The Solar Energy Corporation of India (SECI) and the Uttar Pradesh Power Corporation Limited (UPPCL) had filed a petition to the Uttar Pradesh Electricity Regulatory Commission (UPERC) for a grid-connected floating solar photovoltaic (PV) project with a capacity of 150 MW. Uttar Pradesh Electricity Regulatory Commission (UPERC) gave the green signal to the tariff of ₹3.29 (~$0.044)/kWh based on the petition.
Uttar Pradesh Electricity Regulatory Commission (UPERC) had finalized this tariff through a competitive bidding process. Along with this, SECI has got the approval of the commission to get a trading margin of ₹0.07 (~$0.00094)/kWh over the adopted tariff.
The power procurement will help the Uttar Pradesh Power Corporation Limited (UPPCL) effectively meet its renewable purchase obligation instead of relying on renewable energy certificates.
Background:
The tender for this 100 MW capacity grid-connected floating solar PV projects in Uttar Pradesh was floated by SECI in March 2018, which was increased to 150 MW in April 2018. These solar projects will be developed on the Rihand Dam, Govind Ballabh Pant Sagar reservoir located in Sonbhadra district. Solar projects will be completed in three parts – A, B, and C. SECI had set ₹3.50 (~$0.0533)/kWh as the upper tariff ceiling for this tender.
In the auction held in November 2018, Shapoorji Pallonji won the tender for Part B (50 MW) with a tariff of ₹3.29 (~$0.044)/kWh. Renew Power, the second bidder in this auction, had submitted a tender for the full capacity. They had participated in reverse bidding earlier also. However, after renegotiation between SECI and ReNew Power, it was decided that the company that meets the L1 tariff of ₹3.29 (~$0.046)/kWh will also be awarded for the remaining capacities (Parts A and C).
Since only single bids were received at ₹3.31 (~$0.044)/kWh for packages A and C from Renew Solar Power, but after renegotiation between SECI and ReNew Power, the tariff was ₹3.29 (~$0.044)/kWh was decided. After which there was no opportunity to conduct the e-reverse auction.
SECI agreed to sell 150 MW of solar power to the distribution licensee, UPPCL, at the tariff of ₹3.29 (~$0.044)/kWh plus a trading margin of ₹0.07 (~$0.00094)/kWh.
The water surface is being used for developing this project, hence the solar developers have to pay ₹0.05 (~$0.00067)/kWh to Uttar Pradesh Jal Vidyut Nigam Limited (UPJVNL) as a lease charge till the complete project period (25 years from the scheduled commissioning date), as well as ₹0.02 (~$0.00027)/kWh (for dismantling the solar project after 25 years) to UPJVNL every month.
Commission’s Observations
The bidding for the project was started in October 2018, while the latest petition was filed in October 2020. According to the Commission, while tariff adoption is to be filed before the appropriate Commission, power procurement approval is entrusted with the state Commission, where the procurer is located. Thus, SECI should have filed the tariff adoption petition and the UPPCL the power procurement approval petition before the UPERC.
Apart from this:
- The Commission adopted the tariff of ₹3.29 (~$0.044)/kWh and directed the solar power developers to make payments towards lease charges and charges towards dismantling the project after 25 years.
- Apart from the trading margin ₹0.07 (~$0.00094)/kWh above the approved tariff would be paid to SECI by UPPCL.
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