Should be global stakeholders believe that the project developer did not prepare any project report and relied only on the CERC order for applying to banks for loan? CERC order can only be a reference point to check the acceptability of the figures. If the CERC order norms are going to be the basis, then the DOE is validating a hypothetical project based on CERC norms and not the real project. Therefore, DOE should seek the DPR duly signed by the bank evidencing its authenticity.

By relying on CERC norms for every assumption, the project does not fulfill the requirement of CDM. EB has stipulated guidelines for considering PLF, loan amount and terms of loan etc. Hence, all these assumption are not fulfilling EB requirements.

When PSERC has issued biomass order, why should the PP rely on CERC order? 

When the PP has used CERC norms for all the assumptions, why did he/she not use CERC recommended project cost? CERC recommended project cost is only Rs.4.26 cr./MW, while the PP has taken Rs.6.5 crore/MW. The recently registered project from the same State has assumed a cost of much less than Rs.4 crore/MW. The cost is extremely high. With such a cost the  projects will naturally be additional.

Though the PP states that he has considered only Rs.1965/MT for biomass as against Rs.2092 recommended by CERC, fuel consumption as per CERC order comes to 1.16 kg/kwh, whereas the project developer has taken 1.28 kg/kwh (81053 MT for 63350 MWh). Recently a project got registered from Punjab, which has considered specific fuel consumption of only 1.13 kg/kWh. The cost and consumption are not correct. Quotation cannot be the only basis as any number of quotation can be obtained for any price. 

A cursory glance at sec. B.6 and B.7 reveals that the PP has taken CV of 2984 kcal/kg for rice husk, 3500 kcal/kg for cotton stalk and 2880 kcal/kg for paddy straw. CERC recommends CV of 3200 kcal/kg for rice husk. Where did the PP get this CV from? Any published literature will give the CV of rice husk at 3200 kcal/kg; 4700 kcal/kg. for cotton stalk and 3000 kcal/kg for paddy straw (see http://ces.iisc.ernet.in/energy/paper/alternative/calorific.html).
 
The tariff recommended by PSER in its order dated 30/09/2010 is Rs.4.86/kWh and not what is given in the PDD. 

The benchmark selected is not as per CDM regulations. 

This project is eligible for 100% depreciation and tax holiday. It is also eligible for MNRE subsidy. The PP does not seem to have taken any of these benefits. If these benefits had been taken into consideration the IRR cannot be so low. Moreover, if the IRR does not cross the benchmark even with CDM benefits why is the PP setting up this project? The project cannot be considered additional.