The Maharashtra Electricity Regulatory Commission (MERC) has approved the Maharashtra State Electricity Distribution Company’s (MSEDCL) proposal to procure 1,600 MW of solar power from NTPC’s projects.

The Commission adopted the discovered tariff, ranging from ₹2.66 (~$0.030) to ₹2.72 (~$0.031)/kWh, along with a trading margin of ₹0.07 (~$0.00079)/kWh, for a 25-year power supply agreement (PSA) term.

The power procured under this arrangement will be eligible to meet MSEDCL’s Renewable Purchase Obligation (RPO).

Background

MSEDCL approached MERC seeking adoption of the tariff following a competitive bidding process conducted by NTPC in 2023. It submitted that rising RPO targets under the MERC (Renewable Purchase Obligation) Regulations, 2019, as amended in February 2024, necessitated substantial additional solar capacity to ensure future compliance.

MSEDCL had contracted more than 25.5 GW of renewable energy capacity, of which approximately 10.4 GW had been commissioned. However, it stated that further long-term procurement was required to meet upcoming RPO obligations.

NTPC had sought MSEDCL’s consent to procure solar power from interstate transmission system (ISTS)-connected projects. Four power sale agreements aggregating 1,600 MW were executed between MSEDCL and NTPC for projects awarded to Anboto Solar, Apraava Energy, Avaada Suryapower, and JSW Renew Energy.

MSEDCL argued that the discovered tariffs were significantly lower than its average power purchase cost of ₹4.82 (~$0.054)/kWh for FY 2023–24.

NTPC supported the petition, stating that the bidding process complied with the applicable competitive bidding guidelines and that the tariffs had already been adopted by the Central Electricity Regulatory Commission (CERC).

Commission’s Analysis

The Commission examined four key aspects of the petition: the quantum of procurement, competitiveness of the tariff, the applicable trading margin, and the proposed utilization of the solar power.

On the quantum, MERC held that procurement of 1,600 MW was justified as it had already been considered in MSEDCL’s Resource Adequacy Plan and was aligned with projections in the Central Electricity Authority’s resource adequacy study.

With respect to tariff competitiveness, MERC observed that NTPC had followed a transparent and competitive bidding process and that CERC had already adopted the tariff.

On the trading margin of ₹0.07 (~$0.00079)/kWh, the Commission held that it was consistent with the Competitive Bidding Guidelines, 2023, and the CERC Trading License Regulations, 2020.

MERC noted MSEDCL’s plans to deploy battery energy storage systems and pumped storage projects to manage surplus solar generation and improve grid reliability.

Based on its analysis, the Commission allowed the petition in full and approved the long-term procurement of 1,600 MW of solar power from NTPC at the discovered tariffs.

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