Maharashtra Commission Approves Signing of Long Term PPAs for 1,000 MW of Solar Projects

The Maharashtra Electricity Regulatory Commission (MERC) has in an order dated May 27, 2019, approved the signing of power purchase agreements (PPAs) by Maharashtra State Electricity Distribution Company Limited (MSEDCL).

MERC was listening to a petition filed by the MSEDCL seeking approval for adoption of tariff for long term procurement of 1,000 MW of solar power under Section 63 of the Electricity Act (EA), 2003 for meeting the solar renewable purchase obligations (RPO).

It approved the procurement of 1,000 MW of solar power for 25 years, at the rate discovered through the competitive bidding and reverse auctions. MSEDCL had invited tenders under a competitive bidding process which had received an enthusiastic response from the developers. In the e-reverse auction that followed, Shiv Solar Private Limited and ACME Solar quoted the lowest tariff ₹2.74/kWh($ 0.039) to develop 50 MW and 300 MW of solar projects respectively.  Renew Power bid for 300 MW at ₹ 2.75/kWh($ 0.04) and Avaada Energy bid for 350 MW at ₹2.75/kWh($0.04).

MERC in an order dated December 6, 2017, had permitted MSEDCL to procure wind, solar and bagasse-based cogeneration renewable power on a short-term, medium-term and long-term basis at the rate discovered through tariff based competitive bidding (e-reverse auction) process. In the same Order, the Commission directed MSEDCL to file a petition for the adoption of Section 63 of the EA after conducting a competitive bidding process.



The MERC order noted that a total number of seven bidders with cumulative bidding capacity of 1,900 MW submitted their bids, though three bidders with a total capacity of 750 MW were unsuccessful in the reverse auction.

Out of remaining 1,150 MW capacity, Avaada Energy who offered 500 MW was allocated 350 MW due to bucket filling approach, as a result of which, a total of 1,000 MW capacity was allocated to four bidders.

MERC observed that since the discovered tariffs are within the vicinity of the rates earlier approved by the commission and are also comparable with the rates discovered for this year in other auctions of Solar Energy Corporation of India Ltd. (SECI) in other states, it is according approval.

Earlier, MERC had approved PPAs for grid-connected solar photovoltaic (PV) projects totaling 235 MW. The approval was for the long-term procurement of 235 MW of solar power under Mukhyamantri Saur Krishi Vahini Yojana with a set of 2 to 10 MW capacity projects to meet MSEDCL’s solar RPO.

In April 2018, MSEDCL tendered 1 GW of solar PV projects to be developed under the Mukhyamantri Saur Krishi Vahini Yojana and had also approved the initiation of a district (circle) wise competitive bidding process for the procurement of solar power under Mukhyamantri Saur Krishi Vahini Yojana, in Maharashtra.

Image credit: Cleantech Solar