The Maharashtra Electricity Regulatory Commission (MERC) has approved the power sale agreement (PSA) between Maharashtra State Electricity Distribution Company (MSEDCL) and NTPC for 300 MW of wind-solar hybrid power at a tariff of ₹3.36/kWh (~$0.038)/kWh.

It also approved a trading margin of ₹0.07 (~$0.0007).

The 300 MW capacity would be added to the 480 MW capacity previously approved by the Central Electricity Regulatory Commission (CERC).

However, the Commission warned MSEDCL to be vigilant about all the transmission and approval risks and ensure that power delivery issues are avoided.

Background

In 2023, NTPC issued a tender to set up 1,500 MW interstate transmission system-connected wind-solar hybrid projects. Tariffs of ₹3.35 (~$0.0379)/kWh and  ₹3.36/kWh (~$0.038)/kWh were discovered at the end of the tender.

It approached the petitioner, MSEDCL, in February and May 2024, inquiring about the amount of power it would procure from it. The petitioner consented in principle to purchase 2,580 MW of power.

In June, the petitioner signed a 25-year PSA with NTPC for 480 MW from Sprng Vayu Vidyut (250 MW) and Juniper Green Beta (230 MW) at tariffs of ₹3.35 (~$0.0379)/kWh and ₹3.36/kWh (~$0.038)/kWh, respectively, along with a trading margin of ₹0.07 ( $0.0007).

In July, the petitioner approached the CERC to approve the discovered tariffs and the PSA. This request was granted.

In November 2024, MSEDCL submitted a request to MERC for approving 300 MW of additional capacity from ACME Renewtech at a tariff of ₹3.36/kWh (~$0.038)/kWh plus the trading margin. This increased the total capacity for procurement to 780 MW.

The petitioner submitted that it had a combined renewable purchase obligation (RPO) shortfall of 37,154 million units. MERC’s approval of the additional capacity would help the petitioner meet these obligations.

It also contended that the discovered tariff was less than its average power purchase cost (APPC) of ₹4.88 (~$0.05)/kWh and other tariffs discovered in recent tenders of NHPC, SJVN, and NTPC, which ranged from ₹3.41 (~$0.0386)/kWh to ₹3.49 (~$0.0395)/kWh.

The current tender’s landed cost fell between ₹3.51 (~$0.0397) and ₹3.52 (~$0.0398) after adding transmission losses and NTPC’s trading margin. These would still be lower than the APPC.

The petitioner also stated that CERC had already adopted the tariffs for the other developers, thereby providing regulatory backing to its request.

Commission’s Analysis

The Commissioned acknowledged that the petitioner needed to procure 780 MW of power to meet its RPO. It also noted that the discovered tariffs, including the trading margin, were reasonable and competitive.

However, the Commission highlighted that the PSA mandated the petitioner to secure grid access and obtain the no-objection certificates from the state transmission utility (STU) and the state load despatch centre.  It directed the petitioner to be vigilant and coordinate with the STU to ensure grid access availability, clearances, and to avoid power delivery risks.

Recently, MERC approved MSEDCL’s petition for the procurement of an additional 500 MW of pumped hydro storage capacity from Torrent Power.