The Uttar Pradesh Electricity Regulatory Commission (UPERC) has notified the Captive and Renewable Energy Generating Plants Regulations, 2024, setting a comprehensive framework for renewable and captive generation in the state from April 1, 2024, to March 31, 2029.

The regulations apply to renewable and captive renewable energy projects, including cogeneration-based systems.

The draft regulations were issued in May this year.

Solar projects may sell power through open access either to captive users or to third parties. Such sales will be subject to the UPERC Open Access Regulations, 2019, and the technical and commercial conditions prescribed therein.

The Commission has limited the number of wheeling and banking agreements to two for the project’s lifetime to ensure the system’s proper management.

Commercial Operations

Solar projects selling power to persons other than the distribution licensee (DISCOM) must declare commercial operation, in whole or in part, only after a successful trial run. The trial run will demonstrate operation for a continuous 15-minute time block, with verification against irradiance and temperature, and confirmation of project parameters by the State Load Despatch Centre (SLDC).

The trial run of the solar power project, or a part of the project, must be performed at a minimum capacity of 10% of the project, with the initial minimum being 5 MW. The solar power developer will be given up to four attempts, including retrials, for each commissioning or part-commissioning if the initial trial run fails.

The developer must not obtain multiple long-term open access approvals for the same project. Wheeling and banking agreements will be executed only after long-term open access is fully operational for the capacity declared under commercial operation.

Open Access Charge Exemptions

During the control period, solar projects with a capacity above 5 MW receive a 100% exemption from wheeling and transmission charges on sale to a DISCOM. They receive 50% of wheeling and transmission charges from sales to captive or third-party consumers. They also receive a 100% from the additional surcharge on the intra-state transmission system.

These provisions are aligned with the Uttar Pradesh Solar Energy Policy 2022.

Purchase of Electricity from DISCOM

Captive projects are also permitted to purchase electricity through open access or directly from their area’s DISCOM to meet internal electricity requirements.
Such purchases will be billed under the HV-2 tariff category, with demand charges applied as follows:

• 50% of the demand charge if power is availed for up to 15 days in a month
• 100% if availed for more than 15 days
• No demand charge if no purchase is made during the month

Energy Banking

Captive renewable projects can inject surplus power every 15 minutes and can mark all of that surplus as banked per block. However, the total banked energy for a month will be limited to the higher of 25% of the energy injected during the month or 30% of the total monthly electricity consumed from the DISCOM.

The ceiling will be computed individually for each captive user. Banking will be accounted for in 15-minute blocks, and settlement will follow the first-in, first-out method. Banked energy may be carried forward monthly within these ceilings.

Energy banked in off-peak hours will be allowed to be withdrawn only during off-peak hours, whereas energy banked in peak hours may be withdrawn in both peak and off-peak hours.

Banking charges, in energy terms, are set at 8% for wind, solar, and wind solar hybrid projects, and 12% for all other captive and co-generating projects.

Scheduling of energy for banking, as well as withdrawal of banked energy, is mandatory on a day-ahead basis.

Grid Discipline and Deviation Settlement

Solar and wind projects with a capacity above 5 MW should follow day-ahead scheduling and forecasting requirements. They are subject to deviation settlement in accordance with the applicable framework. Small hydro and municipal solid waste-based plants are excluded from these requirements.

Evacuation and Connectivity

Connectivity voltage levels will be prescribed by project capacity. Projects up to 4 MW connect at 11 kV, and projects from 4 MW to 20 MW connect at 33 kV. The developer must bear the cost of the evacuation facility up to the interconnection point.

The State Transmission Utility or the DISCOM will provide the nearest feasible interconnection point.

Metering and Energy Accounting

Meters must comply with the Central Electricity Authority regulations on the installation and operation of meters. Automatic meter reading meters are required and should be compatible with the Uttar Pradesh SLDC energy accounting software.

Projects using the distribution system will coordinate with the SLDC for scheduling data exchange and energy accounting.

Power Purchase Agreements

Where a DISCOM purchases power from a power project, it must obtain the Commission’s approval for the power purchase agreement within one month of signing. The DISCOM must submit details of approved power purchase agreements annually.

Clean Development Mechanism (CDM)

The Commission has also retained the provision for projects registered under the Clean Development Mechanism (CDM). For projects adopting CDM, the proceeds from carbon credits are to be shared, with 100% retained by the developer in the first year, and the procurer’s share increasing by 10% annually until reaching 50%, after which both share equally.

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