State-run power generation undertaking MahaGenco will soon venture into power trading — buying electricity from solar plants and selling it to state power discom MahaVitaran.
The Maharashtra State Power Generation Company (Mahagenco), which procured a power trading licence from state electricity regulatory commission last month, has proposed to buy solar power from upcoming power projects and sell it to the Maharashtra State Electricity Distribution Company (MahaVitaran).
Being a power generator and deemed licensee, MahaGenco cannot directly buy power without a trading licence.
The trading licence, procured under Category A, allows MahaGenco to annually trade power up to 100 million kilowatt hours (kWh).
Currently, MahaGenco has total generation capacity of 13,602 MW — 10,170 MW thermal, 2,580 MW hydel, 672 MW gas turbine, and 180 MW solar.
An officer from the state energy department told DNA, "Trading licence is crucial since MahaGenco has been appointed by the state government as implementing agency for the ambitious Chief Minister's Solar Agriculture Feeder Programme (CMSAFP). MahaGenco will enter into power purchase agreements (PPAs) with solar power developers of 1,500 MW under the CMSAFP. Thereafter, MahaGenco will sell that power to MahaVitaran."
The officer said the government has proposed total solar generation of 3,000 MW under the Chief Minister's solar feeder programme.
He said that as of now MahaGenco has no plans to trade non-solar power.
Energy expert Ashok Pendse told DNA, "It is a peculiar situation where MahaGenco will have to pay trading margin of 6 to 7 paise per unit to the solar power generator and it will be over and above the basic cost. Ultimately, the power purchase cost will exceed Rs 3 per unit."
He said that MahaVitaran is capable of buying solar power at rates less than Rs 3 per unit.
FLAW IN THE PLAN
Some experts say solar power purchasing agreement (PPAs) could have been signed directly with MahaVitaran, as it would have cut costs. “If there were any technical difficulties in projects, they could have been ironed out with directions from Maharashtra Electricity Regulatory Commission,’’ said Balwant Joshi, MD, Idam Infrastructure Advisory.
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