In its latest ruling, the Uttar Pradesh Electricity Regulatory Commission (UPERC) has instructed the Uttar Pradesh Power Corporation Limited (UPPCL) to conduct a transparent competitive bidding process for the procurement of power from co-generators who are producing power from mixed fuel using bagasse and spent wash.
The UPPCL had sought the UPERC’s permission to enter into a Power Purchase Agreement (PPA) with co-generators who are generating power from bagasse and spent wash based mixed fuel.
The PPA is slated to be for a tenure of ten years during which the six co-generators would supply the mixed fuel-based power priced at ₹2.89 ($0.040)/kWh from their proposed installed capacity of 18.50 MW.
The UPERC has further stated that after fair competitive bidding, it will be up to the UPPCL to purchase power from these co-generators and approach the commission with a fresh petition seeking directives for the PPA.
Last month, the UPERC issued new regulations titled “Captive and Renewable Energy Generating Plants Regulations, 2019,” which will be enforced from April 1, 2019, through March 31, 2024, unless reviewed or extended by UPERC. These regulations will apply to the captive generation, renewable sources for generation and co-generation. Provision of availability-based tariff (ABT) as applicable to conventional generation projects will apply to these projects.
In January 2019, the UPERC had issued a concept paper to amend its Captive and Renewable Energy Generating Projects (CRE) Regulations 2014.
During the same month, the UPERC approved amendments to the bidding documents for the procurement of bagasse-based power from generators by the UPPCL. UPPCL had proposed the amendments in the expectation that this would lead to the discovery of competitive tariffs for these bagasse-based power projects.
Before that, in December 2018, the commission had disapproved three standardized power purchase agreements (SPPAs) for the procurement of 32.5 MW of bagasse-based power from generators by the UPPCL. The UPPCL had filed three separate petitions seeking the approval of SPPA to procure bagasse-based power. UPERC had found that when the UPPCL had initiated the process of competitive bidding for the procurement of power, it will be unfair to enter bilateral agreements with mutual consent as it will undermine the sanctity of the bidding process, lead to unfair pricing, and give the generator advantage.
In December 2018, the Ministry of New and Renewable Energy amended two clauses in the policy to support the promotion of biomass-based cogeneration projects in sugar mills and other industries in the country up to March 2020. MNRE had announced the program in May 2018.