Maharashtra to Procure 500 MW of Wind Energy with a Tariff Cap of ₹2.95/kWh

MSEDCL will enter into long term power purchase agreements with wind project developers to meet its renewable purchase obligation

September 3, 2019


The Maharashtra State Electricity Distribution Company Limited (MSEDCL) has issued a tender to procure 500 MW of wind power through a competitive bidding process. The distribution company intends to meet its non-solar renewable purchase obligation (RPO) by buying wind power under a long term power purchase agreement (PPA) of 25 years.

Projects that are eligible for MSEDCL to procure power should be grid-connected interstate and intrastate (new or existing) with or without repowering whose PPA with MSEDCL has expired. Intrastate projects with or without repowering having valid PPA at feed-in-tariff or preferential tariff will also be eligible. Intrastate projects which have already been commissioned but do not have any long term PPA with any agency and selling power on short term or merchant plant basis will be considered under this tender, in case these projects are not already accepted under any other central or state government schemes and do not have any obligations towards existing buyers.

For intrastate projects, bidders would be eligible to bid for a minimum capacity of 25 MW with each project of 5 MW each. For interstate projects, bidders are allowed to bid for a minimum capacity of 50 MW with each project of 5 MW each. Successful bidders are expected to set up the wind power project including the transmission and distribution network up to the delivery point at their own costs (this will include open access charges).

Ceiling tariff for bids has been set at ₹2.95/kWh ($0.041).

Projects are to be commissioned within 18 months of PPA signing. The earnest money deposit (EMD) for bidders has been set at ₹1 million/MW ($13,873).

The last date for submission of bids is September 26, 2019.

In July, MSEDCL has received the approval it sought from the Maharashtra Electricity Regulatory Commission (MERC) for deviations in the standard bidding document for the long-term procurement of 500 MW of wind power. The approval was sought for wind projects for which the energy purchase agreements (EPAs) had expired or are about to expire in FY 2019-20. In April, the state commission had directed MSEDCL to procure wind power through the competitive bidding route from wind power projects whose EPAs with MSEDCL had expired.

Currently, Maharashtra is facing a shortfall in the achievement of non-solar RPO targets, and after the expiry of the existing wind EPAs, it would have a further shortfall in meeting its non-solar target. This required the procurement of additional non-solar renewable energy certificates (RECs).

The MSEDCL is facing a dual problem of inadequate quantities of RECs available in the market and RECs traded at rates much higher than the floor prices on the one hand, and wind generators trying to sell power through open access to consumers of MSEDCL and Mumbai utilities on the other hand.

With the increasing targets of RPOs, MSEDCL had to contract enough non-solar power through long-term contracts.  Earlier, it had attempted to procure wind power through a competitive bidding process at the ceiling rate of ₹1.97 ($ 0.02)/kWh, but no response was received from the bidders.

Later, the MSEDCL decided to conduct the bidding process for the procurement of 500 MW of power from wind generators with a ceiling tariff of  ₹2.52 ($0.036)/kWh for the period of available useful life or eight years for those whose EPAs had expired or are going to expire in FY 2019-20.

Maharashtra has also been facing allegations of delayed payments to wind generators. In May, MERC had reprimanded MSEDCL for the continued delay in meeting payment obligations to independent power producers, including delayed payment charge, and for disregarding the previous orders of the commission.

Shaurya is a staff reporter at with experience working in the Indian solar energy industry for the past four years in various roles. Prior to joining Mercom, Shaurya worked with a renewable energy developer and a consulting company. Shaurya holds a Bachelors Degree in Business Management from Lancaster University in the United Kingdom.