MEDA Allowed to Get Rs 2.25 to Rs 2.52 for Wind Projects With Expired EPA’s

The MERC (Maharashtra Electricity Regulatory Commission) has allowed, with conditions, MEDA’s demonstration wind projects, which had outlived their EPA (Energy Purchase Agreement)  period with MSEDCL, to earn revenues on the basis of MOU’s with the state discom.

The Commission accorded approval to proposed power procurement arrangement between Maharashtra State Electricity Distribution Company Limited and Maharashtra Energy Development Agency from demonstrative projects at Rs.2.25 for Group-1 projects and Rs. 2.52 for Group – II and III projects on long term basis through MoU route till the useful life of the project i.e. 25 years as per provisions of RE Tariff Regulations, 2019.

Group 1 projects typically had EPA’s for a longer tenure. However, such tariff was made  applicable with prospective effect only after signing of EPA’s. Thus energy supplied by these projects from 2019 till date would not be compensated for

The MERC also specified that the Maharashtra Energy Development Agency shall deposit revenue earned from sale of electricity from these Wind Projects during this extended EPA period in separate account and such amount shall be used for O&M related expenses of these projects and balance amount needs to be used for setting up of new demonstration projects . The Wind Power procured from these projects shall be eligible towards fulfilment of Maharashtra State Electricity Distribution Co. Ltd.’s Non-Solar RPO for the respective periods.

The price of Rs 2.52 had been discovered after an earlier plea by MSEDCL where it had requested for extension of PPA’s with wind energy projects that had expired. On a request for 500 MW of purchases, it had received a response for only 7 MW on offer, at the said price, which had been accepted by the commission, as it was still lower that the prevailing prices.

The issue of expiring and still functional wind energy projects is likely to assume greater significance in the months and years to come, as similar instances of projects nearing or at the end of their initial contracted PPA’s start with greater frequency soon.

Readers will realise that wind energy had a massive head start on solar in India, and thanks to some generous tax benefits and feed in tariffs, the industry has hundreds of installations that are over 15 and 20 years old today.

While the larger opportunity off course should be in upgrading or repowering the same to a higher capacity, the whole effort promises to be a painful and tortuous process, thanks to the many changes that have happened in the policy environment since. Be it competitive bidding, reconciling fractional ownership of many of these wind energy generators, and even the willingness of the same owners or fresh owners to continue with the same business .