MERC Approves Tariff of Rs 2.90/kWh Discovered in 500 MW Solar Tender

• MERC has approved the tariff discovered by the MSEDCL for the procurement of 500 MW power from solar projects for meeting its Solar RPO.

The Maharashtra Electricity Regulatory Commission (MERC) in its latest order has approved the tariff discovered by the Maharashtra State Electricity Distribution Company (MSEDCL) for the long term procurement of 500 MW power from Intra-State solar power projects for meeting the Solar Renewable Purchase Obligations (RPO).

MSEDCL had filed the petition on December 26, 2019, making the following prayers:

1. To accord approval for adoption of tariff for 500 MW solar power as discovered through Competitive bidding and the same to be made eligible for meeting the Solar RPO requirement of MSEDCL.
2. To accord approval for the signing of PPA with successful bidders at discovered tariff.

In its case, the state Discom had submitted that it is trying to fulfill the shortfall in its Solar RPO target by way of purchase of solar Renewable Energy Certificates (REC). However, considering the existing shortfall and future RPO targets, it needs to procure additional renewable power for the fulfilment of its RPO targets.

In this regard, it had floated the tender on June 4, 2019, to procure 1000 MW solar power (Phase-III) on a long term basis from Inter/Intra-State Solar Power Projects through a competitive bidding process in line with the MoP guidelines dated August 3, 2017. However, due to no response to 1000 MW tender, MSEDCL canceled the tender and floated another tender on August 23, 2019, for procurement of 500 MW power.

However, the Discom did not get any response to this 500 MW solar tender as well. On similar lines, it had then floated a new tender to procure 500 MW Solar Power (Phase-IV) on a long term basis through the competitive bidding process to meet its RPO requirement on November 6, 2019.

After receiving bids for 650 MW capacity from two bidders, Maharashtra State Power Generation Co (MSPGCL) – 500 MW, and Juniper Green Energy – 150 MW, the Discom conducted the e-reverse auction on December 17, 2019, getting  the final results as follows:

Thus, the final rates discovered after the e-reverse auction for 500 MW Intra-State Solar Power Projects are Rs. 2.89 per unit and Rs. 2.90 per unit.

In support of the tariff discovered, the Discom had further submitted that in May-2019 the Solar Energy Corporation of India (SECI) had discovered tariff rates of Rs.2.87 to Rs.2.91 per unit in an auction conducted for the development of Dondaicha Solar Park in Maharashtra. And also, the state commission vide its order dated April 18, 2019, had approved a tariff of Rs.2.92 per unit for 50 MW Koudgaon Solar project of Maharashtra State Power Generation Company Ltd. (MSPGCL) in Maharashtra.

Considering the rates discovered for the projects to be set up in Maharashtra during this year, the  Discom state that the final tariff rates discovered by it in the 500 MW Intra-State solar tender after the e-reverse auction i.e. Rs. 2.89 per unit and Rs. 2.90 per unit are competitive rates.

In its findings, the commission stated that MSEDCL had conducted a transparent process of competitive bidding for procurement of Solar power and discovered Tariff of Rs 2.89 and Rs 2.90 per unit.

In its order, the MERC stated that “In view of above, the Commission opines that the discovered rate of Rs. 2.89 – 2.90 per unit is generally as per the existing market realities for the Solar Project being set up in Maharashtra. Further, in line with the mandate under Section 63 of the EA, the Commission deems it fit to adopt the tariff and approves discovered Tariff by MSEDCL for procurement of 500 MW of Solar power on a long term basis (for the period of 25 years) from grid-connected Solar projects for meeting its Solar RPO.”