The Maharashtra Electricity Regulatory Commission (MERC) has approved the tariff discovered by MSEDCL through the competitive bidding process and has allowed the procurement of 500 MW of solar power on a long-term basis.

The Commission has added that the solar power procured from these projects can be used for the fulfillment of Maharashtra State Electricity Distribution Company Limited’s (MSEDCL) solar renewable purchase obligation (RPO).

The MERC observed that the rate of ₹2.89 (~$0.040)/kWh and ₹2.90 (~$0.041)/kWh as discovered in the competitive bidding, is in line with the existing market trends.

In June 2019, MSEDCL had invited bids for 1,000 MW of solar power from inter/intra-state solar power projects with a ceiling tariff of ₹2.80 ($0.04)/kWh. However, due to poor response, the tender was canceled, and a new tender of 500 MW was floated again with the same tariff cap, which was also canceled later due to lack of response.

Subsequently, MSECL issued a new tender for the procurement of 500 MW of solar power on a long-term basis from intra-state solar power projects, raising the tariff cap to ₹2.90 (~$0.041)/kWh.

MSEDCL later clarified that an amendment dated October 22, 2019, was initially not incorporated in the tender document, but was subsequently incorporated after a pre-bid meeting on November 22, 2019. The last date for the submission of bids was initially November 30, 2019, but was later extended to December 12, 2019.

Maharashtra State Power Generation Company Limited and Juniper Green Energy Private Limited submitted bids for a cumulative capacity of 650 MW, and both the bidders were found to be technically qualified. The e-reverse auction was conducted, and the final tariffs discovered in the auction were ₹2.89 (~$0.040)/kWh and ₹2.90 (~$0.041)/kWh.

Through this procurement, MSEDCL is trying to fulfill its shortfall in solar RPO targets by purchasing solar renewable Energy Certificates (RECs) as its shortfall currently stands at 3,468 million units. In March 2019, MERC had noted the shortfall in RPO and had ordered MSEDCL to purchase solar power and renewable energy certificates by the end of March 2020 to fully meet its standalone and cumulative deficit of RPOs.

Recently, MSEDCL issued another tender for the long-term procurement of power from 500 MW of intra-state grid-connected solar power projects (Phase – V). The MSEDCL has set the ceiling tariff of ₹2.90 (~$0.041)/kWh for this tender. The last date for submission of responses to the RfS is January 28, 2020.

According to Mercom India Solar Project Tracker, Maharashtra has 1.6 GW of large-scale solar projects in operation, with 2 GW under development.