumentation

In-charge 1 35,000

Shift engineers 3 75,000 2 50,000 Technicians - Instrumentation 3 60,000 2 40,000 Civil

Engineer 1 35,000

Operations

Shift In-charges 4 160,000

DCS operators-Boiler 4 100,000

DCS operators-Turbine 4 100,000

Waste crane operators 8 200,000

Boiler First class operators - Mandatory as per IBR 4 120,000

Boiler Second class operators - Mandatory as per IBR 4 100,000

Turbine operators 3 60,000

Pre-processing operators 6 120,000 Pre-processing segregators 6 120,000 Weighbridge operators 4 80,000


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Processing plant operating staff (domestic) Power Plant Pre-processing Nos. Salary/m Nos. Salary/m

Unskilled Labour 15 300,000 21 420,000 Sub Total (Rs per month) 110 3,385,000 61 1,270,000 Total Cost per annum (Rs/yr) 40,620,000 15,240,000

18.5.11. Waste to Energy projects are technologically complex. Petitioner has selected a technology from the vendors with the proven track record. These projects cannot afford a long down time owing to a need to process huge quantum of incoming MSW. The Petitioner has therefore considered services of expat personnel for plant for the preventive health check-up of the plant and machinery for the entire project life. Such preventive maintenance would involve hiring expats from India and abroad from China and Europe. Such expats will be staying at a site and shall monitor the health check-up of plant and Machinery.

18.5.12. The costs of INR 68.25 lakhs on account of Expat Experts, cost of their travel, stay in India, etc.is detailed as below:

Table 21: Break up of O&M Expat Services Processing plant operating staff (Expat) Power Plant Pre-processing

No. Annual

days Salary/ day Nos.

Annual days

Salary/ day

Boiler mechanical Expat 1 30 35000

FGT mechanical Expat 1 30 35000

Power plant Electrical Expat 1 30 35000

Power plant Instrumentation Expat 1 30 35000

Turbine Expat 1 30 35000

Pre-processing Mechanical Expat 1 15 35000

Pre-processing Electrical Expat 1 15 35000

Pre-processing – Instrumentation Expat 1 15 35000

Total Cost per annum (Rs/yr) 5,250,000 1,575,000

Administrative and General Expenses:-

18.5.13. The administrative and general charges estimated by the Petitioner amounts to INR 983.84 lakhs.

18.5.14. The costs include INR 189.62 lakhs towards regular administrative expenses towards printing, stationery, conveyance etc. The Petitioner had saved huge amount under this head due to the fact that it had provided accommodation to its employees near to the plant. Hence the conveyance allowance and other amounts on transportation is saved to a large extent.


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18.5.15. The cost also comprises ash handling and residual management cost amounting to INR 524.61 lakhs. The ash handling system shall be designed and constructed aiming for totally dust free operation. The design of equipment shall ensure maintenance of noise and vibration levels within the limits. The activity includes costs towards ash handling within the plant area during operations and residual management at the time of pre-processing of MSW. The activities are described as below: -

Bottom ash handling –

18.5.16. Bottom ash discharged from the boiler furnace is extracted by a Bottom ash extractor which then conveys and discharges the same in a bottom ash pit. The grate riddling’s collected at the grate bottom, coarse fly ash from second and third pass hoppers as well as fly ash from economiser hoppers are also conveyed by separate conveyors to the bottom ash extractor. The pit has a storage capacity of two days and is equipped with a handling crane. This crane is used to lift and load the stored bottom ash into trucks for further disposal of the same into the existing landfill by Corporation.

18.5.17. Though the provision of dumpers/trucks and conveying of bottom ash from power plant to landfill is in Corporation scope, but the various ash collection equipment’s can breakdown during operations and also there are spillages during regular operations during which time the ash is dumped/discharged on the ground by alternative openings. This spilled ash needs to be handled, collected and conveyed to the bottom ash pit using alternative method i.e. by using JCB/excavator and dumpers/trucks. When the crane is under breakdown or maintenance, stored bottom ash needs to be removed from pit using excavator and loaded into corporation truck/dumper.

Fly ash Handling –

18.5.18. Fly ash collected in Bag filter hoppers is conveyed by a drag chain conveyor to the Pneumatic dense phase fly ash handling system, which further conveys the same to the fly ash silo. The fly ash silo is provided with ash extracting conditioner with an unloading spout through which the stored fly ash is discharged into a truck/dumper located below.


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18.5.19. The provision of fly ash truck/dumper and further transport to landfill is in Corporation’s scope. However, the drag chain conveyor and the dense phase pneumatic handling system can be under breakdown and also spillages can happen during regular operation. The ash pipes can get choked sometimes due to excessive moisture in fly ash and they then have to be removed and cleaned by removing choked ash which then lies on the ground. Sometimes, due to some problem with drag chain conveyor, the fly ash stored in hoppers is discharged directly to the ground. In such conditions, the Petitioner need to collect the spilled ash using JCB/excavator and then dumped into truck/dumper to a safe place away from operational area till the corporation trucks arrive. The ash has to be then re-loaded into the corporation trucks.

Pre-processing area inert/other waste component handling –

18.5.20. The incoming mixed waste is first fed into a feeding conveyor through a feed hopper by crane/excavator. The shredded waste is discharged into the splitter where first stones/other big sized 3D objects are separated and then undersized organic waste gets separated. Oversized inorganic waste i.e. RDF is then discharged into a conveyor with manual station where workers remove unwanted oversized waste. The RDF/processed waste is then conveyed to the waste pit. The undersized organic waste from splitter is then conveyed to star type disc screen where there is further segregation of (-) 30mm sized inerts and (+) 30mm waste is then conveyed to the Wind Sifter, where the lighter fraction like paper, card board, plastics etc. i.e. RDF is separated from the heavier organic fraction by fan suction and is then mixed with the main RDF fraction i.e. (+) 60mm waste from Splitter and fired into the boiler by waste crane. The wind sifter also removes remaining heavy inerts from the waste and they are taken away for disposal in landfill. The balance organic waste is also mixed with main RDF from Splitter and fired in the boiler. The inerts, stones and other 3D objects discharged from Splitter needs to be collected by JCB/excavator and loaded into truck/dumper to be transported to a common place for Corporation truck/dumper to pick-up whenever they arrive. Excavator/JCB will be required to load the inerts into the Corporation truck/dumper.

18.5.21. The (-) 30mm undersized waste from star screen is discharged by screen to a safe place on the floor of the pre-processing section. Thereby, it is collected using excavator/JCB and loaded into truck/dumper which then conveys it to a common place where it is dumped on ground for Corporation truck/dumper to pick up. The waste lying on ground has to be loaded into Corporation truck/dumper using JCB/excavator.


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18.5.22. Sometimes, the plant will be using biomass fuel as supplementary fuel; especially when the waste is of low calorific value; like in monsoon and winter seasons. This stored biomass fuel needs to be transported to the waste pit. It is loaded into truck/dumper/tractor trolley using excavator/JCB. Similarly, unwanted inerts/waste components are removed by workers/metals segregated from waste and inerts/non-combustible waste segregated in wind sifter also need to be collected using excavator/JCB and transported to common place using truck/dumper from where they again need to be loaded into corporation truck/dumper using excavator/JCB.

18.5.23. The Petitioner has estimated the cost towards electricity charges as INR 269.62 lacs. The demand is estimated as 1250 kVA and 1.75 MUs will be drawn from the grid by the WtE plant annually for start-up purpose. The Petitioner has referred MSEDCL’s tariff order no 322 of 2019 wherein the electricity consumption for waste processing plants falls under category HT-VIII-B. The Petitioner has considered the fixed charge, energy charge, wheeling charge, Fuel adjustment charge as approved by Hon’ble Commission and computed electricity charges as INR 269.62 lakhs. Calculation of these charges are illustrated as below:

Table 22: Cost towards Electricity Charges (startup) Electricity charges - Simplified calculation (ref MERC MYT order FY 20-21)

UOM Value

Annual units units 1750000

Wheeling charges Rs/unit 0

Energy charges Rs/unit 9.21

Fuel adjustment charge Rs/unit 0

Fixed/Demand charges Rs/kVA 391

kVA demand kVA 1250

Total electricity charges, lakhs Rs/annum 269.62

18.5.24. The estimation of units has been done considering that there are certain difficulties in operation of Waste to energy plants which results into unplanned shut down of the plant. Some of the factors have been described below:

The MSW is usually delivered to the plant till 2 PM after which the number of vehicles which deliver the waste reduces. The waste delivered on holidays is much less than other days. The storage of waste is provided in the plant for 4 to 5 days to take care of the issue. But, despite all these measures, there are times when the waste available in plant is lower especially on long weekends and long holiday periods. This causes the plant load and its operational parameters to vary thereby causing tripping of plant and stoppages too. Monsoon and winter seasons also cause problems in waste delivery to plant.

The waste calorific value is never constant. It varies throughout the day and also throughout the year with monsoon being the worst, as waste is wet. The


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plant output and its performance parameters keep varying as per the waste calorific value.

The waste is a fouling fuel i.e. its combusted gases stick to boiler’s heat transfer surfaces and have to be stopped for an annual shutdown and operation for a midyear check-up.

Repair and maintenance expenses: -

18.5.25. The Petitioner is estimating INR 609.24 lakhs towards repair and maintenance which primarily comprise of cost towards LDO for start-up, diesel cost for pre-processing JCBs and Black Start-up, hydrated lime, activated carbon, ammonia for SNCR, CT - Boiler Chemicals, spares, consumables & other electrical/mechanical items.

18.5.26. The consumption of LDO, diesel, hydrated lime and activated carbon can vary depending upon the waste characteristics of different projects. If the waste quality and characteristic changes significantly, the consumption can also go up correspondingly. It is important to note that with increase in the pollutant gases in the boiler flue gas, the requirement of hydrated lime and activated carbon that needs to be injected also increases to ensure that emission levels are maintained as per the norms. Similarly, lower the calorific value of the waste, higher will be the LDO consumption. The LDO consumption has been calculated considering number of black start-ups, cold start-up and hot start-ups annually.

18.5.27. The costs towards for LDO, hydrated lime, activated carbon and ammonia have been estimated as INR 320.16 lakhs.

18.5.28. The R&M expenses includes INR 161.92 lakhs towards consumables and spares. These projects cannot afford a long down time owing to a need to process huge quantum of incoming MSW. The Pune MSW plant will require regular repair and maintenance in order to function at its optimum capacity. The plant will require monthly inspection of various components of the plant to ensure safety and optimum utilization of the facilities. Some of the activities considered are mention as below:-

Detailed inspection and record keeping of the plant Repair and maintenance record. Reject management Periodic environmental monitoring to ascertain ground water and air

quality as prescribed by Maharashtra Pollution Control Board. Regular maintenance of all equipment, machineries, pumps,

treatment units etc. Monthly detailed inspection of WTE plant components. Regular reporting of Continuous Emission Monitoring System

(CEMS) data. All equipment shall be maintained as per manufacturer’s

recommendation and frequency.


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Ensure security and safety of the facilities. Parts replacement for running the WTE plant at its optimum capacity. Corrections during operations for waste characteristics.

18.5.29. This cost is essential for day to day repair and maintenance of the plant. This cost mainly comprises of the spares and consumables like valves, fabric filter bags, Idlers, Rubber conveyor belts, splitter flights etc. Spares are normally used to replace items that fail in service. During maintenance, either the parts that have reached end of their life or are near failure or have been recommended by manufacturer for replacement are used.

18.5.30. The parts of various machineries operated under WtE project is prone to numerous breakdown resulting into immediate replacement of the parts. These parts may not be readily available in the market and therefore this delay in receiving such parts by the Petitioner results into loss in production and farther delays.

18.5.31. The Petitioner has estimated INR 17.48 lakhs towards tertiary treatment (RO treatment) of water required for plant operations throughout the year. The cost of treatment is estimated at about Rs 12 per cubic meter of water requirement.

18.5.32. The Petitioner has estimated INR 2.37 lakhs towards chemicals for boiler operations. The chemicals are used to remove oxygen, undissolved solid particles from water passed through the Boiler.

18.5.33. The R&M costs also include INR 107.32 lakhs towards electrical and mechanical maintenance. This cost is towards maintenance of boiler (Grate Bar, Compression plate, roof piece), plant electrical (switchboard, LT motor centre), air compressor (V belts, Crank shaft oil), Turbogenerator etc.

18.5.34. Break-up of R&M expenses is summarised as below:

Table 23: Break up of R&M Expenses

Particulars R&M Expense for Power Plant (Rs

Lakhs)

R&M Expense for Pre-Processing (Rs

Lakhs) Total (Rs Lakhs)

LDO start-up & Black start 56.16 - 56.16 Consumable & Spare parts 98.28 63.63 161.92 Top up/ Make up water for Boiler 17.48 - 17.48 Activated carbon 64.80 - 64.80 Hydrated lime 151.20 - 151.20 Ammonia for SNCR 48.00 - 48.00 Cooling tower and Boiler chemicals 2.37 - 2.37 Maintenance (Electrical and mechanical)

75.64 31.68 107.32

Total R&M & other Expense 513.93 95.31 609.24

Escalation factor for O&M expenses (for Plant as well as pre-treatment facility):


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18.6. The methodology for computation of O&M escalation rate is prescribed by the Hon’ble Commission in Clause 47.1(c ) of amendment to Maharashtra Electricity Regulatory Commission (Multi Year Tariff) Regulations, 2019,.The relevant clause is as below:-

“47.1 (c )The Operation and Maintenance expenses for each subsequent year shall be determined by escalating these Base Year expenses of FY 2019-20 by an inflation factor with 50% weightage to the average yearly inflation derived based on the monthly Wholesale Price Index of the past five financial years as per the Office of Economic Advisor of Government of India and 50% weightage to the average yearly inflation derived based on the monthly Consumer Price Index for Industrial Workers (all-India) of the past five financial years as per the Labour Bureau, Government of India, as reduced by an efficiency factor of 1% or as may be stipulated by the Commission from time to time, to arrive at the permissible Operation and Maintenance expenses for each year of the Control Period…..

Provided further that the efficiency factor shall be considered as zero, in case the Availability Factor of all Generating Units/Stations of the Generating Company is higher than NAPAF, or there is an improvement in the Availability Factor of all Generating Units/Stations of the Generating Company of at least 2 percent annually over the last 3 years, in case the Availability Factor of all Generating Units/Stations of the Generating Company is lower than NAPAF.”

18.7. The above-mentioned clause in tariff regulations considers WPI and CPI index of preceding 5 financial years for computation of O&M escalation rate. The Petitioner in this petition requests the Hon’ble Commission to consider the inflation rate of preceding 20 financial years for computation of O&M escalation rates. This is due to the reason that cost profile of waste processing plants are much different from other RE projects. The cost profile of Pune Waste processing plant is given in the below table. The MERC form 2.1 attached as Annexure-G of this petition highlights the following:-

Table 24: Per unit O&M

Per Unit cost of Generation (Tariff petition for Pune WtE)

Unit Pune waste processing plant

Year 2 Year 19

PU O&M Expenses (A) Rs./ kWh

3.12 7.78

PU Int. on Working Capital (B) Rs./ kWh

0.56 0.67

PU Fixed Operating expenses (A+B) Rs./ kWh

3.68 8.45

Levelized Tariff Rs./ kWh

9.92 9.92

Fixed Operating expense as % of fixed Levelised tariff

% 37% 85%

18.8. As it is seen from above that the operating expenses of the project increases from 37% of tariff revenues in 2nd year to 85% in 19th year for levelized tariff. This means that major part of the tariff revenues go in meeting the running operating expense of the waste processing project.

18.9. If the similar analysis is conducted for Wind, Solar, Small hydro and Biomass projects, the situation would be completely different.


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Table 25:Per unit O&M cost comparison with Other RE

Per Unit cos of Generation (MERC RE tariff order 2019)

Unit SHP 5-25 MW Biomass Solar Thermal

Year 2 Year 19

Year 2 Year 19

Year 2 Year 19

PU O&M Expenses (A) Rs./ kWh 0.70 1.09 0.49 0.77 0.98 1.52 PU Int. on Working Capital (B) Rs./ kWh 0.10 0.11 0.33 0.39 0.25 0.26 PU Fixed Operating expenses (A+B)

Rs./ kWh 0.80 1.20 0.82 1.16 1.23 1.78

Levelised Tariff (Fixed) Rs./ kWh 4.13 4.13 2.28 2.28 11.15 11.15 Fixed Operating expense as % of fixed Levelised tariff

% 19% 29% 36% 51% 11% 16%

18.10. In solar, SHP, biomass RE projects the operating expenses as a percentage of fixed levelised tariff would be in the range of 11% to 51%. This means that if the project is operated for one more year, likely Contribution Margin (CM = Revenue less operating expense) produced would range in 89% till 49% of revenues. This is significant. Moreover, it would not require additional capital investment for operating those RE projects for a few more years. Hence, it would pull down Levelised tariff materially with the increased operating life.

18.11. On other hand, for the proposed project in Pune city, the quantum of Contribution Margin (CM = Revenue less operating expense) for the extended life would be just around 5% of revenues. Moreover, annual O&M would be escalating for the extended life, and one more instance of additional O&M for periodic maintenance would be due in 20th year. All above would reduce Contribution Margin further to a miniscule value.

18.12. Hence, seeing the huge burden of O&M expense towards the end of the project, Petitioner requests the Hon’ble Commission to consider the inflation rate of 20 years (equivalent to useful life) for the purpose of computation of escalation rate. The Petitioner would also refer to Explanatory Memorandum for MYT regulations, 2017 issued by the Hon’ble Commission on 26th Oct, 2017 wherein it has mentioned that it is appropriate to consider the WPI and CPI variation over a longer period of time so that wide fluctuations are smoothened while computing inflation factor. The Pune Waste processing project has a useful life of 20 years and hence it is important that the escalation rate covers the fluctuations for a longer period. Therefore, the Petitioner has considered the inflation rate for 20 years. The Petitioner has worked out the last 20 years average WPI and CPI indices from FY 1999-2000 to FY 2018-19 considering 50% to WPI and 50% to CPI, which works out to 5.52%.

Table 26: O&M escalation rate Particulars Value

Average WPI rates from FY 99-00 to FY 18-19

4.96%

Weightage of WPI 50%

Effective weightage average value of WPI

2.48%

Average CPI rates for FY 99-00 to FY 18-19

6.08%

Weightage of CPI 50%


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Particulars Value

Effective weightage average value of CPI

3.04%

Weighted average value of inflation rate considering WPI (50%) and CPI (50%) for FY 99-00 to FY 2018-19

5.52%

Efficiency factor 1%

O&M escalation rate 4.52%

18.13. The O&M escalation rate computed as per the Hon’ble MERC’s regulations comes to 4.52%. However the Petitioner requests the Hon’ble Commission not to deduct efficiency factor of 1 % due to the fact that the technology will not have efficiency gain as apparent in other RE projects as:-

o The waste to energy technology is relatively new as compared to solar and other RE projects, therefore efficiency factor should not be applied to the escalation rate.

o The O&M cost profile of waste to energy projects is very much different from other RE projects such as wind, small hydro, biomass and Solar PV. The cost towards O&M for waste processing plants is 42% and 95% of the total cost in 1st year and 2nd year respectively. If the similar analysis is conducted for Wind, Solar, Small hydro and Biomass projects, the situation would be completely different. In solar, SHP, biomass RE projects the operating expenses as a percentage of fixed levelised tariff would be in the range of 11% to 52%. Therefore the O&M cost forms a major portion in the total cost of waste to energy projects, which can’t afford error in projections.

o The waste to energy projects are at a nascent stage when compared to other RE projects thereby the viability of these projects is very critical.

In the light of the above explanations, the Petitioner humbly requests the Hon’ble Commission for approving the O&M escalation rate as 5.52% without considering the deduction of efficiency factor of 1%, since Waste processing technology has peculiar operating dynamics than other RE projects.

Periodic maintenance and overhaul:

18.14. The Petitioner has estimated in this petition the expenses towards periodic maintenance of the plant as INR 1,050 lakhs. This is over and above the regular maintenance of the plant, in order to ensure that the plant functions at its optimum capacity, this periodic maintenance expense is essential. The Petitioner has estimated to incur such expense at the end of 5th, 10th 15th and 20th year i.e. after every 5 years.

18.15. The Concession agreement signed with PMC mentions that the Petitioner have to handback the peaceful possession of the plant and project land free of cost and in normal operating conditions. Therefore considering the same periodic maintenance in essential for the Pune waste processing plant.


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18.16. The Petitioner has estimated such expenses to be incurred at the end of 5th, 10th and 15th and 20th year. The detailed break up of periodic maintenance expenses is demonstrated in the below table:-

Table 27: Periodic Maintenance Expenses Periodic Maintenance Amounts at present (in lakhs)

Refractories 150

Bags, FGT 200

Tubes/Condenser 100

Grate Elements/ Grab Cranes, etc.

150

Rotating Equipment 100

Pre-processing Equipment 250

Electrical Instruments 100

Total 1,050

18.17. As this expense of Rs INR 1,050 lakh (at present costs) is to be incurred in 5th year and 10th and 15th and 20th year.

18.18. The Petitioner has considered the WPI inflation rate for 20 years for computing escalation on periodic maintenance as WPI represents the average rate of inflation related to equipment /items of capital nature. The Petitioner has considered longer period for computing the WPI inflation rate due to the fact that such expense shall be incurred till the end of useful life of the plant. Hence the spread over larger number of years is essential. The WPI rate computed based on data available on “Office of Economic Advisor) for 20 years comes to 4.96%.

Table 28: WPI rates Year Inflation rate

1999-00 3.32%

2000-01 7.13%

2001-02 3.61%

2002-03 3.38%

2003-04 5.48%

2004-05 6.47%

2005-06 4.42%

2006-07 6.59%

2007-08 4.74%

2008-09 8.05%

2009-10 3.81%

2010-11 9.56%

2011-12 8.94%

2012-13 7.35%

2013-14 5.98%

2014-15 2.00%

2015-16 -2.49%

2016-17 3.69%

2017-18 2.91%

2018-19 4.29%


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Year Inflation rate

CAGR for Escalation 4.96%

18.19. The expense towards periodic maintenance works out to INR 1,337.66 lakhs, INR 1,704.12 lakhs, INR 2,170.99 lakhs and INR 2,765.75 lakhs in 5th ,10th , 15th & 20th year of operation, respectively.

18.20. To summarize, the O&M cost claimed by the Petitioner has two components-

(i) Regular O&M expense of INR 2,219.93 lakhs in the first year, escalated every year by 5.52%.

(ii) Overhaul expense towards periodic maintenance in 5th year, 10th year, 15th year and 20th years amounting to INR 1,337.66 lakhs, INR 1,704.12 lakhs, INR 2,170.99 lakhs and INR 2,765.75 lakhs respectively. .

Transmission Line O&M

18.21. The petitioner has considered the O&M cost for transmission line , in line with MYT Regulations 2019

18.22. The MYT regulations 2019 provides for O&M expenses for Transmission lines as below:

Table 29: O&M Transmission cost norms

Voltage Level FY20-21 FY21-22 FY22-23 FY23-24 FY24-25

>66kV & < 400 kV (in Rs lakh / ckt km)

0.24 0.25 0.26 0.27 0.28

18.23. The Petitioner has considered O&M cost for the 8.78 km Transmission line in line with the above norms and the same is as presented below:

Table 30: Transmission Line O&M Cost

Table 31: Summary of O&M Expenses

Particulars Base O&M expenses


Total O&M expense

Particulars Base O&M expenses


Total O&M expense

1 2,222.13 - 2,222.13 11 3,802.74 - 3,802.74

Year--> 1 2 3 4 5 6 7 8 9 10

O&M for Tranmission line (as per MYT Reg

2019)

Rs Lacs

2.2 2.28 2.37 2.46 2.53 2.6 2.68 2.75 2.83 2.91

Year --> 11 12 13 14 15 16 17 18 19 20

O&M for Tranmission line (as per MYT Reg

2019)

Rs Lacs

3 3.08 3.17 3.26 3.36 3.45 3.55 3.66 3.76 3.87


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2 2,344.79 - 2,344.79 12 4,012.63 - 4,012.63

3 2,474.22 - 2,474.22 13 4,234.11 - 4,234.11

4 2,610.80 - 2,610.80 14 4,467.82 - 4,467.82

5 2,754.89 1,337.66 4,092.55 15 4,714.43 2,170.99 6,885.41

6 2,906.94 - 2,906.94 16 4,974.65 - 4,974.65

7 3,067.38 - 3,067.38 17 5,249.24 - 5,249.24

8 3,236.68 - 3,236.68 18 5,538.99 - 5,538.99

9 3,415.32 - 3,415.32 19 5,844.73 - 5,844.73 10 3,603.83 1,704.12 5,307.95 20 6,167.35 2,765.75 8,933.10

Return on Equity:

18.24. As per the RE Tariff Regulations 2019, the tariff for Projects based on RE technologies shall be a single-part tariff consisting of the return on equity component as below:

18.1 The value base for the equity shall be 30% of the Capital Cost, or the actual equity (in case of project-specific tariff determination) as determined under Regulation 15.

18.2 The Return on Equity shall be computed at the base rate of 14%, to be grossed up as per the Minimum Alternate Tax (‘MAT’) rate applicable as on 1st April of the previous

Financial Year.

18.25. The Return on Equity tariff component, in essence, is provided such that the project developer is able to avail reasonable returns after recovery of all applicable cost components. It is imperative that the return on equity is commensurate to the risks associated with RE projects under considerations.

18.26. We firmly believe that the risk associated and the extent of management involvement in the lifecycle of a MSW based Waste to Energy project are substantially higher than other RE projects such as Wind and Solar.

18.27. The risks & management involvement of WtE projects can be considered commensurate up to a certain extent to those of Bagasse based Cogen or Biomass based projects on account of the nature of operations. Moreover, the lack of homogeneous nature of input feed i.e. MSW as against Bagasse/ Biomass further increases the risks & management involvement

18.28. We further wish to highlight the following objections to the RoE raised during the public hearing of RE Tariff Regulations 2019 :

Shri Uday Kamat suggested that the base rate of RoE should be maintained at 16% as per the MERC RE Tariff Regulations, 2015, as reduction in rate of RoE will disincentivize RE capacity growth.

The Cogeneration Association of India submitted that base rate of RoE should be 16% instead of 14%, as Cogeneration Projects have lower generation capacity despite all risks continuing to remain similar to larger capacity Thermal Plants operating on Fossil fuels.

18.29. Keeping in view the above illustration, project risk profile & management involvement, we have claimed an RoE of 16% as a justified reasonable return in the tariff , which was similar to the RoE as per RE tariff regulations, 2015


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18.30. We wish to bring to the notice of the commission that 80IA benefit of 10 year tax holiday is discontinued for new RE plants i.e. thus, directly corporate tax shall be applicable to the petitioner. It would be unfair to apply grossing up of MAT rate over the RoE, as the same would result in reducing the actual return on equity envisaged for the project. Hence, the Tariff so computed for this project should include the incidence of the grossing up of ROE considering actual tax applicable to the petitioner i.e. Corporate Tax Rate. We have considered RoE gross-up over effective tax rate of 29.12% ( 25% base rate + 12% Surcharge +4% Cess)

Depreciation

18.31. Regulation 17 of the MERC RE Tariff Regulations, 2019, pertaining to depreciation is as follows:-

“16.1 The value base for the purpose of depreciation shall be the capital cost of the asset as admitted by the Commission. The salvage value of the asset shall be considered as 10%, and depreciation shall be allowed up to a maximum of 90% of the capital cost of the asset.

16.2 Annual Depreciation shall be based on the ‘Differential Depreciation Approach’ using the ‘Straight Line Method’ over two distinct periods comprising loan tenure and the period beyond loan tenure over the useful life. The depreciation rate for the first 12 years of the Tariff Period shall be 5.83% per annum, and the remaining depreciation shall be spread over the remaining useful life of the project from the 13th year onwards.

16.3 Depreciation shall be chargeable from the first year of commercial operation.”

18.32. The Petitioner has computed depreciation on capital cost estimated by the Petitioner i.e. INR 28,851.318 lakhs. The below table demonstrates the computation of depreciable amount:-

Table 32: Computation of Depreciable amount S.no. Particulars Amount in INR lakhs

1 Capital Cost 29,611.29

2 Depreciable Amount (90% of S.no 1)

26,650.16

18.33. PBESPL has projected depreciation at the rate of 5.83% per annum for the first 12 years of the Tariff Period.

18.34. The remaining depreciation amount (up to 90% of capital cost) has been spread over the remaining Useful Life of the Project i.e. 8 years, in line with the Hon’ble MERC’s RE Tariff Regulations, 2019.

Terminal value

18.35. Clause 10.2 (i) of the Concession agreement states that:-


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(i) The Concessionaire shall on the date of expiry of Concession period or subject to Article 12.6.2 upon termination of this Concession agreement, handback peaceful possession of the plant and project land free of cost and in normal working condition.

(ii) At least 3 (three) months before the expiry of the Concession period, a joint inspection of the plant shall be undertaken by an Independent Engineer and the Concessionaire. The Concessionaire shall promptly assist the independent engineer in preparing the necessary documentation for proper handing over the plant and the project land to PMC at least 2 (two) months prior to the expiry of the Concession period.

(iii) The Concessionaire shall before handing over to PMC attend to all maintenance works of broken down equipment.

18.36. The Clause in Concession agreement states that the Petitioner shall hand back possession of the plant free of cost to the Corporation. The Petitioner would refer to Clause 16.1 of Hon’ble MERC RE tariff regulations which states that the salvage value of the asset shall be considered as 10%, and depreciation shall be allowed up to a maximum of 90% of the capital cost of the asset.

18.37. In this case as the Petitioner shall return the plant at NIL value to the Corporation hence the Petitioner requests the Hon’ble MERC to allow the salvage value of 10% of the plant in tariff component. The salvage value as estimated by the Petitioner is INR 2, 961.13 lakhs.

Interest on loan capital

18.38. The period of repayment of loan is defined by the Hon’ble Commission in Regulation 16 of MERC RE Tariff regulations, 2019 specified as below:-

“For the purpose of determination of tariff, the loan tenure shall be considered as 12 years.”

18.39. The Petitioner has considered the loan repayment period as 12 years as defined in the RE tariff regulations.

18.40. Clause 15.2 of MERC RE tariff regulations provides for consideration of the rate of interest on loan as follows:

“For the purpose of computation of tariff, the average of the one-year Marginal Cost of Funds-based Lending Rate (‘MCLR’) as declared by the State Bank of India for the previous year plus 200 basis points, shall be considered as the normative interest rate;

Notwithstanding any moratorium period availed, the repayment of loan shall be considered from the first year of commercial operation of the Project and shall be equal to the annual depreciation allowed.”

18.41. The Petitioner has observed that the reference rate for sanction of new loan has been shifted to MCLR instead of SBI Base Rate. Also, the Commission had amended the provisions of MERC (MYT) Regulations, 2016 vide amendment dated 29 November, 2017, wherein the Commission has amended the definition of Base Rate as below:


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2. Amendment to Regulation 2.1 (10): -Regulation 2.1 (10) of the principal Regulations shall be substituted by the following:

“Base Rate” shall mean the one-year Marginal Cost of Funds-based Lending Rate (“MCLR‟) as declared by the State Bank of India from time to time;”

18.42. PBESPL has taken the interest on long term debt at 200 basis points above the State Bank of India (SBI), one-year MCLR for the period of 1st Apr 2018 to 31st Mar 2019. The below table shows the computation of SBI base rate:-


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Table 33: SBI MCLR Rate

1 year MCLR by SBI Rate April '19 8.50% May'19 8.45% Jun'19 8.45% Jul'19 8.40% Aug'19 8.25% Sep'19 8.15% Oct'19 8.05% Nov'19 8.00% Dec;19 7.90% Jan'20 7.90% Feb '20 7.85% Mar'20 7.75% Average 1-year MCLR 8.14% 1-year MCLR+300 base points 8.39%+2.00%=10.14%

18.43. Accordingly the SBI MCLR (8.14 %) plus 200 basis points has been applied, and interest on debt computed as 10.14% per annum.

Interest on Working Capital

18.44. Regulation 19.2 of the RE Tariff Regulations, 2019 specifies the components of working capital.

“The Working Capital requirement in respect of Biomass-based Projects, non-fossil fuel based Co-Generation Projects, and Waste to Energy Projects shall consist of::

a) Fuel costs for four months equivalent to normative Plant Load Factor (‘PLF’);

b)O&M expenses for one month;

c) Receivables equivalent to two months of fixed and variable charges for sale of electricity calculated on the normative CUF;

d) Maintenance spares @ 15% of O&M expenses.”

18.45. The RE tariff regulations specifies the period of receivables as 2 months for computation of interest on working capital. However, the Petitioner in this petition has considered 6 months receivables for claiming interest on working capital.

18.46. The Petitioner would submit that the power generated from the plant shall be procured by MSEDCL, hence it becomes evident to study its timeliness of payments to the generators.

18.47. The Petitioner has analysed the data published at PRAAPTI4 portal wherein it has computed the days payables outstanding (DPO) by MSEDCL. It was found that the substantial payable amounts due to RE generator are outstanding for more than a year days i.e. > 365 days months.

4 http://www.praapti.in/state-dashboard/maharashtra


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Figure 12: Snapshot of outstanding payments to RE generators by MSEDCL

18.48. MSEDCL’s payment history of and hence requests the Hon’ble Commission to consider at least 6 months for receivables for the purpose of computation of interest on working capital.

18.49. The Petitioner has also considered the impact of receivables on Non-Tariff income (Tipping Fees) i.e. within 15 days as per the payment terms of the Concession Agreement signed with PMC.

18.50. PBESPL has taken the interest on working capital at 150 basis points above the State Bank of India (SBI) one-year MCLR for the period of 1st April 2019 to 31st March 2020 in line with RE Tariff Regulation 2019.

“Interest on Working Capital shall be the average of the one-year Marginal Cost of Funds based Lending Rate (‘MCLR’) as declared by the State Bank of India for the previous year plus 150 basis points.”

Accordingly, the SBI MCLR (8.14 %) plus 150 basis points has been applied, and interest on working capital is computed at 9.64% per annum

Plant Load factor (PLF)

18.51. The calorific value and composition of Pre-processed MSW is highly variable as it will have heterogeneous mix and it cannot be predicted. Further, during monsoon season, there will be higher moisture content in the Pre-processed MSW that will reduce the calorific value and therefore the power production of the plant.

18.52. The petitioner estimates that given the unique nature of the plant, the stabilization period in the first year will be longer as unforeseen circumstances will lower productivity. Accordingly, the Petitioner has considered the following PLF for computation of tariff, as committed by the technology provider:

a) First Year: 65.00% (stabilization period)

b) Second Year Onwards: 80.00% (post stabilisation remaining period)


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18.53. In an effort to deliver optimum plant output levels throughout the year, the petitioner has taken utmost efforts in finalising the technical specifications & selecting the right technology partners. It is pertinent to note that the petitioner has considered a steady state PLF of 80% which is higher than prevailing trends of steady state PLF across various regulatory commissions as given below.

Table 34: PLF trends across various regulators

Regulatory Commission Year Steady State PLF for MSW based WtE Projects

CERC 2020 75%

CERC 2017 75%

Madhya Pradesh 2016 75%

Gujarat 2016 75%

Chattisgarh 2016 75%

Haryana 2016 75%

Jharkhand 2016 up to

2020 75%

Auxiliary consumption

18.54. The Petitioner has estimated the auxiliary consumption in this petition as 2185 kW for first year and 2463 kW for subsequent years. The Petitioner submits that the auxiliary consumption should be demonstrated in energy terms and not in percentage. The same would give a better understanding of the net generation reduced due to auxiliaries.

18.55. The Petitioner has computed the generation lost due to auxiliaries in the table given below. The PLF considered by the Petitioner is 65% for first year and 80% from second year onwards. However there are certain auxiliaries which would operate at 80% PLF in first as well as subsequent years. Such auxiliaries are highlighted by the Petitioner in the below table in “Orange’ colour. The remaining auxiliaries would operate at 65% PLF in first year and at 80% PLF in second year. The Petitioner has highlighted FGT MCC in “green” colour due to the fact that the Odour control system which comprise of 40 kW of the running load would run at rated capacity throughout the year for all years of operation, whereas the remaining MCC load would operate in line with 65% PLF for first year.

Table 35: Details of Auxiliary Consumption Feeder Name Connected

Load KW

Avg Running Feeder Load KW

No of units consumed in kwh in 2nd Yr

No of units consumed in kwh in 1st Year

BOILER MCC I/C 275 100.00 700,800 569,400 TG MCC I/C 55 30.00 210,240 210,240 ACC MCC I/C 123 50.00 350,400 284,700 FGT MCC I/C 680 400.00 2,803,200 2,330,160 WTP MCC I/C 50 31.93 223,765 181,809 ETP MCC I/C 0 0.00 - - COMMEN AUX MCC & Air Conditioning

700 310.90 2,178,787 2,178,787

MLDB (Plant Lighting ) 50 33.61 235,539 235,539


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Feeder Name Connected Load KW

Avg Running Feeder Load KW

No of units consumed in kwh in 2nd Yr

No of units consumed in kwh in 1st Year

FIRE MCC 116 2.52 17,660 17,660 ID FAN VFD 350 214.20 1,501,114 1,219,655 PA FAN VFD 160 96.60 676,973 550,040 SA FAN VFD 180 117.60 824,141 669,614 SIDE WALL COOLING AIR 15 8.40 58,867 47,830 BFP-1 VFD 400 252.10 1,766,717 1,435,457 BFP-2 VFD 400 0.00 - - ACC-1 VFD 110 63.02 441,644 358,836 ACC-2 VFD 110 63.02 441,644 358,836 ACC-3 VFD 110 63.02 441,644 358,836 ACC-4 VFD 110 63.02 441,644 358,836 GRAB CRANE-1 273 163.80 1,147,910 1,147,910 GRAB CRANE-2 273 0.00 - - Pumping a/c ZLD ( leachate recycle)

50 33.33 233,600 233,600

Ash pit crane 30 15.12 105,961 105,961 Pre processing - - Splitter/Terminator/Wind Shifter / Star Screen 245.00 196.00 1,373,568 1,373,568

Conveyor 80.0 40.33 282,633 282,633 Feeding Hopper 20.0 10.92 76,527 76,527 Grab Crane with Gantry 0 0.00 - - Lighting System 25 8.40 58,867 58,867 LTP 5 3.36 23,547 23,547 Misc. 20 12.00 84,096 84,096 Transformer Losses 80.00 560,640 560,640

Total Load kW / units p.a. 5014 2463.20 17,262,129 15,313,585 2463.20 2185.16 As % of gross generation of (as calculated)

18.67% 16.57%

18.56. The characteristics of Pune waste processing plant which contributes to auxiliary consumption is as follows: -

The proposed project would have air cooled condenser. Air cooled condenser-based projects have typically higher auxiliary consumption than that of water-cooled condenser. Water availability for cooling power plants is a major issue in the proposed project due to frequent water shortages. Waste to energy plants required more sophisticated effluent treatment system which makes the cost of such systems high.

The plant will use Grab crane and grab bucket for MSW spreading, aeration and feeding to the hoppers for further segregation / processing.

The transformer losses have been considered for the auxiliary power. The pre-processing auxiliaries also included in the estimation of auxiliary

consumption.


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18.57. The Hon’ble Commission may appreciate the fact that the Petitioner has been able to reduce the auxiliary consumption by choosing a highly efficient plant and machinery from a renowned technology provider. The Petitioner requests the Hon’ble Commission to approve the auxiliary consumption as prayed by the Petitioner.

Tipping Fee and Other Income

18.58. The Petitioner would refer the Clauses related to tipping fee as demonstrated in the Concession agreement: -

“8.1.1. Subject to the provisions of this Agreement and in consideration of the Concessionaire accepting the Concession and undertaking to perform and discharge its obligations in accordance with the terms, conditions and covenants set forth in this Concession Agreement, PMC agrees and undertakes to pay to Concessionaire, the Tipping Fee at the rate of Rs.360 (Rupees Three Hundred Sixty Only) per metric tons of MSW as constant till the Concession Period.”

“8.1.2 The annual escalation applied is 8% (Eight Percent) on the Base from commencement date. The Concessionaire shall be entitled to the Tipping Fee in proportion to the MSW handled by the Concessionaire.”

18.59. The petitioner has taken a conservative approach to recognise the non-tariff income i.e. income from tipping fee, by considering it based on minimum assured quantity of 600 TPD as against maximum quantity of 750 TPD. It should further be noted that reduction in non-tariff income i.e. on account of reduction in input waste quantity would also significantly impact the tariff income on account of reduced power generation.

18.60. Furthermore, in certain cases of existing MSW based WtE projects, it has been observed during actual operation of the plant, the quantity of waste supplied was found to be lower than the agreed quantity as per concession agreement, thus leading to lower power generation. For instance, as per the quarterly report issued by state of MP (April- June 2019) –

Jabalpur Corporation (Stand Alone) Waste to Energy (WtE) project is already operational. Installed capacity of the plant is 11.2 MW, but at present 7-8 MW is generated per day because of less quantity of waste being available.

18.61. Hence the tipping fee is considered for minimum assured quantity of 600 TPD for 365 days over 20 years.

Discount rate

18.62. PBESPL applied a discount rate of 9.99% which is the weighted average cost of capital for determination of Levelized tariff as per regulation 12.2 of RE tariff regulations, 2019.

18.63. The detailed break up of costs is annexed as Annexure- H of this petition.


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19. OTHER COMMERCIAL ASPECTS

19.1. CDM: In the current market context, the CDM benefits are negligible and highly uncertain. Therefore, the petitioner has not considered any CDM benefit.

19.2. REC: As per the Central Electricity Regulatory Commission (Terms and Conditions for recognition and issuance of Renewable Energy Certificate for Renewable Energy Generation) Regulations, 2014 and subsequent amendments, the projects having project specific tariff (preferential tariff) will not be able to avail REC:

"5. Eligibility and registration for Certificates

(1) A generating company engaged in generation of electricity from renewable energy sources shall be eligible to apply for registration for issuance of and dealing in Certificates if it fulfils the following conditions:

(b) it does not have any power purchase agreement for the capacity related to such generation to sell electricity, with the obligated entity for the purpose of meeting its renewable purchase obligation, at a tariff determined under section 62 or adopted under section 63 of the Act by the Appropriate Commission:

Provided that in case of renewable energy sources based co-generation plants, the connected load capacity as assessed or sanctioned by the concerned distribution licensee, shall be considered as the capacity for captive consumption for the purpose of issue of certificates, irrespective of the capacity of such plants covered under the power purchase agreement."

Capital Subsidy or any type of subsidy or Generation based incentive if any:

19.3. The Petitioner has explained regarding non-consideration compensation for the purpose of tariff determination in para 1.14 of the Petition.

Must Run Status, and Exemption from Merit Order Dispatch

19.4. The Petitioner humbly requests the Hon'ble Commission to grant exemption to the proposed project from Merit Order Dispatch principles and grant it “Must Run” status like other RE projects for entire project life. MSW being challenging fuel for power generation, and need for highly sophisticated effluent treatment system makes its variable cost so high that it cannot compete with thermal power plants to get selected under merit order despatch.

Wheeling charge, Transmission charge, Regulatory Asset Surcharge, Pension Trust surcharge, Cross Subsidy Surcharge, Additional Surcharge & DSM Regulations

19.5. The Petitioner humbly requests the Hon’ble Commission to grant exemption to the proposed project from various open access charges on sale of power to third party.

19.6. The Petitioner has analysed the history of delays in payments made to the generator by MSEDCL (as explained in para 18.48 in this petition). As MSW project is relatively smaller than other sources of power and the power is costlier, there might be a possibility that the Petitioner would not get preference in terms of timely payment of its dues.


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19.7. In such a scenario, to make the project viable the Petitioner might have to resort to selling of power to the third party such as Corporation etc. Such sale would attract Cross subsidy surcharge and additional surcharge on the cost of the power. The levy of such charges will make the MSW power even costlier. The Petitioner would face difficulty in selling such costly power through open access.

19.8. Therefore, the Petitioner requests the Hon’ble Commission to exempt open access charges in case of third party sale of power for MSW projects.

19.9. As per MERC Deviation settlement mechanism & related matter Regulation 2019, the regulations are applicable to generating capacity above 25 MW including RE generator but excluding wind & solar, open access generators, captive generators connected to intra-state transmission system. Since our plant is of capacity 13.19 MW, it would stand exempted from DSM regulation as on date. However, to shield the project from any adverse implication due to any future change in above exemption, the said prayer has been made. It will safeguard the project for its the entire life.

Zero Contract Demand Charges

19.10. The Petitioner requests the Hon’ble Commission to exempt the WtE projects from contract demand charges. These projects are set up in the context of promoting sustainable waste processing and disposal and development of waste to energy. Hence, such projects should get the benefit of zero contract demand charges

Payment Security Mechanism

19.11. In June, the Power Ministry has made a statement making it mandatory for power distribution licensees to open and maintain adequate letters of credit as a payment security mechanism under PPAs. Also the new draft electricity bill proposes for a stronger Payment security regime along with establishment of contract Enforcement Authority. Thus, the petitioner request the Commission, to direct inclusion of payment security mechanism vide Letter of Credit to be included in the PPA with Discom.

19.12. The Petitioner has analysed the data published at PRAAPTI portal (as referred in para 18.47 above) wherein it has computed the days payables outstanding (DPO) by MSEDCL. It was found that the debts due to the generator are outstanding for more than 365 days i.e. more than a year . The Petitioner thus requests the Hon’ble Commission to direct MSEDCL to provide for a payment security equivalent of at least 6 month of billing amount maintained through Letter of Credit .

The petitioner has considered a receivable of 6 months on payments from Discom in the working capital calculations as mentioned in clause 18.46. In the event Discom makes a the due payments consistently within 2 months (via LC) from the invoicing date, the petitioner would consider to provide an early payment rebate of 2% as per the prevailing tariff, to the Discom, to the extent of quantum of early payments. However, the delay is beyond the period of 6 months such additional tariff would increase by 10% for every month of delay.

To further safeguard against the delayed payment from procurer, among other things, a levy of delayed payment surcharge of 1.25% on every month of delay on pro-rata basis beyond payment due date shall be applicable.

.


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20. PROPOSED TARIFF

20.1. As discussed above, the fixed cost of project comprises of O&M Expenses, Depreciation, Interest on Term Loan, Interest on Working Capital, Return on Equity and taxes thereon. Tipping Fees provided by PMC as per the concession agreement are the only consideration for Non-tariff income while seeking tariff.

20.2. No other non-tariff revenue streams are considered as the plant does not envisage any recyclable waste quantum nor any income from sale of ash for brick making/other purpose is considered as collection & disposal of ash shall be carried out by PMC.

20.3. Accordingly, the year-wise total fixed cost over the life of the power plant as well as year wise fixed cost per unit have been provided in Form 2.2 as per MERC RE Regulation 2015.

20.4. The tariff proposed in the petition is of levelized nature i.e. 9.92 Rs/kwh. The year-wise fixed cost over the life of the power plant as well as per unit variable costs have been provided in Form 2.2 as per Hon’ble MERC’s RE Regulation 2019 in Annexure-H.

20.5. It is pertinent to note that the overall impact of inclusion of the Transmission line (with Civil, taxes & RoW) on account of RE Regulations 2019 comes to Rs/kwh 1.34 on levelized tariff

20.6. The petitioner would like to highlight the fact that though levelized tariff from WtE would tend to be higher than other RE plants due sheer nature of such plant, its impact on the consumer would be negligible as power purchased from WtE plants would form a very small percentage of total power procurement of Discom.

21. IN SUMMARY

21.1. The Petitioner is in process to develop the Waste to Energy plant in Ramtekdi, for processing upto 750 TPD (with minimum assured quantity of 600 TPD) of waste of Pune city and converting it to electricity, which shall be sold to MSEDCL. Therefore, the Petitioner has filed this petition for determination of tariff for the proposed Waste processing plant. The tariff estimated considering the project specific features and regulatory norms is 9.92 Rs /kwh on Levelized basis.

21.2. Keeping in view the track record of MSEDCL payments to RE generators, the Petitioner also requested the Hon’ble Commission to direct MSEDCL to provide for a payment security equivalent of at least 6 month of billing amount maintained through Letter of Credit. The Commission to direct for inclusion of appropriate clauses to ensure such payment security in the PPA with MSEDCL.

21.3. The Pune waste processing plant shall be equipped with sophisticated technology for pre-processing and power generation to ensure rated output with minimum down time. The waste processing facility shall be robust enough to handle any seasonal variations to the quantum of MSW supply as agreed in the concession agreement. The Petitioner has taken extreme care of the fact that the well-being of general public is not affected due to plant operation, by installing state of the art, offline and online odour control system with increased coverage area and flue gas system with SNCR, no leachate discharge to ground along with complete recycling to reduce raw water feed and providing for adequate afforestation in the buffer zone.


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21.4. As the primary objective of this plant would be environment protection, hence the Petitioner prays for certain reliefs such as NIL cross subsidy charge and Additional surcharge, zero contract demand charges. Also to secure its payments being a smaller project the Petitioner has requested to approve the mechanism for levy of additional tariff over and above the approved tariff if the delay in payments exceeds the period of 6 months and beyond from the stipulated time.

21.5. We request the Hon’ble Commission to consider the submissions and pass the Order that shall eventually safeguard the environment.


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SECTION-III

ANNEXURES


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ANNEXURE-A MEMORANDUM AND ARTICLES OF ASSOCIATION (enclosed)


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ANNEXURE-B MSW TEST REPORT


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ANNEXURE-C PHOTOGRAPHS OF THE VISIT


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ANNEXURE-D DETAILED PROJECT REPORT (enclosed)


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ANNEXURE E – CONCESSION AGREEMENT (enclosed)


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ANNEXURE-F PLANT LAYOUT PLAN (enclosed)


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ANNEXURE-G MERC FORM 2.1 (enclosed)

ANNEXURE- H MERC FORM 2.2 (enclosed)

Documents

Before the Maharashtra Electricity Regulatory Commission