MERC Approves 2000 MW/4000 MWh BESS Procurement For MSEDCL To Boost Grid Stability And Renewable Integration

In a major step toward improving grid stability and supporting renewable energy integration, the Maharashtra Electricity Regulatory Commission (MERC) has approved a petition filed by the Maharashtra State Electricity Distribution Company Limited (MSEDCL) to adopt a competitively discovered tariff for large-scale battery storage projects. The order, issued on March 6, 2026, enables the procurement of 2,000 MW/4,000 MWh of storage capacity from standalone Battery Energy Storage Systems (BESS), marking one of the largest such initiatives in India.

According to the Commission’s order, the discovered tariff has been approved at Rs. 1,65,998 per MW per month for a contract period of 15 years. The tariff is considered highly competitive and significantly lower than rates discovered in recent battery storage tenders conducted in states such as Gujarat and Karnataka. MSEDCL informed the Commission that the battery storage capacity will play a critical role in managing the variability of renewable energy sources such as solar and wind. These storage systems will help supply electricity during peak demand hours when renewable power generation tends to decline, thereby ensuring a more reliable and stable electricity supply.

The total storage capacity was allocated among seven successful bidders following a competitive bidding process. OPG Power Generation emerged as the largest winner, securing 900 MW of capacity. Bhilwara Energy was awarded 500 MW, while Mahati Industries secured 200 MW. ArMee Infotech received 150 MW. The remaining 250 MW capacity was distributed among Patanjali Ayurved, Onward Solar Power, and Diwakar Renewable.

During the approval process, several bidders and intervenors raised concerns related to the transparency of capacity allocation under the “first-come-first-served” mechanism for bidders that matched the lowest discovered tariff. One of the intervenors, Onward Solar Power, questioned how the allocation process was handled. However, MSEDCL addressed these concerns during the proceedings. The utility clarified that adjustments were made after Bhilwara Energy withdrew its request for additional capacity, which created room for other bidders to participate and receive allocations.

Another key issue raised by developers involved the operational cycle requirements for the battery systems. Bidders expressed concerns over a communication from the Ministry of Power suggesting that projects may need to complete 6,300 operating cycles during the contract period. Developers argued that this requirement would significantly increase battery degradation and negatively affect the financial viability of the projects. The original tender condition specified 5,475 cycles, equivalent to one charge-discharge cycle per day over the project life.

After reviewing the issue, the Commission ruled that the original tender condition would remain unchanged. By confirming that the projects will operate under the one-cycle-per-day requirement, the regulator provided clarity and relief to developers participating in the tender.

The battery storage projects will benefit from Viability Gap Funding provided through the Power System Development Fund. This financial support is expected to reduce project costs and make the storage capacity more affordable for the distribution utility and ultimately for electricity consumers.

With this procurement, MSEDCL aims to meet the state’s growing Energy Storage Obligations, which are expected to reach 4 percent by 2030. The Commission has directed all parties to sign the necessary agreements within 15 days so that the selected projects remain eligible for federal subsidy support and can move forward without delay.