MSEDCL Gets Nod For Long-Term Solar Power Procurement At Rs 2.90/unit  

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The Maharashtra Electricity Regulatory Commission (MERC), in its latest judgment, allowed the Maharashtra State Electricity Distribution Company (MSEDCL) to procure solar energy from the state’s 500 Megawatt (MW) grid-connected intra-state solar projects (Phase-IX) at the rate of Rs 2.90 per kilowatt. The decision came after the discom moved the Commission seeking their approval.

The discom, earlier on September 30, 2022, had floated a tender to procure 500 MW of solar power from these projects through competitive bidding (e-reverse auction). Four renewable companies namely-Taletuttayi Solar Projects Eight Pvt Ltd, SJVN Green Energy, Tata Power Renewable Energy, and Spring Solar Energy, were later declared successful bidders. They bid from Rs 2.90/unit to Rs 2.98/unit. The tariff was supposed to be applicable for a long period of 25 years.

However, considering the higher rates, MSEDCL requested the parties to match the negotiated discovered tariff it received from its earlier bids. Later the successful bidders, after rounds of negotiations, agreed to the tariff of Rs 2.90/unit. MSEDCL, in its petition, also informed the Commission that due to higher transmission costs, the discom wanted the bids only for intra-state transmissions. 

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It also said that these arrangements were meant to cater to the Renewable Purchase Obligations (RPO) of the discom.

“MSEDCL is in a shortfall for the fulfillment of Solar RPO Target of around 5189 MU till FY 2021-22, and the Commission has set up Solar RPO Targets of 13.5 % for FY 2024-25 as against 3.5 % in FY 2019-20. Therefore, it is essential for MSEDCL to procure solar power,” the discom said in its petition.

It also added that the discovered tariff of Rs 2.90 per unit was less than Rs 4.05 per unit, the average power purchase cost approved by the Commission for FY 2022-23.

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“Considering the rates discovered for the projects under the current market scenario, the final tariff rates discovered in MSEDCL’s 500 MW Intra state solar tender at STU/Maharashtra periphery after the e-reverse auction i.e. Rs. 2.90 per kWh are competitive and found reasonable to MSEDCL,” the order from MERC said.

It also added, “The Commission accords its approval for procurement of 500 MW on a long-term basis from grid-connected Solar power PV projects at a tariff stipulated in the table in para 3.19 above and allows MSEDCL to enter into Power Purchase Agreement with the successful bidder for Twenty-Five years.

MERC said that the solar power procured from these projects would be eligible to fulfill Maharashtra State Electricity Distribution Co. Ltd.’s Solar RPO for the respective periods.