The Maharashtra Electricity Regulatory Commission (MERC), in a recent order, ruled in favor of Adani Electricity Mumbai and allowed it to initiate the process to procure power up to 500 MW on a round-the-clock (RTC) basis from grid-connected renewable energy projects, complemented with power from other non-renewable (conventional) energy sources.
Also, the Commission added that the power procured by Adani Electricity Mumbai would be counted towards its renewable purchase obligation (RPO) targets.
Adani Electricity Mumbai had filed a petition seeking approval to procure 1,000 MW of power from grid-connected renewable energy projects, complemented with power from coal-based thermal power projects in India on an RTC basis, under the competitive bidding process.
Adani Electricity Mumbai, in its submission, said that the peak demand for the FY 2019-20 in its area of supply was 1,677 MW and its generating station at Dahanu met this to the extent of 500 MW, of which 162 MW was from long-term renewable energy contracts. The balance was procured from the short-term market.
In its amendment dated February 5, 2021, the Ministry of Power had issued guidelines for ‘Tariff Based Competitive Bidding Process for Procurement of RTC Power from Grid-Connected Renewable Energy Projects’, complemented with firm power from any other source or storage.
To fulfill the RPO targets, Adani Electricity Mumbai had proposed to procure 1,000 MW of RTC power from grid-connected renewable projects, complemented with power from thermal projects with domestic coal linkages.
The distribution company (DISCOM) said that renewable power backed by firm power from thermal projects having domestic coal linkage would help it meet its future RPO targets.
The DISCOM further proposed that the scheduled delivery date should be on or before June 30, 2023, to avail of the exemption for the payment of transmission charges.
The company said that it has an option to procure power in a staggered manner whereby it may procure 600 MW by June 2023 and postpone the procurement of the balance 400 MW by three to four years.
The Commission observed that the company’s demand projections based on which it has arrived at a power requirement of 1,000 MW were on the higher side and needed to be revisited.
The Commission noted that Adani Electricity Mumbai could be allowed to bid for capacity up to 500 MW. After that, based on a detailed study and realistic demand-supply projections, it could approach the Commission to initiate a fresh process for additional power procurement if required.
The DISCOM had highlighted that the waiver for interstate transmission charges and losses from the wind, solar, and wind-solar hybrid projects was applicable until June 30, 2023. Any delay in commissioning from this date would attract charges for interstate transmission and losses, which the developer would bear. Further, state projects connected to the state transmission utility (STU) substations would also be eligible to participate in the bidding process to enable higher competition.
The Commission noted that the Ministry of Power had extended the concession of waiver of transmission charges for projects commissioned up to June 2025.
The DISCOM had sought deviations in the bidding guidelines by specifying that for intrastate projects, the metering should be at the high voltage side of the pooling station of the Maharashtra STU and for interstate projects should be at the periphery of Maharashtra.
The Commission noted that the deviation sought by DISCOM would result in better participation in the bidding process. Accordingly, the Commission granted the deviation sought by DISCOM.
Adani submitted that for non-renewable energy components, it had proposed restricting the thermal power projects having domestic coal linkages only. Hence, only such projects would be eligible to participate in the bid.
The Commission stated that restricting non-renewable energy sources only to domestic coal-based thermal projects will restrict the competitive bidding process. Hence, it was not aligned with the deviation sought by the company to restrict the supply of firm non-renewable power from projects based on domestic-coal linkages only.
The company had also submitted that the variable components of non-renewable power should be quoted as on the scheduled date of commissioning. To avoid estimation of the scheduled date of commissioning by bidders, it had been proposed that bidders would quote variable components of thermal power. After that, it would be escalated.
The Commission observed that the generator would be eligible for compensation to the extent of reduced offtake by the distribution licensee. Such compensation in respect of renewable sources is linked to fixed tariffs quoted for renewable sources. In the case of non-renewable sources, it is linked to the fixed component of non-renewable tariffs. The Commission noted that in the competitive bidding guidelines for thermal projects, a 60% limit is prescribed for the fixed component of tariff and asked the DISCOM to include such limit in the bidding document.
The Commission directed Adani Electricity Mumbai to allow all types of non-renewable sources to participate in the bidding process.
The Commission also directed the company to procure the power in a phased manner by initiating a bidding process for 500 MW in the first phase.
Accordingly, the Commission allowed Adani Electricity Mumbai to initiate the bidding process for power procurement up to 500 MW from grid-connected renewable energy projects, complemented with power from other non-renewable energy sources.
In April this year, Adani Electricity Mumbai launched a program to give consumers the flexibility to set their targets for renewable energy. As part of the company’s Mumbai Green Energy Initiative, consumers subscribing to Adani Electricity Mumbai would have the option to buy clean power under the current MERC’s program of providing 100% renewables by paying an additional ₹0.66 (~$0.009)/kWh.
Earlier, MERC had ordered Adani Electricity Mumbai to comply with its solar and non-solar RPO requirement shortfall by March 2020.
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Rakesh is a staff reporter at Mercom India. Prior to joining Mercom, he worked in many roles as a business correspondent, assistant editor, senior content writer, and sub-editor with bcfocus.com, CIOReview/Silicon India, Verbinden Communication, and Bangalore Bias. Rakesh holds a Bachelor’s degree in English from Indira Gandhi National Open University (IGNOU). More articles from Rakesh Ranjan.