Diwakar Renewable & Infra Pvt. Ltd. vs Maharashtra Electricity Regulatory Commission & Ors
- Court
- Appellate Tribunal For Electricity
IN THE APPELLATE TRIBUNAL FOR ELECTRICITY
(Appellate Jurisdiction)
Court-1
Appeal No. 220 of 2026 & IA No. 719 OF 2026 & IA No. 718 OF
2026 & IA No. 1051 OF 2026
Appeal No. 103 of 2026 & IA No. 432 OF 2026 & IA No. 434 OF
2026 & IA No. 858 OF 2026
Appeal No. 106 of 2026 & IA No. 444 OF 2026 & IA No. 445 OF
2026 & IA No. 836 OF 2026
Appeal No. 125 of 2026 & IA No. 509 OF 2026 & IA No. 511 OF
2026 AND
Appeal No. 110 of 2026 & IA No. 454 OF 2026 & IA No. 453 OF
2026 & IA No. 805 OF 2026
th
Dated : 5 June, 2026
Present: Hon’ble Ms. Seema Gupta, Officiating Chairperson
Hon’ble Mr. Virender Bhat, Judicial Member
In the matter of:
Appeal No. 220 of 2026 & IA No. 719 OF 2026 & IA No. 718 OF
2026 & IA No. 1051 OF 2026
Diwakar Renewable & Infra Pvt. Ltd.
Through its Accounts Head & Authorised Signatory
th
Office 30 & 31A, 5 floor,
Mahima Trinity Mall, Swej Farm,
New Sanganer Road Jaipur – 302020
Email: [email protected] … Appellant
Versus
1. Maharashtra Electricity Regulatory Commission
Through its Secretary
World Trade Centre, Centre No. 1,
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Appeal No. 220 of 2026 & batch Page 1 of 51
th
13 Floor, Cuffe Parade,
Mumbai - 400005
Email: [email protected]
2. Maharashtra State Electricity Distribution Company Limited
Through its Chief Engineer (Renewable Energy)
th
5 Floor, Prakashgad, Plot No. G-9,
Anant Kanekar Marg, Bandra (E),
Mumbai – 400 051
Email: [email protected]
3. OPG Power Generation Pvt. Ltd.
Through its Managing Director
OPG Nagar, Periya Obulapuram Village,
Nagaraja Kandigai, Madharapakkam Road,
Gummidipoondi, Thiruvallur District,
Tamil Nadu – 601201
Email: [email protected]
4. Mahati Industries Pvt. Ltd.
Through its Managing Director
32/33, Shankarsheth Road,
Pune-411037, Maharashtra
Email: [email protected]
5. ArMee Infotech Limited
Through its Managing Director
ArMee House, 17 Goyal Intercity Row House,
Thaltej Ahmedabad – 380054, Gujarat, India
Email: [email protected]
6. Bhilwara Energy Ltd.
Through its Managing Director
Bhilwara Towers, A-12, Sector-1,
Noida, Uttar Pradesh – 201301
Email: [email protected]
7. Patanjali Ayurved Ltd.
Through its Managing Director
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Appeal No. 220 of 2026 & batch Page 2 of 51
Patanjali Food & Herbal Park,
Village – Padartha, Laksar Road, Haridwar,
Uttarakhand – 249404
Email: [email protected] … Respondent (s)
Counsel for the Appellant(s) : Manish Priyadarshi
for App. 1
Counsel for the Respondent(s) : Ramanuj Kumar
Vishal Binod
Sagnik Maitra
Aditya Dubey
Swadha Sharma
for Res. 2
Appeal No. 103 of 2026 & IA No. 432 OF 2026 & IA No. 434 OF
2026 & IA No. 858 OF 2026
OPG Power Generation Pvt. Ltd.
Through its Assistant Manager
OPG Nagar, Periya Obulapuram Village,
Nagaraja Kandigai, Madharapakkam Road,
Gummidipoondi, Thiruvallur District,
Tamil Nadu – 601201
Email: [email protected] … Appellant
Versus
1. Maharashtra Electricity Regulatory Commission
Through its Secretary
World Trade Centre, Centre No. 1,
th
13 Floor, Cuffe Parade,
Mumbai - 400005
Email: [email protected]
2. Maharashtra State Electricity Distribution Company Limited
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Appeal No. 220 of 2026 & batch Page 3 of 51
Through its Chief Engineer (Renewable Energy)
th
5 Floor, Prakashgad, Plot No. G-9,
Anant Kanekar Marg, Bandra (E),
Mumbai – 400 051
Email: [email protected]
3. Mahati Industries Pvt. Ltd.
Through its Managing Director
32/33, Shankarsheth Road,
Pune-411037, Maharashtra
Email: [email protected]
4. ArMee Infotech Limited
Through its Managing Director
ArMee House, 17 Goyal Intercity Row House,
Thaltej Ahmedabad – 380054, Gujarat, India
Email: [email protected]
5. Diwakar Renewable & Infra Pvt. Ltd.
Through its Managing Director
th
Office 30 & 31A, 5 floor,
Mahima Trinity Mall, Swej Farm,
New Sanganer Road Jaipur – 302020
Email: [email protected]
6. Bhilwara Energy Ltd.
Through its Chairman
Bhilwara Towers, A-12, Sector-1,
Noida, Uttar Pradesh – 201301
Email: [email protected]
7. Patanjali Ayurved Ltd.
Through its Managing Director
Patanjali Food & Herbal Park,
Village – Padartha, Laksar Road, Haridwar,
Uttarakhand – 249404
Email: [email protected]
8. Onward Solar Power Private Limited
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Appeal No. 220 of 2026 & batch Page 4 of 51
Through its Director
th
906, 9 floor, Krishna Apra Business Square
Netaji Subhash Place, Pitampurs,
New Delhi – 110034
Email: [email protected] … Respondent (s)
Counsel for the Appellant(s) : Hemant Singh
Mridul Chakravarty
Biju Mattam
Sourav Roy
Supriya Rastogi Agarwal
Lakshyajit Singh Bagdwal
Ankita Bafna
Harshit Singh
Nehul Sharma
Alchi Thapliyal
Lavanya Panwar
Indrayudh Chowdhury
Devansh Pundir
Sindhuja Rastogi
Mahima Srivastava
Devyanshu Sharma
for App. 1
Counsel for the Respondent(s) : Ramanuj Kumar
Vishal Binod
Sagnik Maitra
Aditya Dubey
Swadha Sharma
for Res. 2
Simranjeet Singh
Gautam Talukdar
Neha Gupta
Rishabh Pant
Arpita Singh
Abhijeet Kumar Pandey
Siddharth Singh Chouhan
Apurbaa Dutta
For Res. 7
Appeal No. 106 of 2026 & IA No. 444 OF 2026 & IA No. 445 OF
2026 & IA No. 836 OF 2026
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Appeal No. 220 of 2026 & batch Page 5 of 51
Onward Solar Power Private Limited
Through its Authorised Representative, (Mr. Durgesh Kumar Gupta)
th
906, 9 floor, Krishna Apra Business Square
Netaji Subhash Place, Pitampura,
New Delhi – 110034
Email: [email protected] … Appellant
Versus
1. Maharashtra Electricity Regulatory Commission
Through its Secretary
World Trade Centre, Centre No. 1,
th
13 Floor, Cuffe Parade,
Mumbai - 400005
Email: [email protected]
2. Maharashtra State Electricity Distribution Company Limited
Through its Managing Director
Hongkong Bank Building, MG Road, Fort,
Mumbai – 400001
Email: [email protected]
3. OPG Power Generation Pvt. Ltd.
Through its Managing Director
OPG Nagar, Periya Obulapuram Village,
Nagaraja Kandigai, Madharapakkam Road,
Gummidipoondi, Thiruvallur District,
Tamil Nadu – 601201
Email: [email protected]
4. Mahati Industries Pvt. Ltd.
Through its Managing Director
32/33, Shankarsheth Road,
Pune-411037, Maharashtra
Email: [email protected]
5. ArMee Infotech Limited
Through its Managing Director
ArMee House, 17 Goyal Intercity Row House,
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Appeal No. 220 of 2026 & batch Page 6 of 51
Thaltej Ahmedabad – 380054, Gujarat, India
Email: [email protected]
6. Diwakar Renewable & Infra Pvt. Ltd.
Through its Managing Director
th
Office 30 & 31A, 5 floor,
Mahima Trinity Mall, Swej Farm,
New Sanganer Road Jaipur – 302020
Email: [email protected]
7. Bhilwara Energy Ltd.
Through its Managing Director
Bhilwara Towers, A-12, Sector-1,
Noida, Uttar Pradesh – 201301
Email: [email protected]
8. Patanjali Ayurved Ltd.
Through its Managing Director
Patanjali Food & Herbal Park,
Village – Padartha, Laksar Road, Haridwar,
Uttarakhand – 249404
Email: [email protected] … Respondent (s)
Counsel for the Appellant(s) : Vishrov Mukerjee
Janmali Gopal Rao Manikala
Girik Bhalla
Ameya Vikram Mishra
Priyanka Vyas
Deepak Thakur
Sai Snigdha Nittala
Snehal Upadhyay
Yashaswi Kant
Pratyush Singh
Damodar Solanki
Juhi Senguttuvan
Anumeha Smiti
Garima Adlakha
for App. 1
Counsel for the Respondent(s) : Ramanuj Kumar
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Appeal No. 220 of 2026 & batch Page 7 of 51
Vishal Binod
Sagnik Maitra
Aditya Dubey
Swadha Sharma
for Res. 2
Simranjeet Singh
Gautam Talukdar
Neha Gupta
Rishabh Pant
Arpita Singh
Abhijeet Kumar Pandey
Siddharth Singh Chouhan
Apurbaa Dutta
Osheen Verma
For Res. 8
Appeal No. 125 of 2026 & IA No. 509 OF 2026 & IA No. 511 OF 2026
Mahati Industries Pvt. Ltd.
Through its Director
32/33, Shankarsheth Road,
Pune-411037, Maharashtra
Email: [email protected] … Appellant
Versus
1. Maharashtra Electricity Regulatory Commission
Through its Secretary
World Trade Centre, Centre No. 1,
th
13 Floor, Cuffe Parade,
Mumbai - 400005
Email: [email protected]
2. Maharashtra State Electricity Distribution Company Limited
Through its Chief Engineer (Renewable Energy)
th
5 Floor, Prakashgad, Plot No. G-9,
Anant Kanekar Marg, Bandra (E),
Mumbai – 400 051
Email: [email protected]
3. ArMee Infotech Limited
Through its Managing Director
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Appeal No. 220 of 2026 & batch Page 8 of 51
ArMee House, 17 Goyal Intercity Row House,
Thaltej Ahmedabad – 380054, Gujarat, India
Email: [email protected]
4. OPG Power Generation Pvt. Ltd.
Through its Assistant Manager
OPG Nagar, Periya Obulapuram Village,
Nagaraja Kandigai, Madharapakkam Road,
Gummidipoondi, Thiruvallur District,
Tamil Nadu – 601201
Email: [email protected]
5. Diwakar Renewable & Infra Pvt. Ltd.
Through its Managing Director
th
Office 30 & 31A, 5 floor,
Mahima Trinity Mall, Swej Farm,
New Sanganer Road Jaipur – 302020
Email: [email protected]
6. Bhilwara Energy Ltd.
Through its Chairman
Bhilwara Towers, A-12, Sector-1,
Noida, Uttar Pradesh – 201301
Email: [email protected]
7. Patanjali Ayurved Ltd.
Through its Managing Director
Patanjali Food & Herbal Park,
Village – Padartha, Laksar Road, Haridwar,
Uttarakhand – 249404
Email: [email protected]
8. Onward Solar Power Private Limited
Through its Director
th
906, 9 floor, Krishna Apra Business Square
Netaji Subhash Place, Pitampura,
New Delhi – 110034
Email: [email protected] … Respondent (s)
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Appeal No. 220 of 2026 & batch Page 9 of 51
Counsel for the Appellant(s) : Hemant Singh
Mridul Chakravarty
Biju Mattam
Sourav Roy
Supriya Rastogi Agarwal
Lakshyajit Singh Bagdwal
Ankita Bafna
Harshit Singh
Nehul Sharma
Alchi Thapliyal
Lavanya Panwar
Indrayudh Chowdhury
Devansh Pundir
Mahima Srivastava
Devyanshu Sharma
for App. 1
Counsel for the Respondent(s) : Ramanuj Kumar
Vishal Binod
Sagnik Maitra
Aditya Dubey
Swadha Sharma
for Res. 2
Simranjeet Singh
Rishabh Pant
Osheen Verma
Abhijeet Kumar Pandey
For Res. 7
Appeal No. 110 of 2026 & IA No. 454 OF 2026 & IA No. 453 OF
2026 & IA No. 805 OF 2026
Bhilwara Energy Ltd.
Through its Authorised Representative-Rani Gupta
(General Manager & Company Secretary)
Corporate Office at:
Bhilwara Towers, A-12, Sector-1,
Noida, Uttar Pradesh – 201301
Email: [email protected] … Appellant
Versus
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Appeal No. 220 of 2026 & batch Page 10 of 51
1. Maharashtra State Electricity Distribution Company Limited
Through its Managing Director
rd
Hong Kong Bank Building, 3 Floor,
M.G. Road, Fort, Mumbai-400001
Email: [email protected]
2. Maharashtra Electricity Regulatory Commission
Through its Secretary
World Trade Centre, Centre No. 1,
th
13 Floor, Cuffe Parade,
Mumbai - 400005
Email: [email protected]
3. OPG Power Generation Pvt. Ltd.
Through its Director
OPG Nagar, Periya Obulapuram Village,
Nagaraja Kandigai, Madharapakkam Road,
Gummidipoondi, Thiruvallur District,
Tamil Nadu – 601201
Email: [email protected]
4. Mahati Industries Pvt. Ltd.
Through its Managing Director
32/33, Shankarsheth Road,
Pune-411037, Maharashtra
Email: [email protected]
5. ArMee Infotech Limited
Through its Managing Director
ArMee House, 17 Goyal Intercity Row House,
Thaltej Ahmedabad – 380054, Gujarat, India
Email: [email protected]
6. Diwakar Renewable & Infra Pvt. Ltd.
Through its Managing Director
th
Office 30 & 31A, 5 floor,
Mahima Trinity Mall, Swej Farm,
New Sanganer Road Jaipur – 302020
Email: [email protected]
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Appeal No. 220 of 2026 & batch Page 11 of 51
7. Onward Solar Power Private Limited
Through its Authorised Representative
(Mr. Durgesh Kumar Gupta)
th
906, 9 floor, Krishna Apra Business Square
Netaji Subhash Place, Pitampura,
New Delhi – 110034
Email: [email protected]
8. Patanjali Ayurved Ltd.
Through its Managing Director
Patanjali Food & Herbal Park,
Village – Padartha, Laksar Road, Haridwar,
Uttarakhand – 249404
Email: [email protected] … Respondent (s)
Counsel for the Appellant(s) : Vijayendra Pratap Singh
Aditya Vikram Jalan
Ankitesh Ojha
Kshitij Pandey
for App. 1
Counsel for the Respondent(s) : Ramanuj Kumar
Vishal Binod
Sagnik Maitra
Aditya Dubey
Swadha Sharma
for Res. 1
Simranjeet Singh
Rishabh Pant
Osheen Verma
Abhijeet Kumar Pandey
For Res. 8
J U D G M E N T
PER HON’BLE MR. VIRENDER BHAT, JUDICIAL MEMBER
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Appeal No. 220 of 2026 & batch Page 12 of 51
1. All the above captioned five appeals arise out of the same order
th st
dated 6 March, 2026 passed by the 1 Respondent – Maharashtra
Electricity Regulatory Commission (hereinafter referred to as “the
Commission”) and involve identical issues. Therefore, these are
being disposed of vide this common judgement.
2. At the outset, we may note that initially we had commenced
hearing on the interim applications filed in these appeals by the
Appellants. However, during the course of arguments on those
applications, it was submitted by the Learned Counsels for the parties
that arguments to be advanced on interim applications are absolutely
identical to the arguments to be advanced for the final disposal of the
appeals and suggestion was made to take up the appeals for final
disposal at this stage itself instead of deciding only the interim
applications. Accordingly, on such suggestion and with the consent
of all the Learned Counsels, we have heard arguments on the main
appeals and are hereby proceedings for to dispose off the appeals
finally vide this judgement.
th
3. The Appellants are aggrieved by the said order dated 6 March,
2026 passed by the Commission in case No. 246 of 2025 filed by the
nd
2 Respondent – Maharashtra State Electricity Distribution Company
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Appeal No. 220 of 2026 & batch Page 13 of 51
Ltd. (in short “MSEDCL”) thereby adopting the tariff for procurement
of capacity from 2000 MW/ 4000 MWh (one cycle) Battery Energy
Storage System (in short BESS) through competitive bidding process
with Viability Gap Funding (in short “VGF”) from Power System
Development Fund (in short “PSDF”) for a period of 15 years.
Description of the Parties :-
4. M/s. OPG Power Generation Private Limited, M/s Mahati
Industries Private Limited and M/s Diwakar Renewable and Infra
Private Limited, the Appellants in Appeal Nos. 103 of 2026, 125 of
2026 and 220 of 2026 respectively are the generating companies.
They had submitted their bids for 900 MW/1800 MWh, 200 MW/400
MWh and 50 MW/100 MWh capacity respectively.
5. M/s Onward Solar Power Pvt. Ltd., Appellant in Appeal No. 106
of 2026 is engaged in the business of development of renewable
energy projects including solar and associated storage projects
including BESS. It had submitted its bid for 50MW/100MWh capacity.
th
With regards to this Appellant, it is relevant to note that on 7 March,
th
2026 i.e. one day prior to the passing of the impugned order dated 8
March, 2026 by the Commission, it had filed additional written
submission before the Commission thereby seeking to withdraw the
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Appeal No. 220 of 2026 & batch Page 14 of 51
offer to take up any capacity under the tender in question. However,
the impugned order does not mention anything about the said offer of
this Appellant.
6. M/s Bhilwara Energy Limited, Appellant in Appeal No. 110 of
2026 is engaged in the business of power generation and energy
storage. It has submitted its bid for 500 MW/1000MWh capacity.
7. Respondent No. 2 – MSEDCL is an entity involved in the
business of distribution of electricity to its consumers in the State of
Maharashtra. The other respondents arrayed in these appeals are the
stake holders/bidders who participated in the bidding process.
Brief conspectus of the facts of the case
8. The facts and circumstances leading to the filing of the instant
appeals by the Appellants have been encapsulated in the following
list of dates and events.
LIST OF DATES
Date Event
10.03.2022 Ministry of Power (MoP), Government of
India announced the “Policy for Guidelines
for Procurement and Utilization of Battery
Energy Storage Systems as part of
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Appeal No. 220 of 2026 & batch Page 15 of 51
Generation, Transmission and Distribution
assets, along with Ancillary Services” to
facilitate procurement of BESS as part
of individual RE power projects or
separately, for addressing the
variability/firming power supply / increasing
energy output / extending the time of supply
from an individual RE project or a portfolio
of RE projects, augmentation of existing RE
Projects and/or to provide ancillary, grid
support and flexibility services for the grid.
09.06.2025 Ministry of Power ( MoP ), Government of
India, issued the Viability Gap Funding
( VGF ) Scheme, wherein the developers of
Battery Energy Storage Systems ( BESS )
are entitled to a funding of up to ₹18 lakh
per MWh, alongwith the subsequent
amendment dated 04.08.2025. As per
Clause 2.5 of the VGF Scheme, the battery
system has to have 2-hour discharge
duration and average 1.5 cycles in a day/ 24
hours. However, the said provision further
mandated that the eligible entity/ distribution
licensee such as MSEDCL can vary the
above configuration qua both, the discharge
duration and number of cycles.
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Appeal No. 220 of 2026 & batch Page 16 of 51
25.07.2025 MSEDCL issued the Request for Selection
dated 25.07.2025 and floated a tender for
procurement of storage capacity from 2000
MW/ 4000 MWh (2 cycle) Batter Energy
Storage System (BESS) through
competitive bidding process with VGF
support from PSDF.
25.07.2025 An addendum dated 25.07.2025 was issued
by MSEDCL for conducting a pre-bid
meeting on 14.08.2025.
07.09.2025 Addendum 2 dated 07.09.2025 was issued
by MSEDCL to the stakeholders, thereby
changing the project configuration i.e.,
setting up of BESS for 2000 MW/ 4000 MWh
(2 cycles) to 1 Cycle.
17.09.2025 Addendum No. 3 dated 17.09.2025, the
Project configuration for the Project was
changed and the changes were
incorporated in the RfS.
23.09.2025
Appellants, participated in the bidding
nd
process floated by the 2 Respondent for
and
25.09.2025
setting up 2000 MW/4000 MWh of BESS
Capacity.
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Appeal No. 220 of 2026 & batch Page 17 of 51
Furthermore, in terms of the conditions of
the RfS, the Appellants submitted requisite
Bank Guarantees also to MSEDCL.
29.09.2025 Addendum No. 4 was issued by MSEDCL
amended Clause 9.1.5 of the RfS and
Clause 4.4.2.4 of the Batter Energy Storage
Supply Agreement ( BESPA ), whereby
annual degradation was expressly
permitted. Further, the above Clause was
amended to acknowledge battery
degradation and provided a minimum
dispatchable energy by the end of each
contract period, and the requirement to
augment or replace the battery system was
deleted.
30.09.2025 Vide Addendum No. 5 dated 30.09.2025,
Clause 4.4.2.4 of the RFS was revised,
wherein the values/ percentage for
consideration of capacity degradation of the
minimum Dispatchable energy to be made
available by the BESSD at the end of a
given year was revised to cover the entire
intended contract period of 15 years.
09.10.2025 Vide Addendum No. 6 dated 09.10.2025,
MSEDCL revised the last date for
submissions technical and financial bids.
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Appeal No. 220 of 2026 & batch Page 18 of 51
17.10.2025 Further, vide Addendum No. 7 dated
17.10.2025, MSEDCL informed the
stakeholders of revision in the billing
methodology for existing projects where co-
located BESS will be installed and
withdrawing the condition mandating DC –
coupled BESS for co-location existing solar
projects.
25.10.2025 The last date of submissions of technical
and financial bids was again revised by
MSEDCL vide Addendum No. 8 dated
25.10.2025.
Nov, 2025 Appellants submitted their respective bids.
04.12.2025 MSEDCL filed a petition seeking approval
on adoption of tariff for procurement of
storage capacity from 2000 MW/ 4000 MHh
(1 Cycle) battery energy storage system
through competitive bidding process (with
VGF support PSDF) under Section 63 of EA
2003 for meeting renewable purchase
obligation (RPO) before the Respondent
Commission.
31.12.2025 Since, as per Clause 2.5 of the VGF
Scheme of the MoP, the battery system has
to have 2-hour discharge duration and
average 1.5 cycles in a day/ 24 hours, and
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Appeal No. 220 of 2026 & batch Page 19 of 51
that the said provision further mandated that
the eligible entity/ distribution licensee such
as MSEDCL can vary the above
configuration qua both, the discharge
duration and number of cycles, MSEDCL
issued a letter dated 26.12.2025 to the MoP
seeking approval of the above deviation
from 1.5 cycles to single cycle.
In response to the above letter, MoP issued
a letter dated 31.12.2025 wherein it stated
that MSEDCL ought to retain the contractual
right to use BESS for at least 6300 cycles
during the contract period without any
additional cost.
06.03.2026 Respondent Commission passed the
impugned order on 06.03.2026, wherein it
held as under:
i. In terms of Section 63 of the Electricity
Act (“ EA 2003 ”), Respondent No. 2 viz.
has conducted the Bidding Process in
accordance with “Guidelines for
Procurement and Utilization of Battery
Energy Storage Systems as part of
Generation, Transmission and
Distribution assets, along with Ancillary
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Appeal No. 220 of 2026 & batch Page 20 of 51
Services” issued by the Ministry of
Power (MOP) for procurement of 2000
MW/4000 MWh BESS;
ii. The reference to 6300 lifecycle cycles
was only a clarification in the context of
VGF eligibility and did not constitute a
mandatory change in the operational
requirements under the Request for
Selection dated 25.07.2025 (“RFS”);
iii. MSEDCL’s proposal for procurement of
storage capacity 2000 MW/4000 MWh
(1 Cycle/day) Battery Energy Storage
System through Competitive Bidding
Process at a tariff of Rs. 1,65,998/- per
MW per month for 15 years is approved.
Letters of Award (LoAs) would be issued by
MSEDCL after tariff adoption, and that the
Battery Energy Storage Purchase
Agreements (BESPA) would be executed
with the selected bidders within a period of
15 days from the date of the order in
accordance with the RfS and the adopted
tariff.
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Appeal No. 220 of 2026 & batch Page 21 of 51
March, 2026 MSEDCL issued LOAs to the Appellants,
thereby awarding the contract capacity to
them for a period of 15 years at Rs.
1,65,998/- (in INR/MW/Month).
st
9. According to the Appellants, stipulation in the letter dated 31
nd
December, 2025 issued by Ministry of Power, Govt. of India to 2
Respondent – MSEDCL after the submission of financial bids, asking
MSEDCL to retain contractual right of BESS for at least 6300 cycles
during the contract period without any additional cost, vitiates the
entire bidding process as the said stipulation is contrary to the
th
relevant clauses of the Request for Selection (RFS) dated 25 July,
2025 issued by MSEDCL as well as the addendum to the same
issued subsequently. It is also their grievance that the Commission,
in the impugned order, has failed to clarify the actual tariff which
MSEDCL is liable to pay to the successful bidders.
10. We have heard Mr. Sajan Poovayya, Learned Senior Counsel,
Mr. Vishrov Mukherji, Learned Counsel, Mr. Hemant Singh, Learned
Counsel and Ms. Manish Priyadarshi, Learned Counsel for the
Appellants and Mr. B.P. Patil, Learned Senior Counsel along with
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Appeal No. 220 of 2026 & batch Page 22 of 51
nd
Ms. Pratiti Rungta, Learned Counsel for the 2 Respondent –
MSEDCL.
Our Analysis :-
th
11. Ministry of Power, Govt. of India issued a VGF scheme on 9
July, 2025 whereunder the developers of BESS are entitled upto
Rs.18 lakhs per MWh. Clause 2.5 of the scheme is relevant and is
extracted herein below:-
“2.5 Storage Duration : The BESS capacity should
preferably be with 2-hour discharge duration and average
1.5 cycles in a day i.e. within 24 hour period. However, the
Eligible Entity may vary the duration, no of cycles as
required.”
12. Thus, as per said clause the battery system ought to have two
hour discharge duration with average 1.5 cycles in a day/ 24 hours.
The clause further authorized the eligible entity/distribution licensee
i.e. MSEDCL to vary the duration/number of cycles as per its
requirement.
th
13. MSEDCL issued RFS on 25 July, 2025 and floated tender for
procurement of storage capacity from 2000 MW/4000 MWh (two
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Appeal No. 220 of 2026 & batch Page 23 of 51
cycle) BESS through the competitive bidding process with VGF
support from PSDF. Clause 1.2 of the RFS indicates that proposals
were invited by MSEDCL for setting up BESS with double storage
capacity of 2000 MW/4000 MWh (two hour discharge, two cycle per
day). This would mean that there would be 5475 cycles during the
contract period of 15 years and in case the successful bidders are
able to achieve the same they would be entitled to VGF. For the sake
of reference, the said clause 1.2 of RFS is extracted herein below:-
“1.2 Under this RfS, the BESSD shall be required to set
up a Battery Energy Storage System (BESS), with the
primary objective of making the energy storage facility
available to MSEDCL for charging/discharging of the
BESS, on an “on demand” basis. MSEDCL seeks to utilize
energy storage systems, on a “On-Demand” basis, suited
to the requirements of the State DISCOMs during the peak
and off-peak hours.
In view of the above, MSEDCL invites proposals for setting
up Battery Energy Storage Systems (BESS), connected to
-------------------------------------------------------------------------------------------------------------
Appeal No. 220 of 2026 & batch Page 24 of 51
the STU, with a total storage capacity of 2000
MW/4000MWh (2 hour discharge, 2 cycles per day).”
14. Clause 6.1 of the RFS provides that the selected developers
were eligible for financial support under VGF scheme with maximum
VGF of Rs.18 lakhs per MWh in accordance with the guidelines
th
issued by Ministry of Power, Govt. of India dated 9 June, 2025. It
further requires the eligible bidder to submit the Bank Guarantee of
value equal to the eligible VGF, prior to its release to the developer
which would be liable for encashment in the event of non-fulfillment
of scheme conditions specified in the bidding documents.
15. Clause 9.1(5) of RFS provides that successful bidder has to
ensure the contracted capacity throughout the contractual period by
compensating for any degradation, augmentation or replacing so that
the contracted energy remains unaffected. Thus, while quoting the
financial bids, the bidders have to factor in the required battery
augmentations to take care of the battery degradation.
16. Thereafter, addendum No. 2 to RFS was issued by MSEDCL
th
on 7 September, 2025 thereby changing the project configuration
i.e. setting up of BSES for 2000 MW/4000MWh (two cycles) to 2000
MW to 4000 MWh (one cycle).
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Appeal No. 220 of 2026 & batch Page 25 of 51
th
17. On 29 September, 2025, addendum No. 4 to RFS was issued
by MSEDCL thereby revising the last date for submission of technical
th
and financial bids to 10 October, 2025 and further amending clause
9.1.5 as well as clause 4.4.2.4 of the draft Battery Energy Storage
Purchase Agreement (BESPA). The amendments were incorporated
in the RFS as well as BESPA to acknowledge battery degradation
and to provide a minimum dispatchable energy by the end of each
contract period and the requirement to augment or replace the battery
system was deleted. However, the provision for entitlement of the
successful bidder for fixed capacity charges remained unchanged
meaning thereby that the successful bidder would be entitled to the
quoted fixed capacity charge in INR/MW/month with respect to
original allocated/contracted battery capacity irrespective of battery
degradation.
18. Clause 4.4.2.4 of BESPA was revised again vide addendum
th
No. 5 of 30 September, 2025 wherein the values/percentage for
consideration of capacity degradation of the minimum dispatchable
energy to be made available by the BESS developers at the end of
given year was revised to cover the entire intended contract period of
15 years.
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Appeal No. 220 of 2026 & batch Page 26 of 51
19. The last date for submission of technical and financial bids was
th
revised vide addendum No. 6 of 9 October, 2025 and vide
th
addendum No. 7 dated 17 October, 2025, the stake holders were
intimated about the revision in billing methodology for existing
projects where co-located Battery Energy Storage System will be
installed and withdrawing the condition mandating DC-coupled BESS
for co-location existing solar projects.
20. The last date for submission of technical and financial bids was
th
again revised vide addendum No. 8 dated 25 October, 2025 to
31/10/2025. As per this addendum, the technical bids were to be
opened on 03.11.2025.
21. Accordingly, bearing these terms and conditions of the RFS in
mind, the Appellants participated in the bidding process floated by the
MSEDCL for setting up of the BESS capacity and also submitted the
requisite Bank Guarantees.
rd
22. Technical Bids were opened on 3 November, 2025 and it was
found that 46 entities had submitted their bids for an aggregate
capacity of 11,110 MW/22,220 MWh which was far exceeding the
th
tendered capacity. Subsequently, financial bids were opened on 4
November, 2025. In accordance with the RfS clause disqualifying
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Appeal No. 220 of 2026 & batch Page 27 of 51
bidders quoting the highest effective capacity charges when more
than five bids are received, two bidders were disqualified. Reverse
th
e-auction was conducted on 5 November, 2025 under L1
methodology to discover the lowest tariff.
23. Lowest tariff discovered under part -A was Rs.1,65,998/- per
MW per month while under part-B it was Rs.1,76,100 per MW per
month . Since part-B tariff was significantly higher and the bidders
declined to match the part-A L1 rate, entire 500 MW under part-B was
cancelled and merged into part-A, revising part-A capacity to 2000
MW. It appears that after the auction, the additional bidders including
the Appellants requested L1 matching by way of emails but only 1200
MW was accommodated based on chronological order on receipt and
eligibility verification.
24. Accordingly, the final allocation was made under Part-A
aggregating to 2000 MW/4000 MWh at the discovered lowest tariff of
Rs.1,65,998/- per MW per month.
nd
25. Thereafter, the 2 Respondent – MSEDCL approached the
Commission by way of petition No. 246 of 2025 seeking approval of
the discovered tariff and adoption of competitive bidding outcome for
procurement of said BESS capacity as under :-
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Appeal No. 220 of 2026 & batch Page 28 of 51
Sr.
No.
Bidder Name Capacity in MW Bid Offer
in
Gurante
ed
Round-
trip
Efficienc
y (RtE)
Effective
Capacity
charges
payable to the
bidder in
As
per
e-RA
As per
L1
matchi
ng
Total
capa
city
Rs./MW/M
onth
% Rs./MW/Month
1 Mahati Industries
Private Limited
100 100 200 1,65,998 0.85 1,65,998
2 Armee Infotech
Limited
150 0 150 1,65,998 0.85 1,65,998
3 Diwakar
Renewable & Infra
Pvt. Ltd.
50 0 50 1,65,998 0.85 1,65,998
4 Bhilwara Energy
Limited
500 200 700 1,65,998 0.85 1,65,998
5 OPG Power
Generation Private
Ltd.
0 800 800 1,65,998 0.85 1,65,998
6 Patanjali Ayurved
Limited
0 100 100 1,65,998 0.85 1,65,998
Total (Part-A) 2000
26. The petition was disposed off by the Commission vide
th
impugned order dated 6 March, 2026 thereby approving the
proposal of MSEDCL for procurement of storage capacity 2000 MW/
4000 MWh (one cycle per day) Battery Energy Storage System
through competitive bidding process at a tariff of Rs.1,65,998 per MW
per month for 15 years. The impugned order further provides that
MSEDCL shall execute Battery Energy Storage Purchase Agreement
(BESPA) with the successful bidder within 15 days from the date of
order.
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Appeal No. 220 of 2026 & batch Page 29 of 51
27. It is pertinent to note here that during the pendency of the
petition before the Commission, MSEDCL appears to have realized
that as per clause 2.5 of the VGF scheme of the Ministry of Power,
Government of India, the battery system has to have two hour
discharge duration and average 1.5 cycles in a day/24 hours and this
clause further authorized the eligible entity/distribution licensee i.e.
MSEDCL to vary the above configuration qua both in the discharge
duration as well as number of cycles, it accordingly issued a letter
th
dated 26 November, 2025 to Ministry of Power seeking approval of
the above deviation from 1.5 cycle to single cycle. In response to the
st
same, Ministry of Power, Government of India issued letter dated 31
December, 2025 wherein it concurred with the request of
MSEDCL for change of number of cycles from 1.5 cycles per day to
1 cycle per day subject to the condition that MSEDCL should retain
the contractual right to use BESS for at least 6300 cycles during the
contract period without any additional cost. Since the grievance of the
Appellants in these appeals is founded upon the said letter of Ministry
of Power, Government of India, we find it apposite to extract its
contents hereunder :-
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Appeal No. 220 of 2026 & batch Page 30 of 51
“F.No. 48-15/24/2025-NRE SECTION
Government of India
Ministry of Power
(NRE Section)
Shram Shakti Bhawan
Rafi Marg, New Delhi-110001
Dated the 31st Dec. 2025
To
Chief Engineer (RE),
MSEDCL.
Subject: Request for approval regarding revision of
cycles in 2000 MW/ 4000 MWh BESS project to be set
up in Maharashtra under the VGF Scheme supported
through PSDF - reg.
(Ref: MSEDCL letter No. CE/RE/BESS/MoP No. 42176)
Sir,
I am directed to refer to MSEDCL's letter dated 26.12.2025
on the above subject and to convey that the request made
regarding deviation from existing guidelines to operate
from 1.5 cycles to single-cycle per day operation for the
2,000 MW / 4,000 MWh BESS project being implemented
by MSEDCL under the VGF scheme supported through
PSDF has been concurred by the Ministry subject to the
condition that MSEDCL, the procurer, should retain the
contractual right to use BESS for at least 6300 cycles
during the contract period without any additional cost.
This issues with the approval of competent authority.
Yours faithfully,
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Appeal No. 220 of 2026 & batch Page 31 of 51
(Vishal Kumar)
Under Secretary to the Government of India,
Email: [email protected]
Copy to:
1. Chairperson, CEA.
2. Principal Secretary (Energy), Govt. of Maharasthra.
3. CMD, MSEDCL
4. CMD, Grid India”
28. It is argued on behalf of the Appellants that the said letter issued
by Ministry of Power, Government of India makes their financial bids
unviable for the reason that the letter was issued much after the
submission of technical/financial bids by the bidders and imposed an
obligation upon the bidders to upgrade BESS for 6300 cycles during
the contract period which is contrary to what was proposed in the RfS
as well as in draft BESPA. It is submitted that such additional
obligation does not leave any sanctity to the quoted tariff in the bids
as the same was quoted for single cycle per day.
29. The discussion of the Commission in the impugned order with
st
regards to the said letter dated 31 December, 2025 issued by
Ministry of Power, Government of India and the objections raised in
this regard by the Appellant is extracted herein below :-
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Appeal No. 220 of 2026 & batch Page 32 of 51
“25. Issue (4): Increase in operating cycles.
25.1. Respondents and Intervener strongly opposed the
enhancement of the lifecycle requirement from 5,475
cycles (1 cycle per day over 15 years) to approximately
6,300 cycles, pursuant to the Ministry of Power's letter
dated 31 December 2025. It is contended that RfS and the
bidding documents clearly contemplated the operation of
the BESS at one cycle per day over a 15-year contract
period, which formed the basis for bid structuring.
Accordingly, bidders factored in battery degradation,
lifecycle performance, augmentation planning, and
financing assumptions. Any post-bidding increase in
minimum cycles during the contract period should alter the
technical and financial assumptions of the bid, and the
same should not be allowed.
25.2. MSEDCL, in its reply on this issue, clarified that RFS
explicitly envisaged BESS projects with two hours of
discharge and one cycle per day. Bid conditions and terms
of the RfS remain unchanged. Regarding the 6300-cycle
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Appeal No. 220 of 2026 & batch Page 33 of 51
reference, it is from MoP's letter dated 31 December 2025,
in which the MoP clarified that it is a contractual right (not
a mandatory obligation) to use BESS for at least 6300
cycles during the contract period. Therefore, there is no
merit to the concerns raised by concerned bidders on this
issue. Additionally, the condition mentioned pertains to
VGF eligibility and is not part of the current proceedings.
25.3. In this regard, the Commission notes that the present
bidding process for 2000MW/4000MWh has clearly
specified 1 cycle/day and viability gap funding through
PSDF. The Commission, in its earlier Order dated 31
December 2025, has approved the RfS with these
conditions. Considering a 15-year contract period, 6300
cycles over that period exceed the 1 cycle/day stipulation
in the RfS. On perusal of MoP's letter dated 31 December
2025, it is observed that said letter was in reply to
MSEDCL's proposal to consider 1 cycle/day, which is in
line with the RfS document. Relevant part of the MoP letter
is reproduced below:
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Appeal No. 220 of 2026 & batch Page 34 of 51
"I am directed to refer to MSEDCL's letter dated
26.12.2025 on the above subject and to convey that
the request made regarding deviation from existing
guidelines to operate from 1.5 cycles to single-cycle
per day operation for the 2,000 MW/4,000 MWh
BESS project being implemented by MSEDCL under
the VGF scheme supported through PSDF has been
concurred by the Ministry subject to the condition
that MSEDCL, the procurer, should retain the
contractual right to use BESS for at least 6300 cycles
during the contract period without any additional
cost."
Thus, while allowing MSEDCL's request for single-cycle-
per-day operation of BESS, MOP has imposed a condition
that MSEDCL retain the contractual right to use BESS for
at least 6300 cycles during the contract period. MSEDCL,
in its reply, has stated that such contractual rights should
not be considered mandatory obligations for bidders, and
hence, there is no change to the RfS conditions.
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Appeal No. 220 of 2026 & batch Page 35 of 51
25.4. The above MoP letter is related to VGF funding under
PSDF. Respondents have apprehension about the non-
availability of VGF if they do not meet the 6300 cycles
condition, and their quoted tariff becomes financially
unviable. Had MSEDCL received such clarification before
the bid submission, bidders would have had the
opportunity to appropriately factor this condition into their
financial calculations. Now, after the bidding process,
imposing such a new condition would vitiate the bidding
process itself. MSEDCL also would not like to do so,
considering the urgent need of BESS to manage the
increasing penetration of RE sources, and hence, in its
Reply, MSEDCL has clearly stated that there is no change
in the RfS condition, and the condition of 6300 cycles is
just a contractual provision and will not be obligatory on
successful bidders. By relying on MSEDCL's submission,
the Commission rules that there is no change to the RfS
condition for a single cycle per day; accordingly, the tariff
adopted above will remain the same. The Commission
also directs MSEDCL to extend all its support to successful
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Appeal No. 220 of 2026 & batch Page 36 of 51
bidders complying with RfS conditions to avail VGF under
PSDF.”
30. Learned Counsel appearing for the Appellants vehemently
st
argued that the letter dated 31 December, 2025 issued by Ministry
of Power, Government of India effectively changed the substantial
part of the RfS, which the bidders could not have factored at the time
of submitting of the bids and the Commission failed to consider that
even if MSEDCL does not insist for 6300 cycles during the contract
period and accepts single cycle per day under the BESPA (i.e. 5475
cycles during contract period), the successful bidders will not be
eligible for VGF from the Ministry of power. It is submitted that the
same goes to the root of the financial bids submitted by the bidders
including the Appellants as without the VGF support the tariff quoted
has become unviable due to introduction of above condition.
31. On the other hand, it is argued on behalf of MSEDCL that the
st
contents of the letter dated 31 December, 2025 issued by Ministry
of Power, Government of India do not explicitly or impliedly changed
the bid conditions and terms stated in the RfS which have to be
complied with by the successful bidders including the Appellants.
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Appeal No. 220 of 2026 & batch Page 37 of 51
32. With regards to the retention of contractual rate to use BESS
for at least 6300 cycles during the contract period, as envisaged in
st
the letter dated 31 December, 2025 of Ministry of Power, it is
submitted that the letter does not make it mandatory for the bidders
to use BESS for at least 6300 cycles during the contract period and it
is only a contractual right conferred upon MSEDCL. It is argued that
allocation of capacities to the successful bidders is governed by the
terms and conditions contained in the RfS as well as BESPA, which
have remained unchanged and, therefore, the grievance of the
Appellants in these appeals is baseless and after thought.
33. During the course of hearing of the appeals, Learned Senior
Counsel appearing for MSEDCL produced a copy of communication
th
dated 9 February, 2026 sent in this regard by Ministry of Power,
Government of India to the Chairman, UPPCL (Uttar Pradesh Power
Corporation Limited) wherein it has been clarified as under :-
“3. It is further clarified that commercially available LFP
batteries currently offer a cycle life of approximately 8,000
cycles. Under a single-cycle-per-day operating regime,
only about 4,200 cycles would be utilised over a 12-year
contract period, leading to sub-optimal utilisation of the
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Appeal No. 220 of 2026 & batch Page 38 of 51
asset despite payment of the full cost. Accordingly, it was
suggested that the State/UPPCL shall retain the
contractual right to utilise at least 6,300 cycles during the
project tenure, thereby enabling flexibility to address any
additional operational requirements that may arise during
the contract period. However, this provision confers only a
right and does not mandate UPPCL to utilise 6,300 cycles.”
nd
34. It is further submitted that vide communication dated 2 March,
2026 sent in this regard by the Ministry of Power, Government of India
to Chief Engineer (Commercial), MSEDCL, reference has been made
th
to above noted communication dated 9 February, 2026 addressed
to Chairman, UPPCL to state that the clarification issued to UPPCL
regarding retention of contractual right for utilization of at least 6300
cycles of BESS during the contract period is applicable to MSEDCL
also. The relevant portion of the said letter is extracted hereinbelow:-
“2. It is informed that Ministry of power, vide letter dated
09.02.2026, issued a clarification to UPPCL regarding
retention of the contractual right for utilization of at least
6300 cycles of the BESS during the contract period, with a
copy endorsed to CMD, MSEDCL. Accordingly, the
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Appeal No. 220 of 2026 & batch Page 39 of 51
clarification issued to UPPCL is also applicable to
MSEDCL.”
35. Learned Senior Counsel would, accordingly, submit that with
the clarification issued by Ministry of power itself, the apprehensions
raised by the Appellant that they may not get VGF support in case
they don’t achieve 6300 cycles during the contract period vanish in
thin air and do not survive at all.
36. Further, the Learned Senior Counsel appearing for MSEDCL
also sought to allay the apprehensions of the Appellants with regard
to their inability to receive VGF in case they are unable to achieve
6300 cycles during the contract period, by saying that in case the
Ministry of power does not provide the VGF support to the Appellants,
MSEDCL undertakes to do so on its own. He produced a print out of
th
email dated 29 May, 2026 sent in this regard by Chief Engineer,
Renewable Energy , MSEDCL to Advocate, Vishal Binod
representing MSEDCL wherein it is stated as under :-
“1. MSEDCL humbly submits that it has received
appropriate clarifications from Ministry of power that the
BESSDs will be eligible for grant of VGF under MoP's
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Appeal No. 220 of 2026 & batch Page 40 of 51
VGF Scheme notwithstanding the fact that the RfS and the
Draft BESPA mandate a single cycle per day supply
(equivalent to 5475 cycles over the 15 years BESPA term)
as opposed to 6300 cycles, subject to the BESSD fulfilling
other applicable conditions of the VGF scheme and as per
the provisions of RfS & BESPA.
2. Without prejudice to the aforesaid submission, MSEDCL
undertakes that it will pay the applicable VGF amount to
the BESSDs (subject to fulfilment of other conditions of the
VGF scheme and as per the provisions of RfS & BESPA)
in case such VGF is denied by MoP solely on the ground
that the BESSDs are not required to operate 6300 cycles
over the BESPA term. It is clarified that MSEDCL shall not
be liable to pay any VGF in case the BESSD is deemed
ineligible to claim VGF for any other reason whatsoever.”
37. It is, thus, the submission of the Learned Senior Counsel that
the primary grievance of the Appellants raised in these appeals has
been take care of and, therefore, there is now no impediment in their
way in executing BESPA.
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Appeal No. 220 of 2026 & batch Page 41 of 51
38. We are unable to countenance the submissions made by the
nd
Learned Senior Counsel for the 2 Respondent – MSEDCL.
Concededly, as per the RfS document issued by the MSEDCL as
th
amended vide addendum No. 2 dated 7 September, 2025,
proposals were invited for setting up of BESS with total discharge
capacity of 2000 MW/4000 MWh having two hour discharge duration
with average 1 cycle per day. This would indicate that there would be
5475 cycles during the contract period of 15 years and in case
successful bidders are able to achieve the same, they would be
entitled to VGF up to Rs.18 lakhs per MWh as per VGF scheme
th
issued by Ministry of Power, Government of India on 9 June, 2025.
st
However, the contentious communication dated 31 December, 2025
addressed by Ministry of Power, Government of India to Chief
Engineer, MSEDCL, the contents of which have been extracted in
paragraph No. 27 herein above, mandates MSEDCL to retain the
contractual right the use BESS for at least 6300 cycles during the
contract period without any additional cost.
st
39. Notably, the said communication dated 31 December, 2025 of
the Ministry of power has come much after the last date for
rd
submission of technical/financial bids which was 3 November, 2025.
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Appeal No. 220 of 2026 & batch Page 42 of 51
Even the draft BESPA circulated amongst the bidders provides in
Article 4.4.1 that during a day in a contract year, the developer of
BESS shall not be asked as well as the developer shall not be allowed
the schedule for more than 1 cycle per day.
40. What is evident is that the bidders including the Appellants
submitted their technical as well as financial bids with the impression
that they would neither be required nor asked to schedule charging
of BESS for more than one cycle per day aggregating to 5475 cycles
during the contract period of 15 years. Despite such stipulations in
st
the RfS document as well as in the draft BESPA, the letter dated 31
December, 2025 of Ministry of power has mandated MSEDCL to
retain its contractual right to use BESS for at least 6300 cycles during
the contract period without any additional cost. The language of the
said letter clearly reveals that the Ministry of power approved the
revision of cycles from 1.5 cycles per day to single cycle per day for
2000 MW/4000MWh BESS project subject to the condition that
MSEDCL shall retain the contractual right to use BESS for at lease
6300 cycles during the contract period. Therefore, it a conditional
approval only and in case MSEDCL violates the condition, the
approval given by the Ministry of power for revision of cycles would
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Appeal No. 220 of 2026 & batch Page 43 of 51
become otiose. MSEDCL has no other option except to incorporate a
clause in the contract i.e. BESPA to the effect that BESS may be used
for at least 6300 cycles during the contract period. Once that is done
and such a clause is incorporated in the BESPA to be executed with
the successful bidders including the Appellants, there is no guarantee
that the MSEDCL would not exercise this right during any year in the
contract period. In case, for whatever reasons, MSEDCL chooses to
exercise its right to use BESS for atleast 6300 cycles during the
contract period, it would not only be detrimental to the rights and
expectations of the Appellants but also contrary to the terms and
conditions of the RfS document upon which the Appellants submitted
their bids. No undertaking has come on record on behalf of MSEDCL
that such a clause would not be incorporated in the BESPA.
41. Manifestly, this letter introduces a new condition and as well as
requirement for the successful bidders to use BESS for at least 6300
cycles during the contract period which is contrary to the terms and
conditions contained in the RfS document as well as draft BESPA in
this regard. Such requirement is a clear deviation from the obligations
cast upon the bidders in the RfS document and therefore, is not
permissible. It is a trite law that goal post cannot be re-arranged are
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Appeal No. 220 of 2026 & batch Page 44 of 51
asked to be re-arranged after the bidding process is complete to the
prejudice of the rights of the bidders. Once the bidding process is
complete i.e. after the evaluation of technical/commercial bids lowest
tariff is discovered and the petition is filed before the Commission for
adoption of tariff, it is not open for the procurer i.e. MSEDCL to
change the number of cycles to be achieved by the successful
bidders per day.
42. The apprehension of the Appellants i.e. in case they are unable
to achieve 6300 cycles during the contract period of 15 years they
would not get VGF support, is not ill-founded. Such apprehension
st
stems out of the clear stipulation in the letter dated 31 December,
2025 of the Ministry of power mandating MSEDCL to retain
contractual right to use BESS for at least 6300 cycles during the
contract period. Once such right is retained by MSEDCL by
incorporating a clause in the contract i.e. BESPA, it can be exercised
by MSEDCL at any point of time during the contract period. In case
MSEDCL, at any point of time during the contract period of 15 years,
choose to enforce said clause of BESPA and the Appellants would
not be able to achieve the minimum threshold of 6300 cycles, the
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Appeal No. 220 of 2026 & batch Page 45 of 51
consequences of not achieving the same would fall on Appellant
which can include refund of VGF support so received.
43. The said letter of Ministry of power effectively changes the
substantial as well as essential requirement under the RfS document
which the bidders could not have factored in at all at the time of
submitting the bids. The Appellants would not only have to incur
additional expenditure to upgrade the BESS for achieving 6300
cycles without having any right to seek enhancement in the
discovered tariff on account of such additional expenditure or face
consequences, which may include return of VGF support obtained
from Ministry of power in case they fail to achieve such number of
cycles during the contract period.
44. We do not feel impressed by the submission on behalf of the
MSEDCL that the clarifications issued by Ministry of power vide
th
communication dated 9 February, 2026 to Chairman, UPPCL and
nd
dated 2 March, 2026 to Chief Engineer (Commercial) MSEDCL
allays the apprehensions of the Appellants as it has been clarified in
this communications that only a right is conferred upon MSEDCL to
utilize at least 6300 cycles of BESS during the project tenure and
does not mandate MSEDCL to do the same. Once the MSEDCL is
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Appeal No. 220 of 2026 & batch Page 46 of 51
mandated to retain the contractual right to utilize at least 6300 cycles
during the contract period, such term in the contract may be enforced
nd
by MSEDCL any time during the contract period e.g. in the 2 year,
rd th
3 year or 4 year and so on. These communications no where say
that clause regarding utilization of BESS for atleast 6300 cycles
would never be enforced or the successful bidders would not be
deprived of VGF support or to face consequences in case they do
not achieve 6300 cycles during the contract period.
45. With regards to the undertaking on behalf of MSEDCL to
compensate the Appellants in case they are not provided VGF
support by the Govt. of India, as conveyed by the Learned Senior
Counsel for MSEDCL during the course of arguments, it would be
suffice to say that neither can any sanctity be attached to such
undertaking nor is the same enforceable. This undertaking has been
made by the Learned Senior Counsel on the basis of email received
from Chief Engineer (Renewable Energy) MSEDCL who, apparently,
is not the decision making authority in this regard. There is nothing to
show in this email that the Board of Directors of MSEDCL has
consented and supported such offer. Further, there ought to have
been regulatory approval also for such huge spending by the
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Appeal No. 220 of 2026 & batch Page 47 of 51
MSEDCL without which it would be unable to recover the same from
consumers. Evidently, no such regulatory approval has been taken
for the same.
46. We are of the considered opinion that change in the number of
cycles to be achieved by a successful bidder introduced by way of
st
letter dated 31 December, 2025 of the Ministry of Power,
Government of India tentamounts to a clear deviation from the terms
and conditions of the RfS document as well as draft BESPA and the
same having been communicated much after the submission of
technical/commercial bids by the bidders, vitiates the entire bidding
process.
47. It is true that no alteration has been actually carried out in the
terms and conditions of the RfS document on the basis of which bids
were submitted by the Appellants but it is equally true that
incorporation of a new clause in the BESPA to the effect that
MSEDCL would have right to use BESS for atleast 6300 cycles during
the contract period, would impliedly tantamount to change in the
terms and conditions of the RfS document which invited proposals for
setting up of BESS with total discharge capacity of 2000 MW/4000
MWh with average one cycle per day. Ever though, there would be
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Appeal No. 220 of 2026 & batch Page 48 of 51
no explicit change in the terms and conditions of the RfS document
yet, by virtue of such clause in BESPA, MSEDCL may chose to
exercise its right to use BESS for minimum 6300 cycles during the
contract period which would not only put the Appellants in a
detrimental position but also would be in contravention of the terms
and conditions of the RfS document. As such this would manifestly
tantamount to changing the rules of the game after the game has
commenced which is not permissible.
48. The clarification issued by Ministry of power vide
th
communication dated 9 February, 2026 sent to Chairman, UPPCL
nd
and reiterated a communication dated 2 March, 2026 send to Chief
Engineer, MSEDCL does not come to the aid of MSEDCL at all. To
the contrary, such clarification and the reasons for the same, advance
the case of the Appellants. In these communications, Ministry of
power has clarified that under single cycle per day operating regime,
only the 4200 cycles would be utilized over the 12 year contract
period leading to sub-optimal utilization of the asset despite payment
of full cost and accordingly mandated UPPCL as well as MSEDCL to
retain contractual right to utilize the asset for atleast 6300 cycles
during the project tenure. This is indicative of the fact that if, at any
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Appeal No. 220 of 2026 & batch Page 49 of 51
point during the project tenure, Ministry of power or MSEDCL finds
that the asset is not being utilized to its full potential, the developers
of BESS i.e. the Appellants would be mandated to utilize the same
for atleast 6300 cycles during the contract period with no additional
costs. As a sequitur, in case, the Appellants would not be able to
achieve 6300 cycles during the contract period, they would either be
deprived of the VGF support as promised by the Ministry of power in
VGF guidelines or face consequences.
49. The Commission, while passing the impugned order, has
overlooked these possible scenarios which were not only be
prejudicial to the rights and interests of the Appellants but also
contrary to the terms and conditions of the RfS document. Therefore,
we are unable to sustain the impugned order of the Commission. The
tariff discovered under the bidding process ought not to have been
approved vide the impugned order by the Commission as the bidding
process had got vitiated by introduction of a new condition much after
the completion of the bidding process.
50. Hence, we hereby set aside the impugned order and quash the
bidding process. The letters of Intent (LOI), if any, issued to the
Appellants in pursuance to the acceptance of their bids are also
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Appeal No. 220 of 2026 & batch Page 50 of 51
quashed. We direct MSEDCL to return the security deposit to the
Appellants within four weeks from the date of the receipt of this
judgement. The Bank Guarantees submitted by the Appellants be
also returned within the same period.
51. All the appeals stand allowed in these terms.
th
Pronounced in the open court on this 5 June day of June, 2026.
(Virender Bhat) (Seema Gupta)
Judicial Member Officiating Chairperson
✓
REPORTABLE / NON REPORTABLE
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Appeal No. 220 of 2026 & batch Page 51 of 51