MERC Approves PPAs for Solar Projects Totaling 235 MW in Maharashtra

The Maharashtra State Electricity Distribution Company Limited (MSEDCL) has amended a number of provisions in its request for selection (RfS) and power purchase agreement (PPA) for the 1,400 MW solar tender that was issued in September 2018.

The 1,400 MW (AC) of solar projects are slated to be developed in 30 circles of the state: While 50 MW of solar projects will be developed in 26 circles, 25 MW of solar projects will be developed in 4 circles.

Key Amendments

  • The projects must be commissioned within a period of 18 months from the date of execution of the PPA. Initially, this period was 15 months.
  • In the case of a delay in commissioning of the project up to three months, MSEDCL will encash the performance bank guarantee on a daily basis which will be proportionate to the balance capacity not commissioned. Initially, this encashment procedure began after six months.
  • In the case the commissioning of the project is delayed beyond three months, the tariff discovered will be reduced at the rate of ₹50 (~$0.006)/kWh for each day of delay in the remaining capacity not commissioned for the entire term of the PPA.
  • The maximum time period allowed for commissioning of the project with encashment of the performance bank guarantee and reduction in the fixed tariff will be 25 months from the date of PPA or until the tariff becomes zero.
  • Earnest money deposit at the rate of ₹500,000 (~$6,942)/MW for each project must be submitted in the form of a bank guarantee. It must be valid for six months from the bid-submission deadline.
  • Generation loss due to non-availability of grid for evacuation will be compensated by MSEDCL at 75 percent of the PPA tariff. Previously, this was only 50 percent of PPA tariff.

MSEDCL has extended the project commissioning timeframe and also intends to pay more for the ensued generation loss due to non-availability of an evacuation infrastructure. The new amendments coupled with the fact that MSEDCL has kept a tariff ceiling of ₹3.10 (~$ 0.043)/kWh for this tender may lead to participation from more developers.

Recently, the MSEDCL issued a tender for the purchase of power on a long term basis from 1,000 MW of grid-connected solar photovoltaic power projects (Phase – II).

Saumy Prateek Saumy is a senior staff reporter with MercomIndia.com covering business and energy news since 2016. Prior to Mercom, Saumy was a copy editor at Thomson Reuters. Saumy earned his Bachelors Degree in Journalism & Mass Communication from the Manipal Institute of Communication at Manipal University. More articles from Saumy Prateek.