MSEDCL issues tender for procurement of 500 MW of wind energy with a tariff cap of INR 2.95/kWh
In order to meet its renewable purchase obligations, MSEDCL issues tender to procure 500MW of wind power through competitive tendering process with a tariff cap of INR 2.95/kWh. MSEDCL will enter into long term PPA with wind project developers. The last date of bid submission is 26 September, 2019.
Maharashtra State Electricity Distribution Company Limited (MSEDCL) aims to fulfil its non-solar renewable purchase obligation (RPO) by buying wind power under a 25-year long-term power purchase agreement. In April, MSEDCL was directed by the Maharashtra Electricity Regulatory Commission (MERC) to procure wind power from competitive bidding route for wind power projects for which energy purchasing agreements (EPA) has expired with MSEDCL.
MSEDCL obtained the approval in July for deviations to the standard bidding document for the long term acquisition of 500 MW of wind power, which it sought from the Maharashtra Electricity Regulatory Commission (MERC). The approval was sought for projects involving the expiry of or about to expire EPAs in FY 2019-20.
The distribution company has issued a tender for a competitive tendering process to procure 500MW of wind power. The bid ceiling tariff of INR 2.95/kWh ($0,041) has been set. The Earnest Money Deposit (EMD) has been set at INR 10,00,000 / MW ($13,873), with the last date of bid submission of 26 September, 2019. Also the projects need to be commissioned within 18 months from the date of signing the PPAs.
The new or existing grid-connected interstate and intrastate projects with or without re-powering are eligible whose PPA has expired with MSEDCL. In addition, projects with valid PPA at feed-in-tariff or preferential tariff will also be eligible.
This tender will also include Intra-state projects that have already been commissioned and have no long term PPA with any agency and have been selling power on short-term or merchant plants basis. However, these projects should not have been accepted under any other government or central government programs and have no liability to existing buyers.
The bidders would be eligible for a minimum capacity of 25 MW for intrastate projects with having a size of 5 MW each project. On the other hand, bidders are allowed to bid for a minimum capacity of 50 MW for interstate projects with size of 5 MW of each project. Successful bidders will have to set up the wind power project, including the transmission and distribution network, at their own cost up to the point of delivery (including open access charges).
At present, the Maharashtra faces a deficit in achieving non-solar RPO targets and would then have an additional shortfall in meeting its non-solar objective following expiry of existing wind EPAs. Additional non-solar renewable energy (RECs) certificates would have to be obtained.
The MSEDCL is facing a dual problem of insufficient REC quantities available on the market and of RECs traded far above floor prices on the one hand, and of wind generators attempting to sell power through open access to MSEDCL and Mumbai utilities on the other.
MSEDCL had to contracted sufficient non-solar power through long-term contracts with the increasing targets of RPOs. It had previously attempted by competitive bidding processes to obtain wind power at the ceiling price of INR 1.97 ($0.02) / kWh, but no response from the bidders.
Later, MSEDCL decided to conduct the bidding process for the procurement of 500 MW of power from wind generators with a ceiling tariff of INR 2.52 ($0.036)/kWh for those whose EPAs expired or are going to expire in FY 2019-20, for a period of useful life or eight years.
The MSEDCL then decided to conduct an offer bidding process for procurement of 500 MW power from wind generators with a ceiling tariff of INR 2.52 ($0,036)/kWh , for the useful life of those whose EPA expired or will expire in FY 2019-20, for a period of eight years.
Maharashtra also faced allegations of delayed wind generator payments. In May, MSEDCL was reprimanded by MERC for continuous delay in complying with payment obligations, including the default in payment, to independent power producers and for failure to take account of previous commission orders.
