The Maharashtra Electricity Regulatory Commission (MERC) has approved the Maharashtra State Electricity Distribution Company’s (MSEDCL) proposal for long-term procurement of 2,500 MW of round-the-clock renewable energy.

The Commission adopted a tariff of ₹5.90 (~$0.06)/kWh and directed MSEDCL to submit the final signed power purchase agreement.

Background

MSEDCL had sought approval for the procurement to meet its resource adequacy requirements, ensure a stable round-the-clock power supply to consumers, and optimize the scheduling of surplus solar power.

The distribution company also submitted that demand for round-the-clock green power with traceability from data centers and semiconductor industries in Maharashtra is increasing.

MERC had earlier approved MSEDCL’s proposal to initiate the bidding process for the 2,500 MW procurement and approved deviations from the applicable bidding guidelines. It had also directed MSEDCL to approach the Commission for tariff adoption after the completion of the bidding process.

The tender was issued in January, 2026. Four bidders participated in the tender. Adani Power quoted for the entire 2,500 MW capacity, while Lalitpur Power Generation Company, MB Power (Madhya Pradesh), and Sterlite Grid 42 each quoted 1,250 MW. The aggregate offered capacity was 6,250 MW against the tendered capacity of 2,500 MW.

All four bidders were found technically qualified. The initial financial bids were ₹6.30 (~$0.07)/kWh by Adani Power, ₹6.34 (~$0.07)/kWh by Lalitpur Power Generation Company, ₹6.48 (~$0.07)/kWh by MB Power, and ₹9.50 (~$0.10)/kWh by Sterlite Grid 42.

After the electronic reverse auction, Adani Power emerged as the lowest bidder with a tariff of ₹5.90/kWh. Lalitpur Power Generation Company quoted ₹5.91 (~$0.06)/kWh, MB Power quoted ₹6.19 (~$0.07)/kWh, and Sterlite Grid 42 remained at ₹9.50/kWh.

Commission’s Analysis

MERC examined whether the competitive bidding process was conducted in accordance with the guidelines notified under Section 63 of the Electricity Act and whether the discovered tariff was market reflective.

It held that the process was fair, transparent, competitive, and substantially in accordance with Section 63 of the Electricity Act, the applicable round-the-clock power procurement guidelines, and the bidding documents approved by the Commission.

On tariff reasonableness, MERC noted that the procurement structure was unique in requiring firm round-the-clock supply, minimum monthly and annual capacity utilization levels, peak-hour supply obligations, 51% traceable renewable energy content, and stringent penalties for non-performance.

The Commission also noted MSEDCL’s submission that the procurement was a first-of-its-kind supply-based round-the-clock tender, making direct comparison with conventional renewable energy tariffs unsuitable.

MSEDCL compared the discovered tariff with recent long-term thermal power procurement processes, where levelized tariffs ranged from ₹6.31 (~$0.07)/kWh to ₹8.90 (~$0.09)/kWh. The ₹5.90/kWh tariff was lower than these benchmarks and ensured that at least 51% of the energy was traceable to renewable sources.

MERC held that the substantial oversubscription of the tender, participation by multiple established market players, the successful conduct of the reverse auction, and comparison with alternative sources of firm power showed that the tariff was market-reflective.

The Commission said the tariff was reasonable and in the overall interest of consumers.

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