Maharashtra government own power distribution company’s (MahaVitaran) policy of not to solely rely on the procurement of power from state run power generation company (MahaGenco) but to explore multiple options through competitive bidding has ones again received regulatory support.
The Maharashtra Electricity Regulatory Commission (MERC) has approved procurement of 1,090 MW from Indiabulls (650 MW) and Adani Power (440 MW) from 2017-18 onwards.
The levellised tariff for Indiabull’s project would be Rs 3.42 per unit and Rs 3.28 per unit for Adani Power. MERC has asked MahaVitaran to submit the signed power purchase agreements (PPA).
MahaVitaran in its petition had submitted that it was necessary to ensure continuous power supply at a reasonable rate to the consumers of electricity in the state.
“To mitigate imminent shortage of power, MahaViataran will have to resort to purchase of power through energy exchange. In addition, the rate at which, power is traded on the energy exchanges fluctuates widely and, there is no assurance on the quantum of power that may be available from the energy exchanges at the rate which are viable. Besides, based on the demand supply analysis, it has projected a shortfall of 1,447 MW in 2017-18 and the projected shortfall is expected to increase to 6,434 MW in 2019-20.”
MahaVitaran also noted that there has been short supply from the MahaGenco for want of coal and gas and the power procured from Mahagenco’s new stations in particular ranges between Rs 4 and Rs 5.17 per unit. MahaGenco’s thermal based capacity is 7,500 MW plus.
The demand for power in Maharashtra State (excluding Mumbai License Area) is about 18,463 MW while the available generation capacity is 13,992 MW leading to a deficit of 4,473 MW. MahaVitaran would be surplus considering a demand growth of 8%, as projected by Central Electricity Authority in its 17th Electric Power Survey (EPS) and the envisaged capacity addition. However, considering 10% growth in peak demand, there would be shortfall of power from FY 2016-17.
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Moreover, MahaVitaran argued that long term power purchase of 1,090 MW was essential when new hydro projects are getting delayed due to environmental, geological and political issues. Further, reduced gas availability has forced gas based projects to run at suboptimal levels of operation. “In such a scenario, the proposed PPAs for additional power with Indiabulls and Adani Power, which are in an advanced stage of construction, must be considered, as this will help Maharashtra to meet its energy demand in the long term,” MahaVitaran said.
Justifying its PPAs with Indiabulls and Adani Power, MahaVitaran said it had resorted to load shedding over the last seven years leading to unrest among the consumers and the consumers especially from the rural areas were the worst affected.
The deficit power scenario has also impacted industrial growth.
“Therefore, contracting power from a generating station located near the load centre is beneficial in all respects considering the savings on transmission expenses and loss. The projects being developed by Indiabulls and Adani Power are being developed by utilizing domestic coal linkages, land, water and other resources from Maharashtra. In case the power generated by these projects is not utilized by Maharashtra, the developers of these projects will be forced to sell their power to other states and this would deprive Maharashtra from benefits available from these projects,” MahaVitaran said.