The Maharashtra Electricity Regulatory Commission (MERC) has approved the development of the 400/220 kV GIS Ambernath substation at Palava in the Thane district under the dedicated distribution facility framework through Option 1.

Under Option 1, Lodha Developers will develop the substation at its own capital cost under the technical supervision, design standards, inspection, and control of the Maharashtra State Electricity Transmission Company (MSETCL). The asset will then be handed over to the transmission company free of cost for operation and maintenance.

The Commission held that the project must be executed on a priority basis to meet the proposed data center load by 2027.

It said the project is required to serve the Green Integrated Data Center Park at Palava and to meet data center loads in Mumbai, Navi Mumbai, and the Thane corridor.

Background

The Ambernath project was approved by the Empowered Committee for implementation through the tariff-based competitive bidding route at its meeting on July 8, 2025. The project’s stated objective was to cater to the rapidly growing data center load in the Ambernath region.

The Government of Maharashtra appointed REC Power Development and Consultancy as the bid process coordinator for conducting the bidding process.

Six bidders participated in the process and qualified for the opening of initial price offers after technical evaluation. Four bidders later qualified for the reverse auction.

However, during the reverse auction process, the discovered tariff was found to be abnormally low, unrealistic, and commercially unviable compared with the base price and prevailing market conditions. The bid evaluation committee later annulled the bidding process.

The State Transmission Utility (STU) argued that retendering the project through the competitive bidding route could lead to a similar situation and further delay the project’s implementation.

The Empowered Committee later considered the magnitude of the upcoming load, connectivity timelines, and the project’s  importance. It was observed that establishing the 400/220 kV GIS substation at Ambernath by 2027 had become essential and that the project required priority implementation.

Lodha Developers informed the State Transmission Utility that it was willing to undertake the development of the proposed Ambernath substation at its own cost and transfer the infrastructure to MSETCL free of cost. Lodha also conveyed its willingness to bear and reimburse the substation’s annual operation and maintenance expenses.

The STU said Maharashtra has already granted grid connectivity for approximately 1,450 MW of load in the Ambernath region, while an additional 1,500 MW of load is under consideration. The total expected load of 2,950 MW is expected to be connected to the Maharashtra State Transmission Grid by 2027.

Commission’s Analysis

The Commission examined whether the project needed priority execution and whether it could be implemented under the Dedicated Distribution Facility framework.

It noted that the project had already been delayed because of the annulled bidding process. It also considered the 2027 timeline for data center connectivity, the need to avoid transmission constraints, and the requirement to ensure grid reliability.

The Commission referred to the Maharashtra Government’s Integrated Green Data Center Park Policy, notified on October 9, 2024.

MERC noted that Lodha had entered into memoranda of understanding with the Government of Maharashtra in September 2024 for investments of approximately ₹300 billion (~$3.13 billion) and in January 2026 for investments of approximately ₹1 trillion (~$10.44 billion) toward the development of a Green Integrated Data Center Park at Palava.

The Commission noted that the development and commissioning of extra-high-voltage transmission infrastructure, including substations and transmission lines, generally requires about two to three years.

It said the proposed transmission arrangement includes infrastructure dedicated exclusively to supplying power to the proposed Green Data Center Park through the 400/220 kV GIS substation.

The arrangement is intended to serve consumers within the data center park and does not form part of the general network used to supply other consumers.

The Commission held that the proposed substation, being infrastructure dedicated exclusively to supplying power to the Green Data Center Park, qualifies as a Dedicated Distribution Facility under the MERC Supply Code Regulations, 2021.

The Commission said the Supply Code Regulations permit a consumer or group of consumers to develop a Dedicated Distribution Facility at their own cost. It also noted that the cost incurred by the consumer for developing such a facility is not reimbursed.

Since Lodha Developers will bear the entire capital cost of the project, the Commission said no capital expenditure would be recovered through transmission tariffs from other consumers in the state. It also said there would be no socialization of the project’s capital cost and no additional tariff burden on other transmission system users.

The Commission directed STU and MSETCL to execute the project under the Dedicated Distribution Facility framework through Option 1.

MERC also directed the utility and the transmission company to comply with the State Grid Code Regulations, 2020, while executing the project under the supervision of MSETCL and while connecting it with inter-state transmission lines.

Recently, MERC approved the Maharashtra State Electricity Distribution Company’s proposal for long-term procurement of 2,500 MW of round-the-clock renewable energy.

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