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MERC Clears MSEDCL’s 1.6 GW Solar Power Procurement from NTPC Projects

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

The Commission adopted the discovered tariffs in the range of Rs2.66/kWh to Rs2.72/kWh, along with a trading margin of Rs0.07/kWh, for a 25-year power supply agreement (PSA). Electricity procured under this arrangement will be eligible for meeting MSEDCL’s Renewable Purchase Obligation (RPO).

Background to the Petition

MSEDCL approached MERC seeking tariff adoption following a competitive bidding process conducted by NTPC in 2023. The utility stated that increasing RPO targets under the MERC (Renewable Purchase Obligation) Regulations, 2019, as amended in February 2024, required additional long-term solar capacity to ensure future compliance.

While MSEDCL has contracted over 25.5 GW of renewable energy capacity, of which around 10.4 GW has been commissioned, it emphasized the need for further long-term procurement to meet upcoming RPO requirements.

Project Details and Tariff Comparison

NTPC had sought MSEDCL’s consent to procure power from interstate transmission system (ISTS)-connected solar projects. Accordingly, four power sale agreements totaling 1,600 MW were executed between MSEDCL and NTPC for projects awarded to:

• Anboto Solar

• Apraava Energy

• Avaada Suryapower

• JSW Renew Energy

MSEDCL highlighted that the discovered tariffs were significantly lower than its average power purchase cost of Rs4.82/kWh for FY 2023–24, underscoring the cost advantage of the procurement.

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

Commission’s Findings

MERC examined four key aspects: procurement quantum, tariff competitiveness, trading margin, and power utilization.

• Procurement Volume: The Commission held that the 1,600 MW capacity was justified, as it had already been factored into MSEDCL’s Resource Adequacy Plan and aligned with projections in the Central Electricity Authority’s resource adequacy study.

• Tariff Discovery: MERC observed that NTPC followed a transparent and competitive bidding process, and noted that the tariff had already received CERC’s approval.

• Trading Margin: The approved Rs0.07/kWh trading margin was found to be consistent with the Competitive Bidding Guidelines, 2023, and the CERC Trading License Regulations, 2020.

The Commission also took note of MSEDCL’s plans to deploy battery energy storage systems and pumped storage projects to manage surplus solar generation and enhance grid reliability.

Final Decision

Based on its analysis, MERC allowed the petition in full, approving MSEDCL’s long-term procurement of 1.6 GW of solar power at the discovered tariffs and trading margin.