The Maharashtra Electricity Regulatory Commission (MERC) has approved Maharashtra State Electricity Distribution Company Limited’s (MSEDCL) proposal to procure long-term bagasse-based cogeneration power through competitive bidding. This paves the way for grid-connectivity and a   power purchase agreement (PPA) for 200 MW of bagasse-based cogeneration projects in the state.

MSEDCL wanted MERC’s approval to initiate a competitive bidding process followed by reverse e-auction to procure 200 MW grid-connected bagasse-based cogeneration power with the upper tariff ceiling of ₹4.00 (~$0.054)/kWh. It had also proposed these projects be made eligible to meet MSEDCL’s non-solar renewable purchase obligation (RPO) requirement.

After reviewing the petition, MERC has fixed 18 months from the date of signing of PPA as the commissioning period against the previous 13-month commissioning period. MERC has also extended the PPA duration from 13 years to 20 years.

The commission also approved ₹4.00 (~$0.054)/kWh as the upper tariff ceiling fixed by MSEDCL for the procurement from these projects. MERC also ruled that the procurement of power by MSEDCL from the bagasse-based cogeneration projects through competitive bidding process would be counted towards its fulfillment of MSEDCL’s non-solar RPO for the respective periods.

This ruling can also attract developers active in bagasse-based cogeneration project sector, as the PPA will be long-term at 20 years, compared to the previous medium-term 13-year PPA.

In August, The Ministry of New and Renewable Energy (MNRE) invited Expression of Interest (EOI) to assess the potential of biomass power and bagasse cogeneration in India.

The central government’s cabinet, headed by prime minister Narendra Modi, approved the National Policy on Biofuels – 2018 in May. A program to support promotion of biomass-based cogeneration in sugar mills and other industries was also announced in May by the Ministry of New and Renewable Energy’s biomass power division.