UPERC Approves 375 MW/1500 MWh BESS Project for UPPCL

The Uttar Pradesh Electricity Regulatory Commission (UPERC) has approved the petition filed by Uttar Pradesh Power Corporation Ltd. (UPPCL) for the procurement of 375 MW/1500 MWh standalone Battery Energy Storage System (BESS) capacity under the Ministry of Power’s Viability Gap Funding (VGF) scheme.

SJVN Ltd. (SJVNL) has been designated as the Battery Energy Storage Implementing Agency (BIA) to facilitate the procurement and implementation of the project. The approval allows UPPCL to secure storage services on a long-term, 15-year basis under a tariff-based competitive bidding (TBCB) process.

UPPCL highlighted that with the growing share of renewable energy in the state, energy storage is essential to meet peak demand during evening and morning hours and to ensure grid stability. Standalone BESS will enable the utility to store excess renewable energy and supply it when required, thereby optimising power purchase costs and maximising the utilisation of the transmission infrastructure. The proposed project will be established at the Garautha substation in Jhansi on 30 acres of land owned by UPPTCL, which will be leased for the purpose. The Commission noted that the project’s location within the state would reduce interstate transmission losses and help ease grid congestion.

The procurement process, conducted by SJVNL under the VGF scheme, followed a Single Stage, Two Envelope bidding methodology, including technical and financial bids. An e-reverse auction was held among the qualified bidders to arrive at the most competitive tariff. Following the auction, two successful bidders were selected: Patel Infrastructure Ltd., with 187.5 MW / 750 MWh capacity at a tariff of INR 3,59,000 per MW per month, and Enerica Infra 3 Pvt. Ltd., with 187.5 MW / 750 MWh at INR 3,59,999 per MW per month. SJVNL executed BESPA agreements with both bidders, while a back-to-back arrangement ensures that 100 percent of the contracted capacity will be off-taken by UPPCL.

The VGF scheme mandates that the project must achieve full commissioning within 18 months of BESPA signing, with a possible six-month extension under specified conditions. Disbursement of VGF is linked to milestone-based achievements, including financial closure, commercial operation, and annual performance for the first three years. SJVNL clarified that it acts solely as an intermediary procurer, charging a trading margin in line with the Competitive Bidding Guidelines of 2022 and the Trading License Regulations of 2020.

During the hearing, UPPCL representatives emphasised the strict timelines under the VGF scheme and the fixed discharge hours linked to the MWh-based incentive structure. The Commission, after reviewing the submissions, approved the procurement of 375 MW/1500 MWh BESS capacity with VGF under Section 63 of the Electricity Act, 2003. UPERC also advised the parties to initiate tariff adoption and BESPA approvals promptly to ensure timely implementation, given that the tariff for the bidding process has already been finalised.

With similar projects approved in Gujarat and competitive tariffs discovered in Bihar, Uttar Pradesh’s move positions it as a front-runner among Indian states in adopting large-scale battery storage to facilitate renewable energy integration and grid optimisation.