MERC Clears Tariff for Adani Electricity’s 750 MW Renewable Power Procurement

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					</table>The Maharashtra Electricity Regulatory Commission (<a href="https://merc.gov.in/" target="_blank" rel="noopener">MERC</a>) has adopted a weighted-average levelized tariff of ₹6.38 (~$0.066)/kWh for procuring 750 MW of round-the-clock (RTC) power from grid-connected renewable energy projects, complemented by power from other sources.
The procurement will be undertaken by Adani Electricity Mumbai Distribution (AEML D) under a 10-year power purchase agreement with Powerpulse Trading Solutions.
MERC also directed AEML D to submit the executed power purchase agreement with Powerpulse Trading Solutions after its execution.
Background 
AEML D filed the petition seeking adoption of the tariff discovered through a tariff-based competitive bidding process for procuring 750 MW of RTC renewable power to meet its future electricity demand and renewable purchase obligation (RPO) requirements.
MERC had earlier permitted AEML D to initiate competitive bidding for RTC renewable power with specific <a href="https://www.mercomindia.com/merc-allows-deviations-in-adani-electricitys-1-gw-rtc-power-procurement?" target="_blank" rel="noopener">deviations</a> from the standard bidding documents, including changing the delivery point to the Maharashtra State Transmission Utility periphery, deleting the payment security fund requirement, permitting the variable fuel component to be quoted on the bid submission date, and reducing the power purchase agreement term from 25 years to 10 years.
These changes were approved after an earlier tender failed to attract bidders due to concerns about the shorter contract duration, stringent availability requirements, and mandatory renewable energy supply conditions.
Following the revised bidding process, AEML D <a href="https://www.mercomindia.com/adani-bids-1-5-gw-round-the-clock-power?" target="_blank" rel="noopener">invited</a> bids for 1,500 MW, comprising 750 MW, with an equivalent greenshoe option.
Four companies submitted bids totaling 1,500 MW. Powerpulse Trading Solutions offered 750 MW, while JSW Neo Energy, MB Power (Madhya Pradesh), and Goldi Solar each offered 250 MW. After technical evaluation, all four bidders qualified for the financial bid stage.
An electronic reverse auction resulted in final tariffs of ₹6.38 (~$0.066)/kWh for Powerpulse Trading Solutions, ₹6.39 (~$0.066)/kWh for JSW Neo Energy, ₹6.40 (~$0.066)/kWh for MB Power, and ₹6.56 (~$0.068)/kWh for Goldi Solar.
Powerpulse emerged as the successful bidder with the lowest tariff.
The tariff proposed by Powerpulse comprised a fixed renewable component of ₹5.25 (~$0.055)/kWh and a fixed non-renewable component of ₹4.18 (~$0.043)/kWh, along with escalable components for fuel and transportation.
The company proposed supplying the contracted power through solar projects at Khavda in Gujarat, wind projects at Bhuj in Gujarat, and thermal generation from Maharashtra.
It informed AEML D that maintaining the contractual obligation of 80% annual and peak availability, together with a minimum renewable share of 51%, would require installing approximately 775 MW of solar capacity, 300 MW of wind capacity, and 540 MW of thermal capacity for balancing.
After the auction, AEML D sought a reduction in the discovered tariff. Powerpulse declined, citing the significant investments required to meet the stringent supply obligations.
Based on the evaluation committee&#8217;s recommendation, AEML D issued the letter of award to the company in August 2025 and sought tariff adoption from the Commission. It argued that the procurement would reduce its dependence on volatile short-term power markets while ensuring long-term compliance with RPO requirements.
During the proceedings, AEML-D also filed additional submissions comparing its tender with recent long-term thermal tenders floated by Assam and Bihar distribution companies. It argued that although those procurements resulted in tariffs ranging from ₹6.075 (~$0.063)/kWh to ₹6.80 (~$0.071)/kWh, they did not require suppliers to provide at least 51% renewable energy or assume renewable generation variability risk.
The utility also compared its procurement with MSEDCL&#8217;s pumped storage and battery energy storage tenders, stating that those procurements resulted in effective energy costs exceeding ₹10 (~$0.104)/kWh and therefore did not represent appropriate benchmarks for comparison.
Subsequently, AEML D informed the Commission that it had sought clarification from Powerpulse after learning that the company had also participated in MSEDCL&#8217;s medium term procurement process using the same proposed thermal source.
In response, Powerpulse confirmed that, if required, it would supply balancing power from either Vidarbha Industries Power or Mahan Energen Unit 2, in accordance with the alternate-source provisions contained in the draft power purchase agreement. A
AEML D requested the Commission to expedite tariff adoption to avoid delays in project implementation and renewable procurement.
Commission&#8217;s Analysis
The Commission found that AEML D had conducted the procurement in accordance with the Ministry of Power&#8217;s 2020 guidelines for RTC renewable energy procurement. The Commission noted that the bidding documents incorporated the deviations it had previously approved, pre-bid meetings were held, clarifications were issued, adequate time was provided for bid submission, and four bidders participated, indicating sufficient competition.
It observed that although AEML D had initially compared its procurement with recent thermal tenders, a more appropriate benchmark had become available after MSEDCL concluded its own 2,500 MW RTC renewable tender. In that procurement, MERC had adopted a tariff of ₹5.90 (~$0.061)/kWh under a 25-year power purchase agreement.
However, the Commission noted an important distinction between the two procurements. MSEDCL&#8217;s tariff was quoted at the Central Transmission Utility periphery, requiring the procurer to bear interstate transmission charges and transmission losses.
MERC estimated these additional costs at approximately ₹0.56 (~$0.006)/kWh, comprising ₹0.35 (~$0.004)/kWh toward interstate transmission charges and ₹0.21 (~$0.002)/kWh toward transmission losses. As a result, MSEDCL&#8217;s effective delivered tariff at the Maharashtra periphery would be approximately ₹6.46 (~$0.067)/kWh.
By comparison, AEML D&#8217;s tariff of ₹6.38 (~$0.066)/kWh was quoted directly at the Maharashtra periphery, with the supplier bearing all interstate transmission charges, losses, and associated risks. The Commission therefore held that the AEML D tariff compared favorably with the effective cost of MSEDCL&#8217;s procurement and was competitive and reflective of prevailing market conditions.
It also accepted AEML D&#8217;s explanation regarding Powerpulse&#8217;s use of alternative thermal sources. It observed that Article 4.11 of the draft power purchase agreement expressly permits the supplier to procure power from an alternate generation source while continuing to bear any additional transmission or incidental charges.
MERC held that this contractual provision provided reasonable assurance that the supplier would continue to meet its obligations under the agreement.
Concluding that the bidding process was transparent, competitive, and compliant with the statutory guidelines, and that the tariff was reasonable and in the overall interest of consumers, MERC adopted the weighted average levelized tariff of ₹6.38 (~$0.066)/kWh for the procurement of 750 MW of RTC renewable power for a period of 10 years from Powerpulse Trading Solutions.
It also directed AEML D to submit the executed power purchase agreement to the Commission.
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