The Uttar Pradesh Electricity Regulatory Commission (UPERC) dismissed a petition filed by the Uttar Pradesh Power Corporation Limited (UPPCL) seeking to fulfill its renewable purchase obligation (RPO) target by procuring slop-based power. Slop, also known as Vinasse, is an acidic effluent from the fermentation of sugarcane molasses in distilleries.

The request was mainly rejected because, currently, the central government does not have guidelines in place for procuring slop-based power. The Commission, however, approved UPPCL’s proposed fuel mix with a maximum of 40% bagasse with slop,and it stated that the minimum bid of 2 MW would be appropriate.

UPPCL had invited bids for 20 MW (+/- 25%) in line with its power requirements. It further added that UPPCL should now start the bidding process with the approved modifications in the bidding document.

Background

UPPCL had filed a petition seeking the approval of draft competitive bidding documents for the long-term procurement of slop-based power to meet its RPO target.

In its petition, UPPCL said that the procurement of slop-based power would help meet the RPO obligation. The central government has not issued any standard bidding document for the competitive bidding process for this source of renewable power. So,UPPCL prepared the current bidding document for power procurement. The documents were prepared per the guidelines issued by the Ministry of Power (MoP) for the procurement of solar power through the competitive bidding route.

Earlier, Dwarikesh Sugar Industries Private Limited, DCM Sriram Limited, and Seksariya Biswan Sugar Mill Limited had filed a petition requesting the Commission to direct UPPCL to carry out the bidding process for the procurement of bagasse and slop-based power.

In December 2019, the Commission directed the UPPCL to complete the bidding process by January 2020 and allowed the generators to inject power into the grid.

The Commission also directed UPPCL to upload the bidding documents on its website. The bidding document was placed on the website, and comments from various generators were received.

After reviewing the suggestions, the Commission considered:

• Fuel Mix: Fuel mix with a maximum of 40% bagasse with slop will be allowed.
• RPO Fulfilment: Slop-based power procurement cannot be considered for fulfilling RPO.
• Minimum Bid Amount: The minimum bid should be of 2 MW.
• Total Requisition Capacity: The total requisition capacity should be 20 MW (+/-25%).

The Commission asked UPPCL to make the modifications in the bidding document and start the competitive bidding process for the procurement of slop-based power on a long-term basis.

Previously, UPERC ordered UPPCL to clear its dues with Kesar Enterprises Limited for the procurement of bagasse-based power. UPPCL had previously signed a power purchase agreement with KEL to procure 10 MW of surplus power from its bagasse-based power projects at Bareilly. The project capacity was later enhanced to 44 MW, and a supplementary PPA for 32 MW was duly signed.

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.