MERC Approves 1,600 MW Thermal, 5,000 MW Solar Projects For Maharashtra

The Maharashtra Electricity Regulatory Commission (MERC) recently addressed a petition from the Maharashtra State Electricity Distribution Co. Ltd. (MSEDCL) for approval on two significant projects: the procurement of 1,600 MW of thermal power and 5,000 MW of solar power. This petition aims to meet the growing energy demands of the state through a combination of thermal and renewable sources.

The petition’s primary objectives included obtaining approval for the initiation of a competitive bidding process for these procurements, along with seeking permission for deviations in the standard bidding documents for thermal power and tariff-based competitive bidding guidelines for solar power. These deviations are intended to streamline the procurement process and align with current policies and market conditions.

MSEDCL highlighted the framework for power procurement, focusing on the Ministry of Coal’s SHAKTI policy and the Ministry of Power’s guidelines for long-term electricity procurement from thermal power stations. These policies emphasize transparency and efficiency in coal allocation and electricity procurement, ensuring a reliable supply of thermal power. Additionally, the guidelines for solar power procurement require bidders to quote a single fixed tariff for the entire term of the power purchase agreement, ensuring consistency and predictability in pricing.

The Central Electricity Authority’s (CEA) peak demand projections for MSEDCL were also presented, indicating a significant increase in demand from 26,558 MW in 2022-23 to an estimated 39,884 MW by 2031-32. This projected growth underscores the necessity for substantial additions to the state’s power generation capacity.

To address this anticipated demand, MSEDCL has outlined a comprehensive resource adequacy planning framework. This includes long-term contracts to cover 75-80% of the total supply requirements, medium-term contracts for 10-20%, and short-term contracts for the remaining needs. This strategy is designed to ensure a reliable and efficient operation of the power system across various timeframes, maintaining a balanced and sustainable energy mix.

MSEDCL’s current power supply position involves contracted capacities totaling 43,517 MW under various long-term power purchase agreements, encompassing thermal, gas, nuclear, hydro, and renewable sources. Despite these contracts, the actual annual availability of thermal power stations has often fallen short of the contracted capacities, highlighting the challenges in maintaining consistent power supply.

The petition also addresses the Renewable Purchase Obligations (RPO) specified by the Ministry of Power, which mandates a minimum share of non-fossil sources in the energy mix. The RPO trajectory set by the ministry outlines progressive targets up to the fiscal year 2029-30, promoting the integration of renewable energy sources into the state’s power supply.

Additionally, MSEDCL has consented to procure power from various new sources, including thermal, solar, hybrid (wind and solar), and hydroelectric projects, totaling 7,997 MW. This move is part of the company’s ongoing efforts to diversify its energy portfolio and enhance the reliability of its power supply.

The MERC’s approval of MSEDCL’s petition is a crucial step towards meeting Maharashtra’s future energy needs. By leveraging a mix of thermal and renewable energy sources, the state aims to ensure a stable, sustainable, and efficient power supply for its growing population and industries. The comprehensive planning and strategic initiatives outlined in the petition reflect MSEDCL’s commitment to addressing the challenges of rising demand and evolving energy policies, thereby contributing to the state’s long-term energy security and sustainability.

Please view the document here for more details.