Maharashtra Commission Approves a Tariff of ₹2.52_kWh to Procure 500 MW of Wind Power

The Maharashtra Electricity Regulatory Commission (MERC) has issued an order approving the procurement of 7 MW of wind power at a tariff that was requested by the Maharashtra State Electricity Distribution Company Limited (MSEDCL).

The Maharashtra DISCOM had presented a petition to the commission seeking the approval for the adoption of the tariff rate arrived at during the competitive bidding process for its 500 MW wind tender. Bids were received for only 7 MW at a tariff rate of ₹2.52 (~$0.03)/kWh.

The tender for the procurement of 500 MW of wind power on a long-term basis for eight years was floated in June 2019.

In its petition, the DISCOM had sought the commission’s approval for entering into an EPA with the bidders as their existing agreement had expired and an e-reverse auction for the tender was not possible. It further sought the commission’s approval for using the allotted power to meet its RPO targets.

The commission has approved the procurement of 7 MW of wind energy at a tariff rate of ₹2.52 (~$0.03)/kWh and allowed the bidders to enter into an energy purchase agreement (EPA) for eight years. The state body also permitted MSEDCL to use the procured wind power for meeting its non-solar renewable purchase obligation targets.

The commission stated that the rate of ₹2.52 (~$0.03)/kWh that was discovered through competitive bidding was the same that it has previously allowed for purchasing wind power for short-term from generators whose EPAs had expired.

Previously, Mercom had reported that the Maharashtra Electricity Regulatory Commission (MERC) had asked the MSEDCL to procure wind energy from projects whose energy purchase agreements have expired, to fulfill its non-solar renewable purchase obligation. The MERC was going through submissions made for a petition filed by MSEDCL seeking its approval to procure power from wind projects whose EPAs have expired. The MSEDCL had submitted this request as it could not attract the interest of bidders when it had floated a tender for procuring power from such wind projects keeping ceiling tariff at ₹1.97 (~$0.028)/kWh. The ceiling tariff had been set by the MERC.

In September 2019, the state had issued another tender to procure 500 MW of wind power through a competitive bidding process. Through this tender, the distribution company intends to meet its non-solar renewable purchase obligation by buying wind power under a long-term PPA of 25 years.