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UPERC Approves 1,525 MW Solar Power Deal with NHPC

UPERC greenlights UPPCL’s procurement of 1,525 MW solar power from NHPC at INR 2.52/kWh to meet RPO targets, with tariff and trading margins regulated for consumer cost efficiency.

May 08, 2025. By EI News Network

In a significant move towards enhancing renewable energy adoption, the Uttar Pradesh Electricity Regulatory Commission (UPERC) has approved the procurement of 1,525 MW of solar power by the Uttar Pradesh Power Corporation Ltd.(UPPCL) from the National Hydroelectric Power Corporation (NHPC).

This approval encompasses both the Power Sale Agreement (PSA) and the Supplementary Power Sale Agreement (SPSA) between UPPCL and NHPC. The procurement is set at a tariff of INR 2.52 per kilowatt-hour (kWh), a rate previously endorsed by the Central Electricity Regulatory Commission (CERC) following NHPC's competitive bidding process for 3,000 MW of interstate transmission system (ISTS)-connected solar projects.

Initially, UPPCL intended to procure 1,500 MW; however, an additional 25 MW, originally allocated to the Military Engineering Services (MES), was reallocated to UPPCL after MES did not finalise the agreement.

UPPCL highlighted that this procurement would aid in meeting the state's Renewable Purchase Obligation (RPO) targets and optimize power purchase costs for consumers.

The Commission also addressed the trading margin associated with this procurement. While a trading margin of INR 0.07 /kWh was approved, UPERC stipulated that if NHPC fails to provide an escrow mechanism or an irrevocable, unconditional revolving letter of credit, the trading margin would be limited to INR 0.02 /kWh. UPERC further directed UPPCL to negotiate future trading margins below INR 0.07/kWh for long-term power purchase agreements with intermediaries or trading licensees.

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