Uttar Pradesh Regulator Approves Tariff of ₹2.98/kWh to Procure 125 MW of Solar Power

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The Uttar Pradesh Electricity Regulatory Commission (UPERC) recently adopted the tariff of ₹2.98 (~$0.037)/kWh to procure 125 MW of solar power from grid-connected projects to be installed under the ‘Solar Parks and Ultra Mega Solar Power Projects Program’ of the Ministry of New and Renewable Energy (MNRE).

The Commission also approved the power purchase agreement (PPA) between the Uttar Pradesh Power Corporation (UPPCL) and SJVN.

The Commission directed UPNEDA to take approval before making deviations in the bidding guidelines.

UPNEDA had filed a petition to adopt the tariff to procure 125 MW of solar power under the Solar Parks and Ultra Mega Solar Power Projects Program.


Background

MNRE had approved the development of 600 MW of solar projects in Jalaun, Allahabad, Mirzapur, and Kanpur Dehat, which was later reduced to 440 MW due to land availability constraints.

The solar parks are being developed through Lucknow Solar Power Development Corporation, a joint venture between UPNEDA and the Solar Energy Corporation of India (SECI).

Out of the 440 MW capacity, 50 MW has been commissioned in the Prayagraj district, 75 MW in the Mirzapur district, and 40 MW in the Jalaun district of Uttar Pradesh. The remaining 275 MW is to be developed at Gujrai (50 MW), Makrechha & Banghauli (45 MW), Gurhah (75 MW), Parasan (75 MW), Tikar 1 & Tikar 2 (30 MW). The sites are located across the state’s Jalaun and Kanpur Dehat districts.

UPPCL had agreed to procure power from 275 MW of solar projects.

In January 2021, UPNEDA invited bids to set up 275 MW of projects in the state’s solar park. SJVN was awarded 75 MW, and REC Power Distribution Company was awarded 125 MW. However, RECPDCL failed to submit the contract performance guarantee and sign the PPA within the stipulated time, and the Letter of Intent issued to RECPDCL was canceled.

Subsequently, UPNEDA invited bids for the canceled 125 MW and the remaining 75 MW capacity that was not allocated earlier to be set up in the state’s solar park. The ceiling tariff was set as ₹3 (~$0.038)/kWh.

After the e-reverse auction, which was carried out in December 2021 for 200 MW, 125 MW was awarded to SJVN at a tariff of  ₹2.98 (~$0.037)/kWh. Subsequently, a PPA was signed between UPPCL and SJVN to procure 125 MW of solar power (75 MW in Jalaun and 50 MW in Kanpur Dehat).

Commission’s analysis

The Commission observed that UPNEDA had not sought its approval before making deviations in the bidding guidelines and had conducted the bidding process. It directed UPNEDA to take prior approval for any such deviations in the future.

It approved the tariff of ₹2.98 (~$0.037)/kWh to procure 125 MW of solar power from the projects being developed by SJVN and approved the PPA signed between the parties on February 3, 2022.

Recently, SJVN signed the EPC contract with Solarworld Energy Solutions to deploy a 75 MW solar project in Gurah village in Jalaun district and a 50 MW project in Gujrai village in Kanpur district.

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