MERC Approves BEST's Procurement of 220 MW Solar with 110 MW/440 MWh BESS from SECI
The Maharashtra Electricity Regulatory Commission has approved Brihanmumbai Electric Supply and Transport's proposal to procure 220 MW solar power with 110 MW/440 MWh battery energy storage from Solar Energy Corporation of India.
August 06, 2026. By Mrinmoy Dey
The Commission also approved the execution of a 25-year Power Sale Agreement (PSA) at a discovered tariff of INR 2.86-2.87/kWh, along with SECI's trading margin of INR 0.07/kWh, while recognising the procurement towards BEST's Renewable Purchase Obligation (RPO) and Energy Storage Obligation (ESO).
BEST had approached MERC seeking approval for the long-term procurement of 220 MW solar power integrated with 110 MW/440 MWh ESS under SECI's competitive bidding programme. The utility submitted that the procurement would help meet its RPO requirements under the Electricity Act, 2003 and the MERC Multi-Year Tariff Regulations, 2024, while supporting its long-term resource adequacy planning.
The procurement is part of SECI's 2,000 MW grid-connected solar power coupled with 1,000 MW/4,000 MWh ESS tender floated in June 2025. Following the reverse auction conducted in October 2025, tariffs were discovered in the range of INR 2.86-2.87/kWh, with SECI acting as the intermediary procurer between renewable power developers and buying entities.
According to the petition, BEST initially consented to procure 200 MW solar power with 100 MW/400 MWh ESS, but SECI subsequently offered 220 MW solar with 110 MW/440 MWh ESS from projects connected to the Maharashtra State Transmission Utility (STU) network. BEST stated that sourcing power from projects connected to the state transmission network would eliminate ISTS transmission charges and losses, making the power among the most economical available. The utility also highlighted that the reduction in GST on solar cells and modules from 12 percent to 5 percent could result in a 10-12 paise per unit tariff reduction through a reverse Change in Law benefit, subject to regulatory approval.
BEST informed the Commission that the procurement aligns with the MERC RPO-REC Framework, under which distribution licensees are required to progressively increase their Energy Storage Obligation from 1.5 percent in FY 2024-25 to 4 percent by FY 2029-30. It also noted that the Commission had earlier directed the utility to explore long-term procurement of battery energy storage instead of relying on short-term market purchases.
In its analysis, MERC observed that the proposed procurement supports the firm and dispatchable renewable energy (FDRE) capacity envisaged in BEST's approved Resource Adequacy Plan while enabling compliance with future ESO targets. The Commission held that the proposed procurement was justified and approved the full quantum of 220 MW solar with 110 MW/440 MWh ESS.
The Commission further noted that the tariff had already been adopted by the Central Electricity Regulatory Commission (CERC) under Section 63 of the Electricity Act, 2003. Since SECI conducted the competitive bidding process as the designated Renewable Energy Implementing Agency (REIA), MERC stated that its role was limited to examining the prudence of the procurement rather than redetermining the tariff.
Regarding SECI's trading margin, MERC approved INR 0.07/kWh, subject to the conditions laid down by CERC. The Commission clarified that if SECI fails to provide the prescribed escrow arrangement or an irrevocable, unconditional and revolving letter of credit to the developers, the applicable trading margin would be restricted in accordance with the CERC Trading Licence Regulations.
The approved procurement comprises power from LC Infra Projects (50 MW at INR 2.86/kWh), GH2 Solar (50 MW at INR 2.87/kWh), and Navayuga Green Energy (120 MW at INR 2.87/kWh), with power supply scheduled to commence 24 months from the effective date of the respective PPAs.
MERC also directed the Maharashtra State Transmission Utility (STU) and Maharashtra State Load Despatch Centre (MSLDC) to process applications for grid connectivity, long-term access, scheduling and other operational approvals in accordance with existing regulations. The Commission added that it is in the process of notifying a dedicated regulatory framework governing BESS operations to facilitate integration of storage projects into the state grid.
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