The Uttar Pradesh Electricity Regulatory Commission (UPERC) has approved the procurement of 300 MW of wind–solar hybrid power by Uttar Pradesh Power Corporation (UPPCL) from NHPC at the tariff of ₹3.56 (~$0.040)/kWh, including a trading margin of ₹0.07 (~$0.00079)/kWh.

The Commission also approved the power sale agreement (PSA). It held that if NHPC fails to provide an escrow arrangement or an irrevocable, unconditional revolving letter of credit to the hybrid power developer, the trading margin will be reduced to ₹0.02 (~$0.00023)/kWh.

Background

NHPC issued a tender for hybrid developers to supply 1,500 MW of power via interstate transmission system-connected projects, with or without energy storage.

It allotted 960 MW to three developers at tariffs between ₹3.48 (~$0.0392)/kWh and ₹3.49 (~$0.0393)/kWh.

Energizent Power was allotted 300 MW, comprising a 250 MW solar component in Rajasthan and a 104 MW wind component in Andhra Pradesh. NHPC later issued a letter of award to this developer and subsequently amended the location of the wind component.

NHPC then sought consent from state utilities for tying up the discovered capacity. It wrote to UPPCL requesting its willingness to procure the 300 MW. UPPCL agreed and executed the PSA.

The utility stated that this procurement was essential to meeting its trajectory for renewable purchases.

At the hearing, counsel for UPPCL argued that the tariff had already been adopted by the Central Electricity Regulatory Commission (CERC) and that the PSA therefore required approval so that the state could secure its share of hybrid power.

Representatives from NHPC supported the petition. NHPC stated that the central regulator had already adopted the tariff resulting from the transparent bidding process and that NHPC had no objection to the state commission’s approval of the PSA.

Commission’s Analysis

The Commission examined the petition to determine whether the procurement of 300 MW of hybrid renewable power and the associated PSA accorded with statutory requirements and established guidelines.

It noted that the CERC had already adopted the tariffs resulting from the competitive bidding process. It confirmed that the bidding had been conducted transparently and complied with the national guidelines.

The central regulator adopted individual tariffs for each successful bidder, including the tariff of ₹3.49 (~$0.0393)/kWh for the 300 MW allotted to Energizent Power. The Uttar Pradesh Commission reproduced the relevant extracts and acknowledged that UPPCL’s procurement formed part of this centrally adopted allocation of 960 MW.

The Commission also reviewed the detailed structure of the power purchase agreements executed under the PSA. These documents show a total hybrid capacity of 300 MW, comprising 250 MW of solar capacity with a declared annual capacity utilisation factor of 29% and 104 MW of wind capacity with a declared CUF of 40.9%. The applicable tariff of ₹3.56 (~$0.040)/kWh includes a trading margin of ₹0.07 (~$0.00079)/kWh.

The Commission held that these terms were consistent with the bidding process framework and the approval granted by the central regulator.

It clarified that if NHPC does not furnish an escrow mechanism or an irrevocable, unconditional revolving letter of credit to the hybrid power developer, the trading margin will be reduced to ₹0.02 (~$0.00023)/kWh.

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