MERC Partly Approves Connectivity Clarification for Hybrid Renewable Projects Based on Higher Installed Capacity

UltraTech Cement Ltd. filed a petition with the Maharashtra Electricity Regulatory Commission (MERC) on 8 August 2024. The company requested clarification or permission to allow hybrid renewable energy projects to seek grid connectivity based on the higher of the two installed capacities—solar or wind, instead of the combined total capacity of both sources. The petition was aimed at ensuring better infrastructure utilization and was grounded in national and state renewable energy policies.

UltraTech Cement has two cement manufacturing plants in Maharashtra and plans to set up hybrid renewable energy plants to supply power to these units. The company cited that similar permissions are allowed in states like Gujarat, Rajasthan, and Andhra Pradesh, and are in line with the Ministry of New and Renewable Energy’s (MNRE) Wind-Solar Hybrid Policy of 2018. UltraTech’s main argument was that wind and solar resources are complementary, and their combined use at a single point of grid connection would result in better efficiency and power stability. They also pointed out that forcing connectivity based on total combined capacity results in inefficient infrastructure use since solar and wind do not usually generate peak power simultaneously.

The petition was opposed by the Maharashtra State Electricity Transmission Co. Ltd. (MSETCL) and the Maharashtra State Electricity Distribution Co. Ltd. (MSEDCL), which maintained that connectivity should follow existing regulations that consider combined capacity. MSETCL submitted that it has already proposed a draft procedure for granting grid connectivity to renewable energy sources and that UltraTech’s request could only be allowed after approval from the Commission. MSEDCL also challenged the maintainability of the petition, saying any new regulatory norms must undergo public consultation and cannot be set through an individual petition.

UltraTech responded that their request did not seek to amend existing regulations but merely sought a clarification. They argued that existing laws and policies support their position and that there is no regulatory provision that explicitly prohibits granting connectivity based on the higher of the two installed capacities in hybrid projects. They further claimed that denying such connectivity results in overdesigning of infrastructure, increased costs, and blocked transmission capacity that is never fully used.

The MERC noted that UltraTech’s petition was not about changing the law but seeking practice directions or clarification. It ruled that the petition was maintainable. The Commission reviewed national and state policies and found that while they support hybrid energy projects for better grid stability and land utilization, they do not explicitly allow grid connectivity based on only the higher capacity of solar or wind.

However, the Commission acknowledged that MSETCL had submitted a revised procedure that allows hybrid projects to seek connectivity based on the higher of the two capacities, provided the project is co-located. The Commission stated that this addresses UltraTech’s main concern for co-located projects.

For non-co-located hybrid projects, the Commission directed the Grid Co-ordination Committee to conduct a detailed study and propose a framework addressing connectivity at multiple or non-co-located locations. This framework is to be submitted to MERC within six months for potential regulatory amendments. The petition was therefore partly allowed.