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Maharashtra State Electricity Distribution Company Ltd. (MSEDCL) has recently petitioned for approval to adopt tariffs for long-term power procurement from solar projects under the Mukhyamantri Saur Krushi Vahini Yojana 2.0 (MSKVY 2.0) scheme. This initiative aims to solarize agricultural feeders, providing daytime electricity to farmers through decentralized solar power projects.
Under MSKVY 2.0, the government of Maharashtra plans to solarize at least 30% of agricultural feeders by December 2025, totaling approximately 7,000 MW. MSEDCL launched a competitive bidding process to procure 7,783 MW of solar power from these projects. The goal is to reduce the overall cost of power procurement for MSEDCL and alleviate the burden of cross-subsidy on industrial and commercial consumers.
The bidding process involved cluster-wise tenders and individual substation-based tenders. Cluster-wise tenders required bidders to bid for all substations within a cluster, while individual substation-based tenders allowed bidders to choose specific substations. The aim was to ensure competitive and reasonable tariffs aligned with market trends.
MSEDCL received bids aggregating 7,738 MW, which surpassed the initial target of 7,000 MW set by the government. The proposed tariffs ranged from ?2.90/kWh to ?3.10/kWh, inclusive of all Change in Law events up to the date of bid submission. These tariffs are considered reflective of current market conditions and are comparable to rates in similar solar projects.
The Maharashtra Electricity Regulatory Commission (MERC) approved MSEDCL’s petition, allowing the adoption of tariffs for the procurement of 7,783 MW of solar power on a long-term basis. Additionally, MSEDCL was granted permission to procure an additional 2,000 MW of solar power under subsequent rounds of bidding, provided the discovered tariffs remain within the range of ?2.90/kWh to ?3.10/kWh.
The commission emphasized the importance of these solar projects in meeting Maharashtra’s renewable energy obligations and providing better-quality electricity to agricultural consumers. Furthermore, the projects contribute to reducing distribution losses and deferring investments in infrastructure strengthening.
MSEDCL is directed to sign Power Purchase Agreements (PPAs) with the selected solar generators within 30 days of the commission’s approval. The solar power procured from these projects will contribute to fulfilling MSEDCL’s Distributed Renewable Energy Renewable Purchase Obligations (RPO) for the respective periods. Overall, the commission’s decision reflects a commitment to promoting renewable energy adoption and facilitating the transition to a more sustainable energy future in Maharashtra. |
