UPERC Adopts Tariff Of 2.98 kWh For Purchase Of 125 MW Of Solar Power

The Uttar Pradesh Electricity Regulatory Commission (UPERC) has adopted the green signal for a new tariff of Rs 2.98/kWh towards the procurement of 125 MW capacity of solar power from grid-connected projects. These projects will be installed as part of the Ministry of New and Renewable Energy’s “Solar Parks and Ultra Mega Solar Power Projects Program” (MNRE).

The Power Purchase Agreement (PPA) between Satluj Jal Vidyut Nigam (SJVN) and the Uttar Pradesh Power Corporation Limited (UPPCL) was also approved by the Commission. The Commission instructed UPNEDA to get permission before modifying the bidding specifications.

The Petition

To purchase 125 MW of solar energy through the Solar Parks and Ultra Mega Solar Power Projects Program, UPNEDA had submitted a petition to accept the tariff.

In Jalaun, Allahabad, Mirzapur, and Kanpur Dehat, MNRE had approved the development of 600 MW of solar projects; however, due to land availability restrictions, this 600 MW project was eventually decreased to 440 MW.

Through Lucknow Solar Power Development Corporation, a joint venture between UPNEDA and the Solar Energy Corporation of India, solar parks are being created (SECI).

The 440 MW project is divided into multiple parts

• 50 MW has been commissioned in the Prayagraj district
• 75 MW in the Mirzapur district
• 40 MW in the Jalaun district of Uttar Pradesh. 

The remaining 275 MW is further divided into 5 parts.

• 50 MW at Gujrai
• 45 MW at Makrechha & Banghauli 
• 75 MW at Gurhah 
• 75 MW at Parasan 
• 30 MW at Tikar 1 & Tikar 2 (30 MW). 

How It Unfolded

UPNEDA invited bids in January 2021 to establish 275 MW of projects in the state’s solar park. REC Power Distribution Company received 125 MW, while SJVN received 75 MW. However, the Letter of Intent provided to RECPDCL was revoked since RECPDCL neglected to submit the contract performance guarantee and sign the PPA within the allotted period.

The canceled 125 MW and the remaining 75 MW capacity that was not previously assigned to be installed in the state’s solar park were then put out to bid by UPNEDA. The maximum rate was set at Rs. 3 per kWh.

Following the 200 MW e-reverse auction in December 2021, 125 MW were given to SJVN at a rate of Rs. 2.98/kWh. A PPA was subsequently negotiated by UPPCL and SJVN to purchase 125 MW of solar energy (75 MW in Jalaun and 50 MW in Kanpur Dehat).

The Commission Order

The Commission noted that UPNEDA had undertaken the bidding procedure without first requesting its consent to deviate from the bidding guidelines. It instructed UPNEDA to require prior authorization for any future deviations of this kind.

It authorised the PPA agreed between the parties on February 3, 2022, as well as the pricing of Rs. 2.98/kWh to purchase 125 MW of solar energy from the projects being developed by SJVN.

To deploy a 50 MW project in Gujrai village in Kanpur district and a 75 MW project in Gurah village in Jalaun district, SJVN has inked an EPC contract with Solarworld Energy Solutions.

The Government of India has also asked the state governments to meet their 25% of power demand via renewable energy. And as solar energy has the major share in the renewable energy segment, it’s obvious that states will focus on the same.