Maharashtra Commission Asks MSEDCL to Invite Bids for Bagasse Projects with Expired EPAs

Recently, the Maharashtra State Electricity Distribution Company Limited  (MSEDCL) had filed a petition before the Maharashtra Electricity Regulatory Commission (MERC) for the approval of procurement of bagasse-based co-generation power for FY 2018-19 for meeting its non-solar renewable purchase obligations (RPO).

The respondents in the petition are Vighnahar Sahakari Sakhar Karkhana Limited (VSSKL), Patil Sahakhari Sakhar Karkhana Limited (PSSK)and Maharashtra Energy Development Agency (MEDA).

MSEDCL had sought the approval of the commission to procure power from VSSKL and RPSSKL bagasse-based cogeneration projects at ₹3.56 (~$0.05)/kWh. The 13-year energy purchase agreements (EPA) for these projects had expired in FY 2018-19.

Last year, the commission had categorically dealt with the issue of the projects whose EPA period had expired. Keeping in line with that order, the commission has directed MSEDCL that the procurement of power from such projects will be through a competitive bidding process and the sale and purchase made under the interim arrangement should be adjusted with the rate discovered through the competitive bidding process.



The commission also ruled that the interim arrangement allowed to the petitioner by an order passed in 2015 will cease to be valid from the date of issuance of this order.

Accordingly, the energy sale or purchase made under such interim arrangement should be adjusted with the rate discovered through the process to be carried out as per the final dispensation as outlined in this order, MERC stated.

It has directed MSEDCL to invite bids for the selection of wind (Group-III), biomass and bagasse projects, whose EPA has expired, immediately after issuance of this order.

Recently, Mercom had reported on a MERC order, where fossil fuel-based co-generation projects in Maharashtra got time up until March 2020 to fulfill their RPO targets.

In January 2019, Maharashtra specified an upper ceiling tariff of ₹3.50 (~$0.049)/kWh for competitive bidding to procure power from fossil fuel-based cogeneration projects in the state.

Last year, the commission had noted that MSEDCL had fallen short of its stand-alone solar RPO target by 689.86 million units (MU) for FY 2016-17, bringing its cumulative shortfall to 2,049.614 MUs. MSEDCL had requested MERC to allow it to carry forward the solar shortfall and to meet all solar shortfall by March 2020. The reason for its unfulfillment was the Supreme Court which had halted trading of Solar Renewable Energy Certificates.

RPO is the single most important policy driving renewable energy installations in India toward achieving the aggressive goal of installing 175 GW by 2022, with solar comprising 100 GW of this portfolio.

The MNRE has created a compliance cell for RPOs. The cell will coordinate with states, the central electricity regulatory commission (CERC) and state electricity regulatory commissions (SERCs) to ensure RPO compliance. The cell will work with these institutions to create monthly reports on RPO compliance. It will also take up non-compliance issues with the appropriate authorities.