Uttar Pradesh Approves Tariffs for 72 MW of Solar Projects by Sukhbir Agro and NTPC

The Uttar Pradesh Electricity Regulatory Commission (UPERC) has adopted a tariff of ₹3.02 (~$0.040)/kWh for NTPC’s two solar projects of 20 MW each. These two projects are located at Itawah and Rihand. The Commission also approved ₹3.05 (~$0.041)/kWh as the tariff for a 32 MW solar project developed by Sukhbir Agro at Jalaun.

It had approved the power purchase agreements (PPAs) signed by the solar power producers and the Uttar Pradesh Power Corporation Limited (UPPCL) on February 27, 2020.

The Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA) and UPPCL had filed a joint petition with UPERC seeking the adoption of the tariffs to procure 72 MW of solar projects for 25 years.

Background


UPPCL had authorized UPNEDA to carry out the bidding process to procure 500 MW of power from grid-connected solar power projects under Phase-III of the state’s Solar Energy Policy 2017. Accordingly, UPNEDA invited bids in January 2019.

UPERC had fixed the tariff ceiling of ₹3.05 (~$0.041)/kWh for the entire term of the PPA. The bidders were allowed to develop solar projects under self-identified and owned lands after the approval of the tariff.

In response to the tender, bids for a cumulative capacity of only 90 MW were received against the total capacity of 500 MW. NTPC quoted for 40 MW, and Sukhbir Agro for 50 MW. As per the request for proposal, if the aggregate capacity of techno-commercial responsive bids were less than 500 MW, only 80% of the total would be allocated. In the e-reverse auction that ensued for 72 MW, NTPC and Sukhbir Agro were declared winners with tariffs of ₹3.02 (~$0.040)/kWh ₹3.05 (~$0.041)/kWh, respectively.

The UPERC did a ranking of bidders as per the tariffs quoted by them. All the bidders were found eligible to participate in the e-reverse auction held on June 25, 2019.

The letter of intent (LoI) was to be issued within 66 days from the issuance of the request for proposal. However, due to the delay in approval from the empowered committee and the state government, the LoI was issued on November 29, 2019, and the PPAs were signed on February 27, 2020.

UPERC said that as per section 63 of the Electricity Act, the tariffs discovered through the transparent, competitive bidding process should be adopted. Consequently, the tariff of ₹3.02 (~$0.040)/kWh for NTPC’s 40 MW projects and ₹3.05 (~$0.041)/kWh for the 32 MW project developed by Sukhbir Agro was adopted.

In June this year, the Appellate Tribunal for Electricity asked three solar power developers to verbally negotiate their tariff disputes with UPERC after petitions were filed to challenge the tariffs, which in three cases were lower than what was discovered through competitive bidding.

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