MERC Approves 1,468 MW Wind-Solar Power Deal With SJVN At ₹4.45/kWh For Peak Demand Supply

The Maharashtra Electricity Regulatory Commission (MERC) recently passed an order concerning the procurement of 1,468 MW of Firm and Dispatchable Renewable Energy (FDRE) by the Maharashtra State Electricity Distribution Co. Ltd. (MSEDCL) from SJVN Limited. This case revolves around the approval of the discovered tariff, Power Sale Agreement (PSA), and Power Purchase Agreement (PPA) between MSEDCL and SJVN, a major renewable energy provider.

MSEDCL filed the petition under Section 63 of the Electricity Act, 2003, and the relevant regulations to adopt the tariff for the FDRE power, obtained through a competitive bidding process. The proposed tariff was ₹4.45-4.46 per kWh, inclusive of a trading margin of ₹0.07/kWh. This procurement of power is intended to help MSEDCL meet its solar Renewable Purchase Obligations (RPO) and to provide a stable energy supply during peak demand hours.

The key aspects of the case include the structure of the FDRE projects, which involve a combination of wind and solar power, supported by energy storage systems (ESS). The energy storage is designed to ensure consistent power availability during peak hours, specifically two hours in the morning and two hours in the evening, thus providing reliable energy to meet MSEDCL’s daily peak demands.

SJVN had conducted an auction, which resulted in a competitive tariff for the project, with bidders offering varying capacities of wind, solar, and ESS. The average annual capacity utilization factor (CUF) for the projects is expected to be around 72%, translating to approximately 17 hours of daily availability.

MSEDCL provided its consent to the procurement of 1,468 MW, although it originally agreed to a higher capacity of 2,368 MW. However, due to pre-existing commitments to other distribution companies, SJVN reduced the quantum to 1,468 MW. This decision was confirmed in correspondence between MSEDCL and SJVN in early 2024, and subsequent PSAs were signed.

The tariff adopted by MSEDCL is considered competitive, especially when compared to the rates on power exchanges, where prices can spike during peak demand hours. The order emphasized that the adoption of renewable energy would help address MSEDCL’s RPO shortfall, reduce the cost of peak power procurement, and align with the resource adequacy planning for Maharashtra’s energy needs. The procurement is also seen as part of a larger plan to integrate more renewable energy into the grid while ensuring the availability of firm power through energy storage systems.

The Commission approved the procurement of 1,468 MW FDRE at the proposed tariff and highlighted that the power procured would count toward MSEDCL’s RPO compliance. It also emphasized the need for MSEDCL to coordinate with transmission authorities to ensure the availability of the inter-state transmission system for the seamless evacuation of power from these projects. The approval was granted for 25 years, subject to the conditions outlined in the PSA and PPA.

This decision marks an important step in Maharashtra’s transition towards a more sustainable energy future by increasing the share of renewable energy in its power mix while addressing grid reliability concerns during peak demand periods​.