The Maharashtra Electricity Regulatory Commission (Merc) has approved state-owned power distribution company MahaVitaran’s request to procure 1,090 Megawatts (Mw) from private generators Indiabulls and Adani Power.
MahaVitaran can now purchase 650 Mw from Indiabulls and 440 Mw from Adani Power 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 (PPAs).
In a petition filed with the regulator, MahaVitaran had said it was necessary to purchase power from private companies to ensure continuous power supply at a reasonable rate to electricity consumers. “To mitigate imminent shortage of power, MahaVitaran will have to resort to purchase of power through energy exchange. 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 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,” it said.
MahaVitaran also noted there had been short supply from the state-run power producer, Maharashtra State Power Generation Co Ltd (MahaGenco), for want of coal and gas, and the cost of power procured from MahaGenco’s new stations ranged between Rs 4 and Rs 5.17 per unit. MahaGenco’s thermal based capacity is over 7,500 Mw. The demand for power in Maharashtra (excluding the Mumbai licence 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 a surplus entity, considering a demand growth of eight per cent, as projected by Central Electricity Authority, and the envisaged capacity addition. However, considering 10 per cent growth in peak demand, there would be shortfall of power from FY17.
Moreover, MahaVitaran argued long-term power purchase of 1,090 Mw was essential when new hydro projects are getting delayed due to environmental, geological and political issues. “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, MahaVitaran said it had resorted to load shedding over the last seven years leading to unrest among the consumers. The deficit power scenario has also affected 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 utilising domestic coal linkages, land, water and other resources from Maharashtra,” MahaVitaran said.
“In case the power generated by these projects is not utilised 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,” it added.