Qualified Coordinating Agencies in Maharashtra Asked to Pay ₹25,000/MW for Solar Projects

The agencies will have to shell out ₹50,000/MW for wind projects


In Maharashtra, qualified coordinating agencies (QCAs) for meter reading, data collection and communication have been asked to deposit ₹25,000 (~$357.6)/MW for solar and ₹50,000 (~$715.6)/MW for wind projects.

This comes as part of Maharashtra Electricity Regulatory Commission’s (MERC) new order that has fixed the amount to be deposited by the agencies for payment security mechanism. These charges will apply to those appointed by project developers to develop interstate transmission system (ISTS)-connected solar and wind projects.

According to the new order, “After successful registration of an agency, it will be the agency’s responsibility to deposit the corpus to ensure payment security mechanism. The amount will be ₹25,000/MW for solar PV and ₹50,000/MW for wind. This should be done within two weeks of registration.”

Qualified Coordinating Agencies in Maharashtra Asked to Pay ₹25,000/MW for Solar Projects

In case there is an insufficient amount of funds, then the agency will make up for it within seven days of being informed by the Maharashtra State Load Dispatch Centre (MSLDC). Non-payment of corpus will result in non-scheduling of the generation capacity, according to the MERC.

While this is what the state commission has to offer, project developers, on the other hand, have raised concerns regarding such hefty amounts being demanded. When contacted, a renewable energy project developer said, “There are issues with this order. Firstly, this wasn’t brought up for comments and suggestions when draft forecasting and scheduling regulations were up for discussion. Secondly, QCA which has no authority, has been asked by the MERC to act as a load dispatch center. This is one of the most bizarre procedures any state electricity regulation (SERC) could have come up with.”

The developer also added that by fixing such charges, the MERC is in a way pointing towards refraining from scheduling and re-scheduling. “Imagine the tariff has gone below ₹3 (~$0.04)/kWh and we must now pay charges in excess of ₹0.50 (~$0.04)/kWh for solar that only generates for 8 hours in a day. The whole point of scheduling and forecasting regulations is to ensure grid-stability not to levy charges,” he said.

Maharashtra is one of the worst performers when it comes to meeting renewable purchase obligation (RPO) and these new added costs will inhibit large-scale project development.

When contacted, an MERC official said, “This is only for ISTS-connected solar and wind projects and not for other projects being developed in the state under programs like Mukhyamantri Krushi Vahini Yojana. The cost is not that high as these projects will evacuate power mostly to other states and the QCA is a developer or any entity selected by developer, so they will end up making profits. On top of everything, I would like to say that, this money that the QCA will deposit will be only going to the payment security fund, which in turn is for the developers in case of any contingencies.”

Another stakeholder commented, “The procedure is quite funny at multiple levels. It also wants the QCA to act like a system operator who would have to control injection at the behest of SLDC. You can’t change a QCA for two years, requirements for being QCA are also quite stringent. The public hearing on this case was anyway on draft regulation, the procedure was not even discussed or put up for comments.”

In July 2018, the MERC had issued final regulations for the forecasting, scheduling, and deviation settlement for solar and wind power generation in the state.

Image credit: Cleantech Solar