MERC Approves 700 MW Solar Power Procurement By MSEDCL At ₹2.63/kWh

The Maharashtra Electricity Regulatory Commission (MERC) has approved a major solar power procurement plan for the Maharashtra State Electricity Distribution Company Ltd. (MSEDCL). The decision allows MSEDCL to purchase 700 MW of solar power from JSW Neo Energy Ltd through the Solar Energy Corporation of India (SECI). This procurement is part of the ISTS Solar Tranche-XIII scheme, which aims to help the state meet its increasing Renewable Purchase Obligation (RPO) targets.

The approved tariff for the long-term agreement is ₹2.63 per kWh. This includes a base discovered rate of ₹2.56 per kWh and a trading margin of ₹0.07 per kWh payable to SECI. The agreement is set for 25 years from the start of the power supply, ensuring a long-term addition to Maharashtra’s renewable energy capacity.

MSEDCL had approached the Commission in December 2024, highlighting the need for substantial solar capacity to meet future RPO targets, which are expected to rise from 29.91% in 2024-25 to 43.33% by 2029-30. The utility emphasized that the discovered tariff of ₹2.63 per kWh is highly competitive, especially compared to its average power purchase cost of ₹4.82 per kWh in the 2023-24 financial year.

During the approval process, MERC examined both the technical and financial aspects of the proposal. A key factor in the approval was that the 700 MW project is proposed to be located within Maharashtra and connected to the intra-state transmission network. This helps manage transmission logistics efficiently. The Commission also noted that the Central Electricity Regulatory Commission (CERC) had adopted the discovered tariff in October 2024, ensuring that the rates were competitive and aligned with national bidding guidelines.

To address the intermittent nature of solar power, the Commission asked MSEDCL to provide a plan for absorbing surplus energy. In response, the utility outlined an extensive energy storage strategy. This includes the installation of 2,750 MW (5,500 MWh) of Battery Energy Storage Systems (BESS) and contracting 3,500 MW of Pumped Storage Projects (PSP). These storage solutions are expected to help balance peak solar generation during the day with consumer demand in off-peak or nighttime hours.

MERC concluded that the procurement is justified based on MSEDCL’s Resource Adequacy Plan and will significantly contribute to meeting both past and future RPO shortfalls. The approval of the Power Sale Agreement (PSA) between MSEDCL and SECI marks an important step in strengthening Maharashtra’s renewable energy portfolio and supporting the state’s transition toward cleaner energy sources.

This move is expected to help Maharashtra expand its solar capacity, enhance grid stability, and reduce dependence on conventional power, while promoting competitive tariffs for renewable energy in the state.