The Uttar Pradesh Electricity Regulatory Commission (UPERC), in a recent order, has approved Uttar Pradesh Power Corporation Limited (UPPCL) adopting the levelized tariff of ₹2.798 (~$0.038)/kWh discovered through a competitive bidding process for procuring slop-based power for 10 years.

Slop, also known as vinasse, is an acidic effluent from the fermentation of sugarcane molasses used in distilleries.

The Commission also approved a power purchase agreement (PPAs) signed by UPPCL with respective bidders to procure 21 MW of slop-based power.

Background

In August 2020, UPPCL had issued a tender for a 20 MW (± 25%) slop-based power project in the state. The tender was announced with a ceiling tariff of ₹2.899 (~$0.039)/kWh (50% of the tariff to be treated as variable cost). The tariffs quoted ranged between ₹2.798 (~$0.0376)/kWh and ₹2.88 (~$0.0387)/kWh.

In the competitive bidding, Balrampur Chini Mills quoted the lowest (L1) tariff of ₹2.798 (~$0.0376)/kWh for 3.5 MW of capacity.

Avadh Sugar & Energy (Seohara) and Avadh Sugar & Energy (Hargaon) quoted a tariff of ₹2.82 (~0.0379)/kWh for 2 MW and 3.5 MW capacity, respectively.

For 2 MW each, Dwarikesh Sugar Industry and Dalmia Bharat Sugar & Industries quoted a tariff of ₹2.86 (~$0.0384)/kWh and ₹2.862 (~$0.0384), respectively.

DCM Shriram stated a tariff of ₹2.869 (~$0.0384)/kWh for 4 MW capacity.

For 2 MW each, Gobind Sugar Mills and The Seksaria Biswan Sugar Factory stated tariff of ₹2.87 (~$0.0386)/kWh and ₹2.88 (~$0.0387)/kWh, respectively.

As per the tender provisions, the other successful bidders were invited to match the tariff quoted by the L1 bidder, which they agreed to. Following this, UPPCL signed PPAs with respective bidders for the cumulative 21 MW capacity of slop-based power.

Commission’s analysis

The Commission noted that the provisions of the tender document, as approved by the Commission, were followed to conduct the bidding process and selection of the bidders.

In its analysis, after considering the submission made during the hearing and document placed on record, the Commission adopted the levelized tariff of ₹2.798 (~$0.038)/kWh under Section 63 of the Electricity Act, 2003.

In January 2021, the Commission directed UPPCL to allow Avadh Sugar and Energy to inject slop-based power into the grid from two of its units – Hargaon Unit Distillery in Sitapur and Seohara Unit Distillery in Bijnor, Uttar Pradesh.

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Harsh Shukla is a staff reporter at Mercom India. Previously with Indian Express, he has covered general interest stories. He holds a Masters Degree in Journalism from Symbiosis Institute of Media and Communication, Pune.

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