MERC Approves Tariff of ₹3.11_kWh for 100 MW of Solar Under Agricultural Feeder Program

The Maharashtra Electricity Regulatory Commission (MERC) has approved the tariff of ₹3.11 (~$0.04)/kWh for 100 MW of solar power on a long-term basis for 25 years.

The project is being developed by Energy Efficiency Services Limited (EESL) at various locations in Western and North Maharashtra under the Mukhyamantri Saur Krushi Vahini Yojana (MSKVY).

Background

In January 2020, the Maharashtra State Power Generation Company Ltd (MAHAGENCO) and the Maharashtra State Electricity Distribution Company Ltd (MSEDCL) had jointly filed a petition seeking the approval for the tariff of ₹3.11 (~$0.04)/kWh for 100 MW of solar projects under the agricultural feeder program.


It was also stated that MAHAGENCO would provide the land at a lease rent of ₹1 (~$0.01) per land parcel. Further, the two petitioners had also requested the Commission’s approval for utilizing the solar power to meet MSEDCL’s solar RPO.

In December 2017, MAHAGENCO had issued three separate tenders for a total of 300 MW of solar capacity. The capacity will be developed on a public-private partnership (PPP) basis to supply power to agricultural (AG) feeders under the Phase-II program.

The Commission had noted that for the three tenders for projects in Western regions A, B, and C, the tariff received was ₹3.18 (~$0.04)/kWh for which the MSEDCL had not given its consent.

Even after repeated extensions of the bid deadline, the cumulative capacity of 150 MW projects for Western Region A, B, and C, did not garner much interest from developers. Besides this, MAHAGENCO canceled 50 MW bid for the Northern Region as the selected bidder refused to agree to a change in the evacuation level from 33 kV to 11 kV.

Out of the 200 MW projects, MAHAGENCO then approached EESL for setting up 100 MW (50 MW in Western Region A and 50 MW in the northern region) to avoid further delay.

The EESL then submitted its proposal to develop the projects at ₹3.11 (~$0.04)/kWh.

In December 2019, EESL floated a tender to procure 100 MW of solar PV modules (325W and above) for Maharashtra under the Mukhyamantri Saur Krishi Vahini Yojana.

Besides the tariff, the Commission also approved the proposed deviations sought in the deemed generation clause. The clause states:

“In any given year during the contract, if the availability of the distribution line/transmission line after inter-connection point for the evacuation of power (during 8 am to 6 pm) falls below 98%, i.e., the line unavailability is more than 175.2 hours (2% x 365 days x 24 hours), and the power is not evacuated, for reasons not attributable to the Solar Power Generator, then the generation loss shall be compensated by MSPGCL at the 75% PPA tariff to offset this loss.”

It has also given its approval to the draft power purchase agreement (PPA) and the power sale agreement (PSA). The solar power procured from the 100 MW solar PV projects will be eligible for the fulfillment of the Maharashtra State Electricity Distribution Company Limited’s (MSEDCL) solar renewable purchase agreement (RPO) for the respective periods.

Notably, Maharashtra has been behind on its RPO compliance and recently filed a petition before the MERC against its new RPO regulations, asking it to not levy penalty on non-compliance of standalone annual targets and cumulative targets of RPO until 2022-23.

Recently, the MERC approved tariff ranging between ₹3.28 (~$0.0436)/kWh to ₹3.30 (~$0.0439)/kWh for the procurement of power from 283 MW of solar projects by the MSEDCL under this program.