Maharastra Commission Gives Approval To BEST For 400MW Wind-Solar Hybrid Power Procurement From SECI But Partly Approve Solar & Non-Solar RPO Target Relief

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In a recent petition, Brihanmumbai Electric Supply and Transport Undertaking (BEST) seeks approval for procurement of 400MW Wind-Solar hybrid power from SECI at a fixed tariff rate INR 2.41/Kwh discovered through competitive bidding process with trading margin of INR 0.07/Kwh for 25 years.

Background

SECI initiated a tariff based competitive bid process for procurement of 1200MW of the power generated from the ISTS connected Wind-Solar Hybrid power projects (Tranche III) under the RFS issued by SECI dated 14 Jan 2020. Following three Hybrid Power Developers selected in the competitive bidding with lowest discovered tariff of INR 2.41/Kwh.

Sl No.Name Of The BidderTotal Quoted Capacity (MW)Capacity of Solar PV Component (MW)Capacity of Wind Component (MW)Declared CUF (%)Total Expected Generation (MUs)Declared Tariff (INR/Kwh)
1ABC Renewable Energy Pvt Ltd38038012641.711388.292.41
2Adani Renewable Energy Holding Eight Ltd60057020036.661927.12.41
3AMP Energy Green Pvt Ltd130112.544.142.5484.322.41
Total11101062.5370.13799.712.41

With due reference of the above discovered tariff for hybrid power, BEST seeks to procure 400MW Hybrid Wind-Solar Power from SECI on long term basis at a tariff rate of INR 2.48/Kwh with trading margin of INR0.07/Kwh for 25 years. Also BEST wants approval to consider the procurement of Hybrid power towards meeting the Solar RPO and Non-Solar RPO of BEST as follows.

To allow BEST to meet its Non-Solar RPO for FY 2020-21, FY 2021-22 and FY 2022-23 by procuring Non Solar RECs, and allow BEST to transfer the surplus solar energy up-to 15% of total RPO target for meeting the shortfall of Non-solar RPO from FY 2023-24 on wards as per MERC (RPO-REC) Regulation, 2019, allow BEST to carry forward the shortfall of Solar RPO of FY 2022-23 and to meet the same cumulatively in FY 2023-24, to allow to carry forward the surplus of solar RPO from FY 2023-24 onwards and to use the same to meet the solar RPO of respective next year.

Based on RPO target set by MERC till Fy 2024-25, BEST has computed capacity requirement for its solar and Non-solar RPO compliance (based on different CUF) as follows.

Period/TechnologySolar (MW)Non Solar (MW)
FY 2020-21 till FY 2024-2564 to 224186 to 194
FY 2025-26 till FY 2029-30290 to 455205 to 269

The expected generation from 400MW tie up of Wind Solar Hybrid Power on approx 40% CUF basis is as shown below.

Hybrid Power DevelopersTotal CapacitySolar PV component (MW)Wind Component (MW)CUF (%)Energy (MU)% of Plant Contribution
ABC Renewable Energy Pvt Ltd38038012641.711388.2934.23
Adani Renewable60057020036.661927.154.05
AMP Energy Green Pvt Ltd130112.544.142.5484.3211.71
Total111010633703799.71MW
BEST’s Share in MWExpected Generation
400SolarWindSolar (MU)Wind (MU)
136.94102.8434.1348.91151.38
216.22160.0656.16473.51220.97
46.8533.6513.19126.348.23
400296.55103.45948420.58
Total Generation1371 MU

From this above table it is observed that BEST can meet its solar and non-solar RPO target upto FY 2028-29 by tying up 400MW from SECI’s proposed 1110MW Solar Wind Hybrid project.

For successful tariff adoption, at first BEST will sign PSA with SECI for procurement for 400MW hybrid power for a period of 25 years from the SCD (Schedule Commissioning Date) at fixed tariff rate INR 2.41/Kwh plus trading margin of INR 0.07/Kwh. Only after PSA signed SECI will sign PPA with successful developer.

Commission’s Analysis & Ruling

a. Quantum of power procurement to be allowed to BEST

MERC’s renewable energy projection for BEST for FY 2020-21 to FY 2024-25 so as to comply with RPO targets stipulated in MERC RPO regulations 2019 as given below.

SourceFY 2020-21FY 2021-22FY 2022-23FY 2023-24FY 2024-25
Solar Energy (MU)192258348462600
Non-Solar Energy (MU)490495500506511
Total Renewable Energy (MU)6827538489681111

Keeping in mind BEST’s analysis of procuring 1371MU renewable energy annually from 400MW hybrid plant with 40% CUF and RE requirement for FY 2023-24 of 968MU; proposed 400MW hybrid power procurement is much more than the requirement. Also power flow from proposed hybrid projects is expected to start from Fy 2023-24 onwards. However, discovered tariff of INR 2.48/Kwh (including trading margin) is most competitive with respect to other sources of power and such excess power from hybrid source would only help BEST to reduce its power procurement cost and meet its RPO targets. Thus commission approves BEST’s proposal of contracting 400MW power from wind solar hybrid project.

b. Other relief sought by BEST in terms of RPO compliance

BEST has submitted that it shall meet its solar and non-solar RPO for FY 2020-21 and FY 2021-22 by procuring solar and non-solar RECs. Further for FY 2022-23 for non solar category, it has proposed to meet RPO by providing non solar RECs. BEST has further proposed to carry forward shortfall/ surplus of solar RPO from FY 2022-23 onward to the next years and to transfer the surplus solar energy upto 15% of total RPO target for meeting the shortfall of non-solar RPO from FY 2023-24 onward as per MERC regulation, 2019.

In this regard, the commission is of the view that any penalty or incentive relative to achieving the RPO targets shall be dealt with at the time of RPO verification process of the obligated entities. Thus the relief sought in RPO target are premature. Commission has ordered BEST shall take all efforts to fulfill its RPO including procurement of REC at regular intervals so as to avoid peak pricing in the power exchange. Also commission acknowledge the REC trading has been halted by APTEL for quite a long time and hence utilities are facing difficulties in procurement of RECs.

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