UPERC approves UPNEDA’s petition for fixing the ceiling tariff for 500 MW solar projects

UP New and Renewable Energy Development Agency (UPNEDA) and UP Power Corporation Ltd. (UPPCL) had filed a petition seeking approval for RFP & PPA for procurement of 500 MW Grid-connected solar power through tariff based competitive bidding discovering ceiling tariff-based competitive bidding discovering a ceiling tariff of INR 3.25/unit. UPERC has recently approved the petition and suggested certain changes in the PPA but largely accepting the petition as it is. The key points of the approved petition include:

• Commercial operation date will be 21 months for projects of capacity less than 250 MW.
• Commercial operation date will be 24 months for projects of a capacity of more than 250 MW.
• Upper tariff ceiling will be ₹3.25/kWh if safeguard duty is included.
• If safeguard duty is not included, upper tariff ceiling will be ₹3.10/kWh.
• Financial closure must be attained within 365 days of PPA signing.

The changes suggested by the commission are:

• The document talks about providing 210 days time for the submission of technical Feasibility of connectivity of the plant to the STU substation. The commission suggested that in case the STU is not in a position to provide connectivity to the proposed solar plant due to technical issues, then the PPA should be considered unfruitful without any financial liability on either party.
• The commission is of the opinion that since the power is always procured in kWh or Million Units (MU) and not in MWh. It should be specified in the PPA that the power will be procured in kWh or MU but the bidding will be done in MWh.