Maharashtra wants to amend EPAs for 500 MW of wind power

The Maharashtra State Electricity Distribution Company (MSEDCL) has been granted requests for changes to energy purchase agreements covering 500 MW of wind power which had or were about to expire. The Maharashtra Electricity Regulatory Commission agreed to reduce minimum installed and bid capacity from 5 MW to 0.5 MW, and 25 MW to 0.5 MW, respectively. MSEDCL also secured permission for a capacity utilisation factor below 22% and a maximum six-month cumulative period for repowering included in a power purchase agreement.

The Maharashtra State Electricity Distribution Company Limited (MSEDCL) has received the approval it sought from the Maharashtra Electricity Regulatory Commission (MERC) for deviations in the standard bidding document for the long-term procurement of 500 MW of wind power.

The approval was sought for wind projects for which the energy purchase agreements (EPAs) had expired or are about to expire in FY 2019-20.

The MSEDCL has sought the approval for admitting its petition as per the provisions of Regulation 19 of MERC (Renewable Purchase Obligation (RPO), Its Compliance and Implementation of REC Framework) Regulations, 2016.

According to the standard bidding guidelines issued by the Ministry of Power (MoP) in 2017, the MSEDCL can propose the deviations to the commission, and after due approval, the DISCOM can implement them for the fulfillment of its RPO.

In a similar case earlier this year, the state commission had directed MSEDCL to procure wind power through the competitive bidding route from wind power projects whose EPAs with MSEDCL had expired. In that order, the commission had mentioned that as the wind generators had their EPAs with MSEDCL for past several years and their projects were already commissioned, MSEDCL may take appropriate deviations, from provisions of the competitive bidding guidelines with prior approval of the commission. The rate discovered in the bidding process would be dealt with by the MERC during the tariff adoption process for meeting the requirement of fulfilling its non-solar RPO.

At present, there is a shortfall in the achievement of non-solar RPO targets, and after the expiry of the existing EPAs, it would have a further shortfall in meeting its non-solar target. This will require the procurement of additional non-solar renewable energy certificates (RECs).

The MSEDCL is facing a dual problem. On the one hand, due to inadequate quantities of RECs available in the market, RECs are being traded at rates much higher than the floor prices. On the other hand, wind generators are trying to sell power through open access to bulk consumers of MSEDCL and Mumbai utilities.

With the increasing targets of RPOs, it was required for the MSEDCL to contract enough non-solar power through long-term contracts. Earlier, it had attempted to procure wind power through a competitive bidding process at the ceiling rate of ₹1.97 ($ 0.02)/kWh, but no response was received from the bidders.