The Uttar Pradesh Electricity Regulatory Commission (UPERC), in a recent order, approved the power sale agreement (PSA), signed by the Uttar Pradesh Power Corporation Limited (UPPCL) with the Solar Energy Corporation of India (SECI) for the purchase of 380 MW of wind power, subject to SECI placing on record the conformity certificate for the power purchase agreement (PPA) signed with Sprng Vaayu Urja (one of the wind generators).
The Commission stated that SECI should sign the PPA with Betam Wind Energy as per the PSA terms. Further, it added that the pooled tariff for the UPPCL would remain the same as per Schedule I for the PSA based on the tariff adopted by the Central Commission.
The state regulator also approved the trading margin of ₹0.07 (~$0.0009)/kWh as agreed by the parties and directed UPPCL to economize the trading margin in the future through mutual agreement.
UPPCL had filed a petition with the Commission to approve the PSA signed to purchase 380 MW of wind power on a long-term basis.
SECI issued a request for selection from wind developers on February 22, 2019, along with the draft PPA and PSA for the setting up of interstate (ISTS) connected wind power projects on a build, own, and operate basis for an aggregate capacity of 1,200 MW (Tranche VII). The reverse auction of 600 MW capacity was carried out on May 14, 2019, and Betam Wind Energy, Ostro Energy, Sprng Vaayu Urja, and Adani Renewable Energy Park Gujarat were declared the winners for 200 MW, 50 MW, 100 MW, and 130 MW respectively.
UPPCL gave the consent to SECI to purchase 380 MW of such power and signed a PSA with SECI on October 01, 2019. SECI filed a petition with the Commission to adopt tariff discovered through competitive bidding, and the Commission adopted the tariff.
After going through the facts, the Commission observed that SECI had requested to adopt the trading margin of ₹0.07 (~$0.0009)/kWh before the Central Electricity Regulatory Commission (CERC). The Commission noted that the PPA provision gave the parties a choice to agree on the trading margin, and the PSA transaction mutually should have been governed by the provisions of the trading license regulations. Accordingly, CERC had not adopted the trading margin.
The Commission noted that the trading margin for the long-term transaction was open to mutual agreement between the contracting parties, and the parties had agreed to a trading margin of ₹0.07 (~$0.0009)/kWh as agreed through the PSA. Accordingly, the Commission approved the trading margin of ₹0.07 (~$0.0009)/kWh.
Further, the Commission noted that UPPCL had submitted the ‘No Deviation Certificate,’ which provided that the PPAs for 50 MW and 130 MW capacity were signed with Ostro Energy and Adani Renewable Energy Park Gujarat per the guidelines laid down by the Ministry of Power. However, the ‘No Deviation Certificate’ was not provided for the other two projects. The Commission directed SECI to record the conformity certificate signed with Sprng Vaayu Urja dated March 16, 2020.
The state regulator also noted that the PPA with Betam Wind Energy was yet to be signed and was similar to the other approved PPAs. However, if SECI could not sign the PPA with Betam Wind Energy, the quantum of power would stand reduced to 280 MW from the earlier 380 MW, and the pooled tariff of ₹2.81 (~$0.038)/kWh would increase. The Commission noted that the pooled tariff as per the signed PSA would remain the same based on the tariff adopted by the Central Commission.
In July last year, UPPCL filed a petition with UPERC seeking it to invalidate a PSA’s cancellation for 300 MW of wind power. The UPPCL had signed a PSA with NTPC Limited for a 350 MW wind power project on March 14, 2019. Of this, 300 MW was by Mytrah Vayu (Amravati) Private Limited, a wind power developer, with whom NTPC signed a PPA on March 25, 2019. The remainder 50 MW was from Srijan Energy Limited, a subsidiary of Continuum Wind Energy.
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Rakesh Ranjan is a staff reporter at Mercom India. Prior to joining Mercom, he worked in many roles as a business correspondent, assistant editor, senior content writer, and sub-editor with bcfocus.com, CIOReview/Silicon India, Verbinden Communication, and Bangalore Bias. Rakesh holds a Bachelor’s degree in English from Indira Gandhi National Open University (IGNOU). More articles from Rakesh Ranjan.