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MERC against competition in wind power

According to reports, even as MSEDCL is facing allegations of irregularities in power purchase, Maharashtra Electricity Regulatory Commission (MERC) has turned down a plea in which MSEDCL was seeking transparency.

MSEDCL wanted to purchase wind power through competitive bidding, but the Commission wants MSEDCL to buy it at rates fixed by it. MSEDCL filed a petition in MERC seeking a review. The Commission agreed that it was a valid point, but referred the matter to a committee headed by principal secretary (energy), with representatives of wind power companies, Maharashtra Energy Development Agency (MEDA) and consumers representatives. Incidentally, principal secretary (energy) Ajoy Mehta is also managing director of MSEDCL.

The committee was constituted on October 1 to study wind energy situation in the state and was asked to submit its report in three months. The Commission has refused to grant interim relief to MSEDCL in the meantime.

Mahagenco and MSEDCL had accused the Commission of favouring wind power producers. They charged that the rates of wind power approved by it are the highest in the country, but the rates of solar power, whose sole generator is Mahagenco, are one of the lowest. However, the Indian Wind Power Association (IWPA) submitted data to MERC proving MSEDCL wrong.

MERC’s rate for wind power ranges from Rs 4.93 to Rs 5.67 per unit, which is far higher than thermal power rates (except new units of Mahagenco). MSEDCL has resolutely opposed purchase of wind power on the grounds that it will burden consumers, but MERC has not refused to buy this agreement. Now, MSEDCL wants competition to lower the rates.

During the hearing, MSEDCL submitted that the rates of solar power have come down due to competition, and the same would happen in wind also. It pointed out that Section 63 of the Electricity Act, 2003, did not make any segregation in purchase of renewable energy and non-renewable energy.

While agreeing that wind power was costly, MERC told MSEDCL that it had to meet renewable energy purchase obligation (RPO) target set by central government. The company had failed to meet its target in 2012-13 even though the entire contracted capacity of 2,350MW had been commissioned.

MERC has also turned down MSEDCL’s plea for a uniform wind power tariff in the state. The Commission has divided the state into two zones for calculating the rates. It is Rs 4.93 per unit in one zone and Rs 5.67 per unit in the other. The Commission said in the order that zoning was done after taking views of all concerned parties and as per norms of renewable energy tariff regulations. Therefore, any revision was not desirable, it said.

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