Maharashtra Adopts Tariff of ₹3.05_kWh for 184 MW of Solar Projects

The Maharashtra Electricity Regulatory Commission (MERC) has allowed Maharashtra State Power Generation Company Limited (MSPGCL) and Maharashtra State Electricity Distribution Company Limited (MSEDCL) to procure power from 184 MW of solar projects.

The projects set up by Waaree Energies Limited (WEL) under the state’s Mukhyamantri Saur Krishi Vahini Yojana. The commission has approved a tariff of ₹3.05 (~$0.043)/kWh discovered through competitive bidding for 25 years.

The commission has also approved MSPGCL and MSEDCL’s request to make the necessary changes to the power purchase agreement (PPA) and the power sale agreement (PSA) and submit it to the commission.

The solar power procured from these projects will be counted toward the fulfillment of MSEDL’s solar renewable purchase obligation (RPO) for the respective periods.


Background

Earlier, MSPGCL and MSEDCL had jointly filed a petition seeking the approval to the deviations in the competitive bidding process for 184 MW of solar power projects at western, northern, Vidarbha and Marathwada regions of Maharashtra.

The petitioners had requested the Commission to approve the tendering process to carry out the bidding even when there was a single qualified bidder. They had also asked the Commission to approve the tariff of ₹3.23 (~$0.045)/kWh if the developer submitted the invoices for the payment of safeguard duty and ₹3.05 (~$0.043)/kWh if the successful bidder failed to provide the invoices.

MSPGCL had filed a petition to remove the roadblocks for smooth implementation of the PPA and PSA signed between MSPGCL and MSEDCL. In its order dated October 16, 2018, the Commission had approved the modalities suggested by MSPGCL for the PPA and the PSA.

MSPGCL had floated a tender in March 2019, for setting up 184 MW of grid-interactive solar PV power projects at various regions in Maharashtra.

It also included the operation and maintenance of the project on a public-private partnership (PPP) basis to cater to the agricultural feeder load of various substations in the state. MSPGCL had identified the land at multiple sites for the development of 184 MW of cumulative solar power projects.

The ceiling rate for the tender was  ₹3.23(~$0.045) /kWh. Due to a lack of response from the bidders, the bid submission date was extended four times, with the last extended date for bids submission being July 23, 2019.

On the last date of the submission of bids, Waaree submitted the bid, and since there was only one bidder, the reverse auction could not take place.

As the due date for the submission of bids had already been extended three times, and the land for the projects had already been identified by MSPGCL nearly two years back, MSPGCL decided to continue with the bidding process. The tariff for the tender was finalized at ₹3.23 (~$0.045)/kWh as quoted by Waaree. This tariff was inclusive of the ₹0.18 (~$0.0026)/kWh compensation towards safeguard duty (if paid).

The Commission noted that it had recently adopted the rate of ₹2.99 (~$0.042)/kWh for 50 MW of solar power in its order dated December 23, 2019. The rate of ₹3.05 (~$0.043)/kWh, which has been transparently discovered through competitive bidding, is in the vicinity of this adopted tariff, and accordingly, the Commission observed that it was fit to adopt the tariff of ₹3.05 (~$0.043)/kWh.

As far as the approval of deviation related to the minimum bid capacity, compensation for off-take constraints, and performance security is concerned, the Commission had already approved it in an earlier order. The Commission had allowed the reduction in the minimum bid capacity from 5 MW to 2 MW and the performance bank guarantee to be considered as ₹2.1 million (~$29,650)/MW.

Based on the above ruling, the Commission observed that it is fit to direct MSPGCL and MSEDCL to make the necessary changes in the PPA and PSA.

Recently, MERC allowed MSPGCL and MSEDCL to procure solar power at the rates discovered through competitive bidding. The MSPGCL and MSEDCL had jointly filed a petition seeking the commission’s approval for the adoption of tariff at ₹2.99 (~$0.04)/kWh for 50 MW of solar power under the Mukhyamantri Saur Krishi Vahini Yojana.

Earlier, MERC had approved the requests of a petition filed by MSPGCL for two solar power projects of 150 MW and 102 MW capacity. In its petition, the MSPGCL had requested the MERC to allow modifications in the agreed power purchase agreements and power sale agreements for the two projects. Further, MSPGCL had also requested changes concerning deemed generation compensation.