Maharashtra's 6600 MW power tender under regulatory scrutiny

02 Jul 2024 CW Team

The Maharashtra State Electricity Distribution Company (MSEDCL) has issued a 6,600 MW tender for long-term power procurement, now under review by the Maharashtra Electricity Regulatory Commission (MERC). MSEDCL applied for approval for deviations in the standard bidding documents, but MERC, in a June 25 order, questioned why this approval was not sought before the bidding process began. MERC directed MSEDCL to quantify how the proposed deviations benefit consumers.

In March, MSEDCL issued a tender for 1,600 MW of thermal power and 5,000 MW of solar power in Maharashtra, just before the model code of conduct for the Lok Sabha elections was enforced. The power procurement is intended to meet the demand for 2033-34, a decade from now.

MERC's order required MSEDCL to clarify whether the early commissioning, starting in 2 to 4 years, would result in any stranded capacity. The regulator also sought confirmation that MSEDCL had secured sufficient power to meet projected demand before 2033-34. Additionally, MERC asked MSEDCL to explain the rationale for combining solar and thermal power procurement from a single entity and whether future thermal power procurements would follow this approach.

According to sources, MSEDCL aims to finalize the tender by July, before the state election code of conduct is issued for the October 2024 elections. An industry source indicated that projects of this magnitude would need around Rs 400 billion in investment. Interested parties must secure offers from equipment suppliers, arrange financing, and procure essentials such as land, water, and transmission for participation in the tender.

Infrastructure Transport

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