The Uttar Pradesh Electricity Regulatory Commission (UPERC), in a recent order, adopted the levelized tariff of ₹4.53 (~$0.062)/kWh for the purchase of 20 MW (+/-25%) of bagasse-based power. The Commission also approved the power purchase agreements (PPAs) signed between the sugar mills – participants in a tendering process initiated in March 2020 – and the Uttar Pradesh Power Corporation Limited (UPPCL).

UPPCL had filed a petition with the Commission to adopt the tariff of ₹4.53 (~$0.062)/kWh discovered through the competitive bidding process to procure 20 MW of bagasse-based power for ten years and approve the PPAs executed with the parties involved in the bidding process.

Background

The state utility initiated the bidding process to procure bagasse-based cogeneration projects for ten years for meeting its renewable purchase obligation (RPO) targets. The dry fibrous residue left after crushing sugarcane is often used to produce steam for power generation.


The Commission approved the bidding documents, and later UPPCL invited bids for the process. The bidders quoted 18.94 MW as against the requisitioned capacity of 20 MW. Daya Sugar, Saharanpur, quoted the lowest tariff of ₹4.53 (~$0.062)/kWh, and the other four bidders – Balrampur Chini Mills, Gonda; Balrampur Chini Mills, Balrampur; Oswal Overseas, Nawabganj; and Gobind Sugar Mills, Lakhimpur Kheri – were asked to match the lowest tariff. They accepted the levelized tariff of ₹4.53 (~$0.062)/kWh.

On October 17, 2020, the letters of intent were issued to all the successful bidders, subject to the submission of the contract performance guarantee. Later, all the five bidders signed the PPAs with UPPCL.

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Commission’s Analysis

After going through all the documents and the facts, the Commission noted that the proper procedure was followed, and the state distribution company discovered the tariff by conducting the bidding process as per the provisions. The Commission also observed that PPAs were signed in line with the bidding documents. Hence, the state regulator adopted the levelized tariff of ₹4.53 (~$0.062)/kWh as agreed upon by UPPCL.

Earlier, UPERC had approved the amended PPA for bagasse-based power signed between DSCL Sugar, Hariawan, and UPPCL. The Commission had also approved the tariff of ₹4.78 (~$0.067)/kWh in line with the amended PPA.

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