The Uttar Pradesh Electricity Regulatory Commission (UPERC) has approved the power sale agreement (PSA) between the Uttar Pradesh Power Corporation (UPPCL) and NTPC for the procurement of 1,530 MW of firm and dispatchable renewable energy (FDRE) at tariffs ranging from ₹4.71 (~$0.0535)/kWh to ₹4.79 (~$0.0544)/kWh.

The Commission noted that the arrangement aligns with national renewable energy objectives and would help UPPCL meet its renewable purchase obligation (RPO) targets in line with the Ministry of Power’s (MoP) trajectory.

Background

The petition was filed by UPPCL seeking the Commission’s approval for a PSA executed with NTPC to procure 1,530 MW of FDRE. The MoP’s notification on RPO trajectories for financial years (FY) 2024–25 through FY 2029–30 mandates an increase in total renewable share from 29.91% in FY 2024–25 to 43.33% in FY 2029–30, covering wind, hydro, other renewables, and distributed renewable energy.

To ensure compliance and avoid penalties, UPPCL argued that early contracting of renewable capacity was critical. The MoP notification specified that any shortfall in meeting RPO targets would attract penalties up to ₹1 million (~$11,364) per instance of failure, along with ₹3.72 (~$0.0422)/kWh for each unit of shortfall.

To achieve these goals, UPPCL outlined plans to procure 23,500 MW of renewable energy capacity, including solar, wind, and hydro power by FY 2031–32.

NTPC, acting as the intermediary agency, conducted a competitive bidding process for 3,000 MW of FDRE. Following technical and financial evaluations, the e-reverse auction discovered tariffs ranging from ₹4.64 (~$0.0527)/kWh to ₹5.25 (~$0.0596)/kWh.

After the addition of NTPC’s trading margin of ₹0.07 (~$0.0008)/kWh, the final adopted tariffs for the contracted capacity ranged from ₹4.71 (~$0.0535)/kWh to ₹4.79 (~$0.0596)/kWh.

During the bucket-filling stage, ACME Cleantech Solutions declined to accept a partial capacity of 54 MW, leading to a final allocation of 1,530 MW. Subsequently, power purchase agreements (PPAs) and the PSA were executed for this capacity.

Commission Analysis

UPERC noted that UPPCL’s proposal was consistent with national renewable energy policies and necessary for efficiently achieving the state’s RPO targets. The Commission observed that the MoP’s revised trajectory had created a pressing need for distribution utilities to expand their renewable portfolios significantly over the next decade.

The Commission confirmed that the PSA was executed following due process and that NTPC’s competitive bidding process was fair, transparent, and in line with prescribed guidelines. It emphasized that FDRE procurement ensures a more reliable renewable power supply by mitigating the intermittency challenges typically associated with solar and wind generation.

After reviewing all submissions, documents, and policy frameworks, UPERC approved the PSA and authorized UPPCL to proceed with the procurement. It directed both parties to comply with all applicable regulatory and reporting obligations.

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