2. MSEB Holding
Company
Maharashtra State
Power Generation
Corporation Limited
Maharashtra State
Electricity
Transmission
Company Limited
Maharashtra State
Electricity
Distribution
Company Limited
Introduction - Maharashtra, India
Maharashtra, situated in the western part of India, is surrounded by the states of
Gujarat, Madhya Pradesh, Chattisgarh, Andhra Pradesh, Karnataka and Goa.
Maharashtra is the second most populous State with over 110 million inhabitants.
9% of the population of India lives in Maharashtra. Maharashtra is the 5th
most
urbanized state in India with 45.2% of urban population. Maharashtra contributes
25% of the country’s industrial output and 23.2% of the GDP (FY2011 estimates).
Mumbai, the state capital of Maharashtra, is also called as the Financial Capital of
India.
Maharashtra Power Sector1
Maharashtra State Electricity Board (MSEB) is structured into four entities.
In addition to these companies, Maharashtra Electricity Regulatory Commission was established in
August, 1999 to put in place key regulations governing the power sector and the tariffs for the same.
Demand and Supply: Peak demand of 20000 MW, with a peak deficit of -1.7% & energy deficit 1.35%.
Generation: Total generation capacity available to the state is 37,797. It comprises of power allocated
by the Central Government as well as the power produced by private developers. State (36%), Central
(17%), Private (46%). Transmission: Intra-State ckt kms of transmission lines is about 45,531.
Distribution: There are 4 distribution licensee in Maharashtra, namely, MSEDCL, BEST, R-Inra, TPC.
The distribution licensees cater to almost 2.08 million consumers.
Electrification Status of Maharashtra2
Out of the total number of households in Maharashtra, about 84% of the households are electrified,
whereas 16% of the households are still un-electrified. Only about 4% of the Urban Households are un-
electrified, whereas about 26% of the Rural Households are un-electrified.
1
‘Power for All, Maharashtra’, 2015 website: http://powermin.nic.in/
2
‘Power for All, Maharashtra’, 2015 website: http://powermin.nic.in/
3. Industrial,
37.58
Agricultural
, 18.82
Street
Lights, 1.4
Domestic,
25.65
Commecial,
9.47
Railways,
3.53
Miscellane
ous, 3.43
Power Consumption Pattern
‘Power For All’3
‘Power for all’ is a joint venture of the Government of India and the Government of Maharashtra, to
provide electricity to people through 24x7 power supply. The 24X7 ‘Power For All’ Roadmap has
provided the State with the opportunity of bringing together an overarching proposal for taking its power
sector outcomes to new heights. Additionally, Maharashtra is keen to build on its past performance and
emerge as one of the most progressive states in terms of demand supply adequacy, AT&C loss
reduction, renewable energy development, energy efficiency measures and customer orientation. The
Program aims at providing 24X7 supplies to all electricity consumers and providing electricity access to
all unconnected households in the State by FY19.
Renewable Energy Plan4
Maharashtra State has a nodal agency called ‘Maharashtra Energy Development Agency’ which works
under the Ministry of New and Renewable Energy. The objectives of MEDA are as follows:
1) Promote, develop and implement non-conventional, renewable and alternate energy devices and
technologies. 2) Take concrete steps for conventional energy conservation measures in industries,
commercial establishments and domestic sectors. 3) Evolve suitable alternatives to meet the
burgeoning energy demand. 4) Install demonstration power projects with own investment to instill
confidence in new entrants and private investors. 5) Information dissemination and public awareness
through training programs, publications, exhibitions, seminars and conferences.
3
‘Power for All, Maharashtra’, 2015 website: http://powermin.nic.in/
4
http://www.mahaurja.com/
4. Installed Capacity5
Maharashtra has an installed capacity of
6,705 MW from RE sources. The RE installed
capacity base is mainly contributed by the
4442 MW of wind energy projects and the
rest is from solar, small hydro, biomass, and
industrial waste sources of energy.
Maharashtra is second only to Tamil Nadu in
terms of installed capacity of RE generation
amongst all states.
The Government of Maharashtra has
declared a policy for the development of
power using Renewable sources of energy.
The policy aims to add 14,900 MW of
renewable energy in the next 5 years. The
following table gives details about specific
RE capacity addition.
Maharashtra State Solar Policy6
Under this policy, solar power projects of 2500MW will be developed by MSPGCL in Public Private
Partnership mode to fulfill the Renewable Generation Obligation. The remaining 5000MW will be
developed by other developers. 10% of the 2500MW shall be implemented along the canals, lakes,
water bodies, of the Water Resource Department or interested local government bodies. The minimum
capacity of a solar power project under this policy will be 1MW. Deemed Non-Agricultural land status is
given in respect of the land procured for the solar power projects under this policy. Government land
will be granted, without auction, and as per availability, for the manufacture of solar modules,
equipment, and allied machinery at 50% concessional rate. Electricity duty will not be levied for a period
of 10 years from the date of commissioning. These projects can also be developed through solar park
mode. Solar Park of 250kW capacity can be developed individually and then combined to form 1MW.
MSEDCL/ MSETCL will give grid connectivity.
5
‘Power for All, Maharashtra’, 2015 website: http://powermin.nic.in/
6
http://www.mahaurja.com/
RE Source Potential (MW) Installed Capacity
(MW)
Wind 9400 4442
Small Hydro 732 284
Bagasse Co-gen 2200 1415
Biomass Power
Project
781 200
MSW & Liquid
Waste
287 3
Industrial Waste 350 32
Solar Power
Project
49/ sq.km. 330
RE Source Capacity (MW)
Wind 5000
Solar 7500
Small Hydro 400
Biomass 300
Municipal/ Industrial
waste
200
5. Types of Policy based projects7
Viability Gap Funding8
There are many projects with high economic returns, but the financial returns may not be adequate for
a profit-seeking investor. In such cases, the government can pitch in and meet a portion of the cost,
making the project viable.
This method is known as viability gap funding. VGF is
typically provided in competitively bid projects. Under
VGF, the central government meets up to 20% of
capital cost of a project. The state government,
sponsoring ministry or the project authority can pitch in
with another 20% of the project cost to make the
projects even more attractive for the investors. Potential
investors bid for these projects on the basis of VGF
needed. Those needing the least VGF sup-port will be
awarded the project. For example, Solar Energy
Corporation of India recently, put a tender for 500MW
capacity solar power project, which received weak response from the developers. The conditions of the
SECI tender include a fixed power purchase tariff of INR 4.43 (USD 0.065/EUR 0.060) per kWh,
Viability Gap Funding (VGF) of up to INR 10 million per MW for the 450 MW not reserved for modules
meeting domestic content requirement, land to be procured by developers, and a minimum project size
of 10 MW. Bidders will be picked on the basis of most competitive VGF quotes.
Tariff-Based Bidding
In tariff-based bidding mechanism, the Distribution Licensee invites bids for purchase of power for long-
term. Distribution Licensee seeks to select competent, experienced and capable party or a consortium
of parties who have the necessary financial strength for supply of power on a long-term basis. The
contracted power shall be sold only to the Procurer as per the terms and conditions of a Power
Purchase Agreement (PPA). The project developers bid on the cost of per kWh of power, which is to be
charged to the Distribution Licensee. The lowest bidder wins the project.
Renewable Purchase Obligation9
Renewable Purchase Obligation applies to all the
Distribution Licensees in the State of Maharashtra.
Every obligated entity i.e. the Distribution Licensee
and consumer with a contract demand of 5MW and
above shall procure electricity generated from eligible
RE sources to the extent of percentage, out of its total
procurement of electricity from all sources in a year.
7
‘Solar Handbook’, 2016 website: http://www.bridgetoindia.com/
8
Economic Times – Viability Gap Funding
9
MERC RPO-REC Regulations, 2016 website: http://www.mercindia.org.in
6. Renewable Energy Certificate10
REC’s addresses the issue of mismatch between the availability of renewable energy sources and the
requirement of Renewable Purchase Obligation. REC’s encourage the states with good renewable
energy potential to develop power projects from RE sources and generate Renewable Energy
Certificates. One Renewable Energy Certificate is equal to 1 MW of electricity, generated through
renewable sources, injected into the grid. REC can only be exchanged in Power Exchanges approved
by the Central Regulatory Committee.
Akshay Urja Shops
The Shops carry out the following functions:
Sale of different renewable energy and energy efficient devices
Repair and servicing of renewable energy devices
Dissemination of information on renewable energy devices/ systems
Facilitate individuals/ companies to go in for renewable energy devices
Net-Metering11
The Distribution Licensee shall allow Net Metering Arrangement to Eligible Consumers provided
that the cumulative capacity of all Roof-top Solar PV Systems under Net Metering Arrangements
connected to a particular Distribution Transformer of the Licensee shall not exceed 40% of its rated
capacity. The Distribution Licensee shall provide information on its website regarding the capacity
available on each Distribution Transformer for connecting Roof-top Solar PV Systems under Net
Metering arrangements. Net Metering Connection Agreement for 20 years.
Energy Accounting and Settlement
The accounting of electricity exported and imported by the Eligible Consumer shall become effective
from the date of connectivity of the Roof-top Solar PV System with the distribution Network. if the
quantum of electricity exported exceeds the quantum imported during the Billing Period, the excess
quantum shall be carried forward to the next Billing Period as credited Units of electricity. The
unadjusted net credited Units of electricity as at the end of each financial year shall be purchased by
the Distribution Licensee at its Average Cost of Power Purchase.
Conclusion
Government of India and Government of Maharashtra are working together like never before.
The aim of providing electricity for all for 24x7 by 2019 is a very ambitious target. However the
measures taken so far are also commendable. If the current political party stays in government for a
long time and continues to work the way they have so far, these targets can be achieved.
10
‘MERC RPO-REC Regulations, 2016 website:http://www.mercindia.org.in/
11
‘Solar Rooftop Net Metering’ website: http://www.mahadiscom.com/SolarRoofTopNetMetering.shtm
