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MERC Clears Tariffs for Tata Power’s 250 MW Firm and Dispatchable Renewable Energy Projects

The Maharashtra Electricity Regulatory Commission (MERC) has approved tariffs in the range of Rs4.43/kWh to Rs4.77/kWh for Tata Power Company Limited’s 250 MW firm and dispatchable renewable energy (FDRE) projects backed by energy storage systems.

MERC also directed that electricity procured from these FDRE projects will be treated as eligible for meeting Tata Power’s renewable purchase obligation (RPO). The utility has been instructed to execute the power purchase agreements (PPAs) within 30 days.

Project Background and Bidding Process

As part of its long-term power procurement plan, Tata Power proposed to source electricity from FDRE projects in FY 2028 to support load balancing and optimize power procurement costs.

Accordingly, Tata Power issued a tender to procure 250 MW of FDRE capacity, which attracted bids from six developers offering a total of 560 MW. Of these, five bidders qualified for the financial bid stage.

During the technical evaluation, the Ministry of New and Renewable Energy (MNRE) issued an office memorandum mandating compliance with the Approved List of Models and Manufacturers (ALMM) for modules and cells. Since this requirement was notified after the bid submission deadline, ALMM compliance was enforced only for modules in this tender.

In view of the policy change, Tata Power invited bidders to rework and submit revised price offers, following which lower tariffs were discovered.

Tariff Evaluation Methodology

Tata Power stated that tariff evaluation was carried out at the Maharashtra State Transmission Utility periphery. For projects located outside Maharashtra, an additional Rs0.33/kWh was added to the quoted tariff to account for inter-state and intra-state transmission charges, enabling a uniform comparison with intrastate projects.

The utility clarified that this Rs0.33/kWh adjustment was applied only for evaluation purposes and would be deducted at the time of tariff award.

Awards to Successful Bidders

Based on the bidding outcome, Tata Power issued Letters of Award (LoAs) as follows:

• Juniper Green Energy: 70 MW at Rs4.76/kWh

• Navayuga Engineering Company (NECL): 50 MW at Rs4.76/kWh

• ACME Solar Holdings: 50 MW at Rs4.76/kWh

• Tata Power Renewable Energy: 80 MW at Rs4.77/kWh

The DISCOM subsequently approached MERC for approval of the discovered tariffs and the corresponding PPAs.

Commission’s Observations and Decision

MERC observed that the tariffs were discovered through a transparent and competitive bidding process. After accounting for transmission charges and losses of Rs0.33/kWh, the Commission noted that landed tariffs for FDRE projects ranged from Rs4.58/kWh to Rs8.83/kWh, placing the discovered tariffs well within a reasonable range.

The Commission further noted that the approved tariffs are lower than Tata Power’s existing long-term power procurement costs, indicating potential savings for the DISCOM.

Accordingly, MERC approved tariffs in the range of Rs4.43/kWh to Rs4.77/kWh, finding them consistent with prevailing market conditions.

NECL Tariff Adjustment Issue

The Commission also took note of NECL’s decision to shift its project from an inter-state transmission system (ISTS) configuration to an intrastate (InSTS) project, and its request to restore the tariff to Rs4.76/kWh following the deduction of Rs0.33/kWh.

MERC ruled that NECL and Tata Power must mutually resolve any tariff implications arising from this change, in accordance with the tender terms and bidding guidelines.