MERC Approves PPAs for Solar Projects Totaling 235 MW in Maharashtra

Projects are being developed under Mukhyamantri Saur Krishi Vahini Yojana

November 28, 2018


The Maharashtra Electricity Regulatory Commission (MERC) has approved power purchase agreements (PPAs) for grid-connected solar photovoltaic (PV) projects totaling 235 MW.

MERC reviewed a petition filed by Maharashtra State Electricity Distribution Company Limited (MSEDCL) regarding approval for the long-term procurement of 235 MW of solar power under Mukhyamantri Saur Krishi Vahini Yojana with a set of 2 to 10 MW capacity projects connected in order to meet MSEDCL’s solar Renewable Purchase Obligation (RPO).

In April 2018, MSEDCL tendered 1 GW of solar PV projects to be developed under the Mukhyamantri Saur Krishi Vahini Yojana. During financial bid, MSEDCL received bids for 285 MW of cumulative solar capacity and rates ranged from ₹3.09 (~$0.044)/kWh to ₹3.30 ($0.047)/kWh.

MSEDCL later negotiated with the bidders to reduce their tariff rates. As a result, bidders submitted a revised tariff rate of ₹3.15/kWh. MSEDCL found the rates quoted by the bidders up to ₹3.15/kWh at 11 kV level to be financially viable and economical along with the benefits of distributed generation, and approved the submission. The weighted average of the tariff is now ₹3.13 (~$0.044)/kWh.

Upon  query  about  increase  in the tariff  rate  as  against  approved  by  MERC of ₹2.72 (~$0.038)/kWh, MSEDCL stated  that  the  reason  for  increase  in  tariff  from  ₹2.72 (~$0.038)/kWh  to  ₹3.13 (~$0.044)/kWh  is because  of  the   geographic  spread   and  smaller  size  of  the projects.  Secondly,   the  earlier  rates  were  at  the  distribution  periphery  and  exclude  the transmission and distribution  losses  up to  11 kV  level.  Lastly, all the solar projects would be located within the state with social benefits although with minimal additional cost.

Procurement of Long Term Solar Power 235 MW Through Competitive BiddingWhile examining the submission made by MSEDCL, MERC noted that the due process for the procurement of solar power had been followed by the DISCOM, and that the submitted tariff rates are within the range of the previously approved tariff rates by MERC, considering the transmission and distribution losses, project size and the geographic spread.

MERC opined that the submitted rates were competitively obtained and were twice negotiated, and also stated that the solar power procured from these projects will count towards the fulfilment of MSEDCL’s solar RPO.

Recently, MERC approved the initiation of a district (circle) wise competitive bidding process for the procurement of solar power under Mukhyamantri Saur Krishi Vahini Yojana. MERC approved the ceiling rate of ₹3.10 (~$0.044)/kWh, an increase in the maximum capacity limit from 50 MW to 100 MW for each district.

Image Credit: Tata Power Solar