Maharashtra Will No Longer Set Generic Tariffs for Renewables

The regulations are effective from April 1, 2020


The Maharashtra Electricity Regulatory Commission (MERC), going forward, will determine tariffs for wind, solar, non-fossil fuels-based co-generation, biomass-based, and hybrid renewable power projects only through a transparent process of competitive bidding.

The Commission said that it would only adopt rates discovered this way and would no longer come up with generic tariffs.

The scope of determination of generic tariff under the new ‘Renewable Energy Tariff Regulations, 2019’ would be limited to the notification of generic tariffs for solar rooftop projects and the determination of variable charge for biomass and non-fossil-based co-generation projects.

MERC said that generic tariffs would apply to solar rooftop projects which are not eligible to participate in competitive bidding. In these cases, the tariff will be set based on the latest tariff discovered through competitive bidding by the concerned distribution licensee, any other distribution licensee in the state, or anywhere in the country for similar projects that have been adopted by the appropriate commissions.

The Commission noted that the process of establishing tariffs for solar rooftop projects is not dealt with in the new regulations and that they only include the notification of tariff.

For setting variable charges for biomass and non-fossil fuel-based co-generation projects, the regulations only cover the tariff determination for existing projects whose energy purchase agreements (EPAs) have been signed based on generic tariffs determined by the MERC in the past.

Additionally, the Commission extended existing variable charges for biomass and non-fossil fuel-based co-generation projects as determined under Renewable Energy Tariff Order Dated April 30, 2019, on a provisional basis until the Commission determines the variable costs for these projects based on fuel cost arrived through independent studies.

It has set the provisional charges applicable for the financial year 2020-21 to the existing projects whose EPAs were signed based on the generic tariffs determined by the Commission earlier. For biomass-based renewable energy projects, the Commission has set the variable charges at ₹5.55 (~$0.072)/kWh, and for non-fossil fuel-based co-generation projects, variable charges were set at ₹4.38 (~$0.057)/kWh.

The Commission declared that the tariffs notified in this order would be applicable for FY 2020-21, with effect from April 1, 2020.

Previously, MERC declared in an order that the generic tariff fixed by the Commission in cases where competitive bidding is also permissible should act as the ceiling tariff for guiding the competitive bidding process.

Recently, Mercom reported that the Central Electricity Regulatory Commission (CERC) extended the applicability of the Renewable Energy Tariff Regulations, 2017, for three months (from April 01, 2020, to June 30, 2020). It noted that the generic tariff issued by the Commission in the order dated March 19, 2019, will continue to remain in force until June 30, 2020.