Maharashtra Renewable Plans Back On Track, Powered By Lower Costs

2021 has been a good year so far, for renewable energy growth in Maharashtra, with the primary state discom, Maharashtra State Electricity Distribution Company Limited (MSEDCL) finally happy with the bids it received for its recent tenders. With prices dropping to as low as Rs 2.42 for its last solar tender, besides Rs 2.62 for its Solar+Wind hybrid tender, MSEDCL is finally confident of adding capacity at a speed that matches the state’s size and consumption. Developers from Acme Solar, to ReNew Power, Tata power and Azure power bid aggressively to win these recent tenders..

The developments come even as thermal plants face increasing pressure to clean up, as well as face retirement after serving out 25 years, or their useful lives, whichever is earlier. Gas fired power plants, that are also in the mix, have never been price competitive even within thermal, and at the latest prices, are certainly not an attractive option for the state utility anymore. State energy minister Nitin Raut has already declared there will be no more thermal additions to the state energy mix anymore, and a target of 25% power from renewables in the same period. The one stain on the state’s reputation remains its attitude to rooftop solar, which has been highly dissappointing, to say the least.

An ambitious target of 17,360 megawatts (MW) from solar projects has been set for the next five years.

Readers will recall that MSEDCL had been reluctant to consider bids above Rs 2.90, after closing its last major solar bid at that rate. Along with Gujarat, the state utility had been even cancelling tenders to seek out lower rates.

The drop in renewable energy costs has been having a salutary effect across states. Ironically, some states like Karnataka, Tamil Nadu and Andhra Pradesh, that were early movers in the space, seem to be facing a problem of being locked on to higher renewable energy prices, one of the reasons these states have been slower to add fresh capacity in the past year. But with the difference in costs widening to the extent it has, along with projected growth in energy demand, even these states should finally be able to revive their renewable energy capacity additions in a big way, while perhaps looking at a  way to reduce costs on old projects by allowing capacity expansions at a lower overall cost.

Keep in mind that solar projects set up in the 2014-17 period could be almost 25 percent or more efficient using more modern panels, without requiring extra land. Perhaps by 2024 onwards, these along with old wind installations that can be repowered using higher capacity turbines available today, will be a key pathway to improve both capacity and generation of renewable energy.