Maharashtra’s Solar Power Procurement: Tariff Approval For 100 MW Projects Under MSKVY

Maharashtra State Power Generation Co. Ltd (MSPGCL) has petitioned for approval to adopt a tariff rate of ₹2.97/kWh for the long-term procurement of 100 MW solar power from projects under the ‘Mukhyamantri Saur Krishi Vahini Yojana’ (MSKVY). The petition, filed on 9th May 2023 under the Electricity Act, 2003, seeks approval for this tariff rate and addresses supplementary issues related to renewable energy obligations.

Originally, MSPGCL sought tariff adoption for a 100 MW solar project, later amending it to include an additional 400 MW. This amendment was made on 28th November 2023. The Maharashtra Electricity Regulatory Commission (MERC) noted the renewable purchase obligation compliance status for the financial years 2020-21 and 2021-22 in its Mid Term Review Order dated 31st March 2023.

The ‘Mukhyamantri Saur Krishi Vahini Yojana’ (MSKVY) was initiated by the Government of Maharashtra (GoM) to provide daytime power supply to the agricultural sector, reduce line losses, and alleviate the subsidy burden on the government. The scheme operates through a Public Private Partnership (PPP) model.

MSPGCL published an Expression of Interest (EoI) on 29th August 2022, inviting bids for setting up 600 MW of solar power projects across Maharashtra. The EoI outlined the responsibilities of bidders, including infrastructure development and evacuation system arrangements.

After evaluating bids, MSPGCL identified ESPL as the lowest bidder for the Aurangabad region, offering a tariff of ₹2.97 /kWh. MSPGCL requested ESPL to negotiate the tariff, but ESPL declined. MSPGCL then proposed to adopt ESPL’s tariff of ₹2.97 /kWh.

ESPL expressed interest in developing an additional 400 MW capacity across Nashik, Amaravati, Nagpur, and Pune regions. However, MSPGCL’s proposal to allocate this additional capacity was met with objections from MSEDCL, citing concerns about the bidding process’s integrity.

The Maharashtra Electricity Regulatory Commission (MERC) reviewed the proposal and approved the tariff of ₹3.04/kWh for the 100 MW solar projects in the Aurangabad region. However, the request for an additional 400 MW capacity allocation was not approved, emphasizing the need to maintain the integrity of the bidding process.

MSPGCL and MSEDCL were directed to collaborate on finalizing substations and project sizing, ensuring effective project rollout within a month. The commission partially approved the petition, allowing the tariff for the 100 MW projects but rejecting the request for additional capacity allocation. While the tariff approval for solar projects under MSKVY was granted, concerns about maintaining the bidding process’s integrity led to the rejection of the request for additional capacity allocation. Collaboration between MSPGCL and MSEDCL was emphasized to ensure effective project implementation.

Please view the document here for more details.