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Maharashtra Commission Approves Revised Tariff Of Rs.2.56/Kwh For 300MW Wind-Solar Hybrid Project

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growatt01-08-2022

Recently, Maharashtra Electricity Regulatory Commission (MERC) approved revised tariff of Rs.2.56/Kwh to M/S T.P. Saurya Ltd, an subsidiary of Tata Power, for 300MW wind-solar hybrid power project. The RE (renewable energy) hybrid power will be sold to Maharashtra State Electricity Distribution Company Ltd (MSEDCL) for entire 25 years duration. Commission also directed MSEDCL & T.P. Saurya Ltd (TPSL) to enter into a power purchase agreement (PPA) within 15 days of the notification of this order.

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Background

On the basis of MNRE’s guidelines for tariff based competitive bidding process for procurement of power from grid connected wind-solar hybrid projects, MSEDCL issued request for selection (RfS) for procurement of 500MW hybrid power on long term basis from grid connected intra and inter state projects by using intra and inter-state transmission system. After competitive bidding process and subsequent e-reverse auction, T.P. Saurya Ltd and Azure Power Pvt Ltd emerged as L-1 bidder at a tariff rate of Rs.2.62/Kwh. In view of the above context, on March 2022, commission disallowed the adoption of tariff rate Rs.2.62/Kwh and proposed tariff rate of Rs.2.49/Kwh to the L1-bidder. Commission disallowed the higher tariff rate due to availability of cheaper hybrid power from Solar Energy Corporation Of India Ltd (SECI).

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Challenging the reduction of tariff rate to Rs.2.49/Kwh, TPSL filed the petition to the commission for revision of tariff rate to Rs.2.56/Kwh due to recent high inflation in steel prices. Steel is a major component in solar PV module manufacturing as well as for wind turbine manufacturing.

The cost implication on total project cost due to steep rise in steel price from July 2021 to March 2022, is given below.

Solar EPC Cost = 51% of hybrid project cost.

Particulars% increase from July 2021 to March 2022% Contribution in Solar EPC% increase in total hybrid project cost
Steel18.94%26.17%2.46%
Wind EPC = 35% of hybrid project cost
Particulars% increase from July 2021 to March 2022% Of WTG Contribution in Wind EPC% increase in total hybrid project cost
Steel18.94%79%0.89%

Thus the increase in steel price lead to 3.35% hike in total project cost which translate into Rs. 0.07/Kwh increase in tariff.

On the basis of the above estimation, TPSL proposed revised tariff rate to Rs.2.56/Kwh from commission’s proposed tariff of Rs.2.49/Kwh.

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It should be noted other L1 bidder, Azure Power Pvt Ltd (APPL) challenged the commission’s reduced tariff rate in APTL.

Commission’s Analysis & Order

After analyzing all submission from petitioner and respondent, commission agrees the price of steel has increased substantially from the date of bidding. This price hike of steel would impact the total 500MW hybrid project cost. Commission also observed MSEDCL has no cheaper hybrid power source for procurement as SECI has exhausted its previous RE wind-solar capacity tranche.

In view of the above context, commission agreed to the proposed tariff rate of Rs.2.56/Kwh from TPSL. This tariff rate will be beneficial for MSEDCL’s RPO compliance.

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