Waaree Breathes Easy As Bid for 184 MW Project Gets MERC Approval

Waaree Energies Limited (WEL), which had emerged as the sole bidder in the much postponed tender for 184 mw of solar power in Maharashtra can finally get started on the project. This follows the approval of its bid of Rs 3.05 per unit under the tender by the Maharashtra Electricity Regulatory Commission (MERC).

The tender had been called for by Maharashtra State Power Generation Company Limited (MSPGCL), which along with Maharashtra State Electricity Distribution Company Limited ( MSEDCL) was handling the same, under the state’s Mukhyamantri Saur Krishi Vaahini Yojana’.

A scheme targeting renewable energy specifically for agricultural activities. A second request before MERC, to consider the power generated under the state’s RPO obligations, was also accepted.

For the Mumbai-headquartered Waaree, the order will be a very useful  addition to its pipeline, considering its own stated 2 GW manufacturing capacity for solar PV modules. The firm is led by Hitesh Doshi, its Chairman and Managing Director.

Here is what the final order states.

Maharashtra State Power Generation Company Ltd and Maharashtra State Electricity Distribution Company Ltd. are allowed to procure 184 MW Solar Power at the rate of Rs. 3.05/kWh discovered through Competitive bidding under Section 63 of the Electricity Act, 2003 from M/s Waaree Energies Limited for 25 Years under Mukhyamantri Saur Krishi Vahini Yojana.

Maharashtra State Power Generation Company Ltd and Maharashtra State Electricity Distribution Company Ltd. to make necessary changes in the Power Purchase Agreement and Power Sale Agreement and submit the same to the Commission.

The Solar Power procured from these projects shall be counted towards fulfillment of Maharashtra State Electricity Distribution Company Ltd.’s Solar RPO for the respective periods.

The key issue that came up, as readers will notice, is the peculiar situation of a single bidder despite many attempts,which made a final reverse bidding process between bidders as mandated, impossible.

Not just that, Waaree, by quoting Rs 3.23 per unit in case it was to produce receipt of having paid safeguard duty, had also created a need for a deeper look at the pricing, since land and associated costs were being provided by MSPGCL. Finally, the firm agreed to a valuation of 18 paise on the safeguard duty, while land and other related costs were valued at Rs 0.057 for the life of the 25 year projects. Making for minimal impact, and a final price of Rs 3.05.

Another issue that had been considered is the fact that the commission had approved a rate of Rs. 2.99/kWh for 50
MW of Solar Power as recently as 23 December 2019 under Case No. 310 of 2019 with similar provisions, which was jointly filed by MSPGCL and MSEDCL. It decided that the rate of Rs 3.05 was close enough to that rate.

In any case, with Waaree a manufacturer itself of key components, with a strong domestic sourcing record, the price of Rs 3.05 for every Kilowatt hour is being taken as a given, clearly.

With the project spread over multiple districts and sites in Maharashtra, the minimum bid quantity had already been reduced from 5 MW to 2 MW by the commission in an earlier order.

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Prasanna Singh

Prasanna has been a media professional for over 20 years. He is the Group Editor of Saur Energy International