MSEDCL to Buy Wind Power from Projects with Expired Agreements Through Reverse Auction

Wind projects under groups II, III and IV, will be eligible

April 11, 2019


Maharashtra Electricity Regulatory Commission (MERC) has asked the Maharashtra State Electricity Distribution Company Limited (MSEDCL) to procure wind energy from projects whose energy purchase agreements (EPAs) have expired, to fulfill its non-solar renewable purchase obligation (RPO).

The MERC was going through submissions made for a petition filed by MSEDCL seeking its approval to procure power from wind projects whose EPAs have expired. In the petition, MSEDCL had asked the commission to allow it to procure power from the wind generators of group II, III, and IV whose EPAs with MSEDCL have expired at the tariff of ₹2.52 (~ $0.036)/kWh for its balance of useful life. It had also requested that these power procurements be counted towards the fulfillment of renewable purchase obligation (RPO) of MSEDCL.

MSEDCL had submitted this request as it could not attract the interest of bidders when it had floated a tender for procuring power from such wind projects keeping ceiling tariff at ₹1.97 (~$0.028)/kWh. The ceiling tariff had been set by the MERC.

While going through the submissions made by MSEDCL, MERC was of the view that wind power generators with expired EPA’s are free to sell the energy they produce to any buyer including MSEDCL. It said, the same generators also have the option of selling wind energy to MSEDCL under short-term route at a higher rate of ₹2.25 (~$0.032)/₹2.52 (~$0.036)/kWh.

MERC has said that MSEDCL should set a ceiling rate after proper due diligence on their end and float the tender for procuring energy for a period more than one year from wind generators whose EPAs have expired. Competitiveness of the rate discovered will be dealt with by the commission during the tariff adoption process.

The ceiling tariff set by MSEDCL for such an auction should not be less than the tariff set by MERC for short-term procurement; ₹2.25 (~$0.032)/₹2.52 (~$0.036)/kWh. The ceiling tariff for Group I wind projects without EPA cannot be more than ₹2.25 (~$0.032), and ceiling tariff for Group II, III and IV wind projects without EPA should not be more than ₹2.52 (~$0.036)/kWh.

India installed 2.2 GW of wind in 2018 according to a GWEC report.