Current Date: 11 Jul, 2025

Powering Up: DAE's New Tariff Policy for Nuclear Energy Projects

The Department of Atomic Energy (DAE) has issued revised tariff guidelines for nuclear power plants commissioned on or after April 1, 2022, offering two return on equity (RoE) options: a fixed 15.5% RoE over the plant’s operating life or a variable RoE spread over the duration of the power purchase agreement (PPA).

Under the variable RoE model, returns may start lower, increase over time, and then decline—ensuring the present value equals that of the fixed 15.5% RoE. Projects commissioned before April 1, 2022, will continue under the fixed RoE regime.

The notification affirms that tariff norms are to be determined by the central government in consultation with the Central Electricity Authority (CEA) for atomic power supplied to state electricity boards (SEBs) and other buyers.

For new Pressurised Heavy Water Reactors (PHWRs), a 70:30 debt-equity ratio is mandated. Future technologies will have capital structures evaluated on a case-by-case basis. Any equity beyond 30% will be treated as a notional loan for tariff calculations.

The plant load factor (PLF) for India’s 12 operational nuclear stations currently ranges from 68.5% to 80%. The new norms also eliminate any stabilisation period and fix PHWR fuel charges using a 12% discount rate over 15 years.

 

News by Rahul Yelligetti.

 

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Source : projxnews