MERC adopts Rs.1,65,998/MW/month tariff for MSEDCL's 2000 MW/4000 MWh standalone BESS procured via competitive bidding with PSDF VGF support
Petition of Maharashtra State Electricity Distribution Co. Ltd. for seeking approval on adoption of tariff for procurement of storage capacity from 2000 MW / 4000 MWh (1 Cycle) battery energy storage system through competitive bidding process (with VGF support from PSDF). And Interlocutory Application of MSEDCL seeking urgent listing of Case No 246 of 2025. And Interlocutory Application of MSEDCL seeking urgent listing of Case No 246 of 2025. And Interlocutory Application of Onward Solar Power Private Limited for intervention / impleadment as a Respondent under Case No 246 of 2025.
MSEDCL sought MERC approval under Section 63 of the EA 2003 and Regulation 19 of MERC RPO Regulations 2019 to adopt the tariff discovered via e-reverse auction for procuring 2000 MW/4000 MWh (1 cycle) standalone BESS with VGF support (Rs.18 lakh/MWh from PSDF), to meet MSEDCL's rising Energy Storage Obligation (1.5% in FY25-26 to 4% by FY29-30) and manage RE intermittency, peak-offpeak price gaps and grid flexibility. Following an earlier 250 MW/500 MWh approval, MSEDCL issued a larger RfS in July 2025; 46 bidders participated, L1 tariff was discovered, and disputes arose over L1-matching allocation, per-unit tariff conversion, LoA issuance and a post-bid MoP condition of 6300 lifecycle cycles.
- Approved adoption of L1 tariff of Rs.1,65,998/MW/month for 2000 MW/4000 MWh (1 cycle/day) BESS for a 15-year term under Section 63.
- Held the bidding process fair and transparent despite objections on L1-matching and non-issuance of LoAs; directed future compliance with LoA procedural formalities.
- Rejected any per-unit (Rs./kWh) tariff conversion; clarified Rs.2.91/kWh figure was illustrative only and tariff remains fixed per MW/month for entire tenure irrespective of battery degradation.
- Approved final bidder-wise capacity allocation (2000 MW total) including 100 MW to intervenor OSPPL and reduction of BEL's allocation to 500 MW (withdrawing its extra 200 MW).
- Rejected imposition of enhanced 6300-cycle requirement as a bidder obligation, ruling it a non-mandatory 'contractual right' for VGF eligibility only, with no change to RfS's 1 cycle/day condition or tariff.
- Approved power procured to count towards MSEDCL's Energy Storage Obligation (ESO); tariff adoption made subject to outcome of pending Bombay High Court WP 245 of 2026 (Onward Solar vs MSEDCL).
- BESPA to be executed with successful bidders within 15 days of the order (by ~21 March 2026); copy to be filed with MERC.
- MSEDCL to issue Letters of Award to successful bidders now that tariff is adopted.
- MSEDCL directed to extend support to bidders complying with RfS (1 cycle/day) to help them avail VGF under PSDF despite the 6300-cycle MoP condition.
- Final capacity allocation (incl. 900 MW to OPGPL, 500 MW to BEL, 100 MW to OSPPL) to be implemented per the approved table.
- Tariff adoption remains subject to outcome of pending Bombay High Court Writ Petition No. 245 of 2026 filed by OSPPL against MSEDCL.
- Power procured to be counted towards MSEDCL's RPO/Energy Storage Obligation compliance.
- • C&I open-access/RE developers should note MSEDCL will have a large firmed RE-plus-storage pool (2000 MW/4000 MWh) potentially easing peak supply and reducing curtailment risk affecting OA scheduling.
- • BESS/storage developers bidding into future MSEDCL tenders can benchmark against a competitive Rs.1,65,998/MW/month (~lower than GUVNL, RVUNL, TNGECL, KPTCL rates), signalling falling storage costs in Maharashtra.
- • Fixed per-MW/month capacity charge (no per-unit conversion, no degradation-linked cuts) sets a template C&I-linked storage PPAs may reference for revenue certainty.
- • Pending Bombay HC litigation (WP 245/2026) creates a residual legal risk that could affect final capacity allocation/tariff certainty for RE-storage hybrid project developers relying on this order.
This order is a strong reference point for storage tariff benchmarking in India - MSEDCL's Rs.1.65 lakh/MW/month is now among the lowest discovered nationally, useful for developers structuring bids or C&I storage-backed PPAs elsewhere. The Commission's firm stance protecting fixed per-MW/month tariff against degradation or post-bid MoP conditions (6300 cycles) is developer-friendly and reduces regulatory risk. However, the pending Bombay HC case (OSPPL) and change-in-Coram delays show procedural fragility; developers should track the writ outcome before treating allocations as final.
Growthifye does not take responsibility for the accuracy of this information. Values are compiled from tariff orders published on the websites of State Electricity Regulatory Commissions and distribution licensees (plus CEA / MoP / Grid-India), parsed automatically and shown with their source. Always verify against the signed order before any commercial decision. This one-pager is a Vidura-assisted summary of the official order; the signed order prevails.