MERC Approves MSEDCL’s 1,600 MW Solar Power Procurement At Competitive Tariffs

The Maharashtra Electricity Regulatory Commission issued a final order approving the Maharashtra State Electricity Distribution Co. Ltd.’s proposal to procure 1,600 MW of solar power. The approval allows MSEDCL to adopt tariffs discovered through a competitive bidding process conducted by NTPC Limited, which acted as the Renewable Energy Implementing Agency. The procurement has been approved as part of MSEDCL’s plan to meet its long-term Renewable Purchase Obligation targets and to address shortfalls from previous years.

The solar power will be supplied by four developers selected through the NTPC-led bidding process. JSW Renew Energy Thirteen Ltd. will supply 700 MW, while Anboto Solar Private Limited, Apraava Energy Private Limited, and Avaada Suryapower Pvt. Ltd. will each supply 300 MW. The landed tariff for the power, including a trading margin of ₹0.07 per unit payable to NTPC, ranges from ₹2.66 per kWh to ₹2.72 per kWh. MSEDCL highlighted that these tariffs are much lower than its actual average power purchase cost of ₹4.82 per kWh for the financial year 2023–24.

The power sale agreements will be valid for a period of 25 years from the scheduled commencement of supply date, which has been fixed as June 30, 2026. MSEDCL submitted that long-term procurement at these rates would help reduce overall power procurement costs while also supporting compliance with renewable energy obligations set by regulators.

While examining the petition, the Commission reviewed the need for procuring such a large quantum of solar power. MSEDCL relied on its Resource Adequacy Plan, which showed that the utility would require significant capacity additions in the coming years. As per this plan, MSEDCL expects a need for around 12,693 MW of additional solar capacity by the year 2033–34 to meet demand growth and renewable targets. The Commission also took note of the fact that the Central Electricity Regulatory Commission had already adopted the same tariffs in September 2024, confirming that the bidding process was transparent and competitive.

During the hearings, the Commission raised concerns about how MSEDCL would manage and absorb the additional solar generation, especially during periods when generation exceeds demand. In response, MSEDCL explained its strategy to manage surplus renewable energy through energy storage solutions. The utility informed the Commission that it has already contracted 3,500 MW of pumped storage capacity and is implementing 2,750 MW of Battery Energy Storage Systems. These storage assets are intended to store excess solar power generated during off-peak hours and supply it during peak demand periods.

The Commission observed that the use of both pumped storage projects and battery energy storage systems would help improve grid stability and reliability while allowing higher renewable energy penetration. It noted that proper planning for storage is essential for managing the variability associated with large-scale solar integration.

In its final order, the Commission approved the power sale agreements between MSEDCL and NTPC. It concluded that the procurement is consistent with Maharashtra’s renewable purchase obligation trajectory, which rises each year and reaches a total RPO target of 43.33 percent by 2029–30. The order enables MSEDCL to add a large volume of solar power at competitive tariffs while putting in place measures to manage its impact on the grid.