MERC Clears ₹6.38/kWh Tariff for Adani Electricity’s 750 MW Round-the-Clock (RTC) Renewable Power Procurement

In a definitive move to secure Mumbai’s long-term resource adequacy, the Maharashtra Electricity Regulatory Commission (MERC) has greenlit the adoption of a weighted average levelized tariff of ₹6.38/kWh for the procurement of 750 MW of Round-the-Clock (RTC) power by Adani Electricity Mumbai Limited-Distribution (AEML-D). Approved under Section 63 of the Electricity Act, 2003, the decision authorizes AEML-D to enter into a 10-year Power Purchase Agreement (PPA) with Powerpulse Trading Solutions Limited (PTSL). This strategic acquisition of traceable green power is designed to meet the city’s escalating peak demand while fulfilling statutory renewable mandates through a reliable, 24×7 supply framework.

Key Project Metrics Summary

Core Transaction and Technical Structure

The procurement utilizes a first-of-its-kind “supply-based” RTC model, a regulatory shift where payment is linked strictly to actual energy supplied. This structure effectively transfers all variability and balancing risks from the utility to the supplier. To guarantee the “RTC” promise, PTSL is mandated to provide a minimum 51% of energy from renewable sources, balanced by conventional thermal power. Crucially, as a technical backstop, PTSL has committed to arranging balancing power from alternate eligible sources, including Mahan Energen Ltd Unit #2, ensuring supply continuity without additional financial burden on AEML-D.

This supply ecosystem is underpinned by a robust infrastructure network. PTSL draws upon the Khavda (Gujarat) renewable hub, where Adani Green Energy Ltd (AGEL) is implementing a 3,531 MWh Battery Energy Storage System (BESS). This storage capacity is managed through specific SPVs—Adani Renewable Energy Thirty Six Limited (ARE36L), ARE37L, and ARE43L—which carry a “Crisil AA-/Stable” rating. These SPVs have secured 25-year Power Supply Agreements (PSAs) with PTSL at a fixed net realizable tariff, providing the long-term price stability required for PTSL to offer a competitive levelized rate to the Mumbai grid periphery.

Tender History and Bidding Timeline

The regulatory journey for Case No. 208 of 2025 highlights a rigorous competitive process aimed at discovering market-reflective pricing:

• Initial Launch: December 29, 2022 (Process met with limited market response).
• Revision: January 2025 (AEML-D revised documents with Commission-approved deviations to enhance competition).
• Technical Qualification: Four bidders met the technical threshold: MB Power, PTSL, Goldi Solar, and JSW Neo Energy, representing 1,500 MW of aggregate capacity.
• e-Reverse Auction: April 22, 2025 (PTSL aggressively reduced its initial quote of ₹6.48/kWh to the final ₹6.38/kWh).
• Award: AEML-D issued the Letter of Award to PTSL on August 12, 2025.

Tariff Comparison and Benchmark Analysis

MERC’s benchmarking exercise validated the ₹6.38/kWh rate as prudent by comparing it to both renewable and conventional baseload alternatives:

• Landed Cost vs. MSEDCL: A separate 2,500 MW RE-RTC tender for MSEDCL discovered a tariff of ₹5.90/kWh. However, that rate was “at the CTU point.” MERC’s math adds ₹0.56/kWh for transmission charges and losses, resulting in a landed cost of ~₹6.46/kWh at the Maharashtra periphery. At ₹6.38/kWh inclusive of these costs, the Adani/PTSL bid represents a significant saving.
• Thermal Benchmarks: The tariff remains competitive against recent baseload thermal tenders in Assam (₹6.30–₹6.80/kWh) and Bihar (₹6.075–₹6.205/kWh), particularly given the 51% green component of the RTC power.
• Transmission Risk Mitigation: Unlike the MSEDCL model, the PTSL tariff locks in the transmission risk, protecting the utility from future fluctuations in grid costs.

Regulatory Rationale and Strategic Impact

MERC found the procurement essential for Mumbai’s energy security and fiscal health under Section 63 guidelines:

• Demand & RPO Targets: Mumbai’s peak demand is forecasted to hit ~2,739 MW by FY 2029-30. Simultaneously, AEML-D must navigate a steep Renewable Purchase Obligation (RPO) trajectory, targeting 43.33% by FY 2029-30.
• Consumer Protection: By utilizing the supply-based model, MERC noted that the risks of RE intermittency are socialized within the supplier’s portfolio rather than passed to the ratepayer.
• Prudence of Procurement: The Commission concluded that securing fixed-tenure pricing through a transparent competitive process was in the ultimate interest of the consumer.

Transmission Landscape and Future Outlook

The deal is strategically timed against a volatile Interstate Transmission System (ISTS) environment. Data from iForest indicates that the NC-RE (National Component – Renewable Energy) sub-component of transmission charges has doubled recently, rising from 4% to 8% of total national charges. As Mumbai is a high-GNA (General Network Access) region, it often carries a disproportionate burden of these socialized grid costs.

Furthermore, the scheduled phase-out of ISTS waivers by July 2028 creates a potential “price cliff” for utilities that have not secured all-inclusive tariffs. Because the PTSL bid includes transmission costs within its levelized rate for the full 10-year PPA, AEML-D has effectively hedged against the rising “socialized” costs of the national grid. This proactive inclusion of transmission losses and charges ensures long-term cost stability as federal exemptions for new projects expire, positioning AEML-D favorably in the evolving Indian power market.

Official References & Regulatory Sources

• Maharashtra Electricity Regulatory Commission (MERC): Regulatory body overseeing the approval of Case No. 208 of 2025 regarding AEML-D’s 750 MW RTC power procurement. https://merc.gov.in/
• CRISIL Ratings Limited: Official credit rating agency providing the financial rationale and risk assessment for Adani Renewable Energy projects. https://www.crisilratings.com
• Ministry of Power (MoP), Government of India: The central authority responsible for issuing orders and deadlines regarding ISTS charges and waivers for renewable energy projects. https://powermin.gov.in/
• Central Electricity Regulatory Commission (CERC): The federal commission defining the regulations for the Connectivity and General Network Access (GNA) to the Inter-State Transmission System. https://cercind.gov.in/
• Central Electricity Authority (CEA): Technical arm of the Ministry of Power that plans the transmission systems for integrating renewable capacity by 2030. https://cea.nic.in/