The Uttarakhand Electricity Regulatory Commission (UERC) has approved the extension of benchmark capital cost and generic tariff for the financial year 2019-20 (up to October 2020) for the upcoming solar projects of 52 MW in the state.

The commission has made it clear that there will be no extension beyond the cumulative capacity of 52 MW.

The commission has also asked both Uttarakhand Renewable Energy Development Agency (UREDA), the petitioner in this case, and the selected bidders to expedite the allotment and commissioning process so that the projects can be completed before October 2020.

The commission has further observed that the petitioner in July 2019 had provided a ceiling tariff of ₹4.73/kWh (~$0.066) which was later amended to ₹4.49 (0.063)/kW.

The UERC also expressed its displeasure at the approach adopted by the UREDA and warned them to follow the laid down principles and procedures in the future.

Background

In June 2019, UREDA had filed a petition with the UERC to extend the control period of benchmark capital cost and generic tariff as determined by the commission for solar projects of 52 MW for FY 2019-20, up to October 2020.

According to the petitioner, solar power projects are proposed to be set up under four categories, one of which is reserved for state distribution company – Uttarakhand Power Corporation Limited (UPCL) for meeting its Renewable Purchase Obligation (RPO) wherein the solar power projects are selected through a tariff-based competitive bidding process. Further, projects up to 5 MW would be allotted only in the hilly areas of the state and must be reserved for the permanent residents of Uttarakhand.

The petitioner said that the UPCL had requested UREDA to facilitate 200 MW of solar power to achieve its RPO. Based on the request of UPCL, Uttarakhand Renewable Energy Development Agency prepared the request for proposal (RfP) to select developers for setting up 200 MW of grid-connected solar PV power projects in the hilly regions of the state through a competitive bidding process.

The petitioner submitted that the tariff declared by the commission for FY 2018-19 had been taken as the base rate for the reverse tariff bidding in the RfP. Further, the petitioner had requested the commission for the extension of the benchmark capital cost and generic tariff for FY 2018-19 up to March 2020. The commission has allowed UREDA the extension of benchmark capital cost and generic tariff for FY 2018-19 up to June 2020 for solar projects of 200 MW capacity.

UREDA said that out of the 237 proposals (worth 184.35 MW) received, only 208 (148.85 MW) bids were found eligible. So, the total aggregate capacity of 51.15 MW (~52 MW) was left over from RfP of 200 MW which was later retendered in July 2019.

Meanwhile, UPCL argued that UREDA had invited bids for 52 MW solar projects in FY 2019-20 and that, UREDA has enough time to finalize the bidding process to award installation of solar projects.

It is worth mentioning that in October 2015, the government of Uttarakhand directed that the solar PV projects should be completed within 12 months from the date of allotment.

On the other hand, UPCL pointed out that by extending the control period of the FY 2019-20 tariff to FY 2020-21, “the very purpose of the competitive reverse bidding would get defeated.” It also stated that the extension is neither in the interest of the consumer nor is it in favor of UPCL.

Recently, Mercom had reported that UPCL approached the Uttarakhand Electricity Regulatory Commission (UERC) seeking its approval for the model PPA between the petitioner and the selected bidders for setting up 200 MW of grid-connected solar PV power projects.

In June 2019, the state issued benchmark tariffs and capital costs for solar power projects in the state. The state commission had issued draft regulations in December 2018 and had invited comments from stakeholders.

Image credit: PDS.2016 [CC BY-SA 4.0]