Uttarakhand Power Corporation (UPCL) Deploys Innovative Power Procurement Strategies

Uttarakhand Power Corporation (UPCL) has been increasingly integrating power exchanges into its routine power supply planning. UPCL’s power procurement, backed by data-led procurement strategies, has helped the DISCOM save more than INR 160 crore during the first nine months (April -December 2025) of FY26, while also generating an additional revenue of INR 125 crore through sale of Renewable Energy Certificates (RECs).

Driven by improved supply liquidity from renewable sources including solar, hydro, wind along with steady coal generation, there has been a substantial drop-in Day-Ahead Market (DAM) and Real-Time Market (RTM) prices during April to December 2025. On the Indian Energy Exchange (IEX), the average daily Market Clearing Price in the DAM during 9MFY26 was INR 3.85 per unit, a 14 percent year-on-year decline, while RTM prices averaged INR 3.56 per unit, reflecting a 16 percent year-on-year drop. These prices presented an opportunity for UPCL to meet its demand at competitive rates and replace costlier power by procuring through exchanges and reduce dependency on long duration bilateral contracts.

UPCL initially invited tenders on the Discovery of Efficient Electricity Price (DEEP) Portal. However, faced with high prices on DEEP, the DISCOM adopted a diversified procurement strategy by leveraging products available on the power exchanges. This approach enabled UPCL to secure power at lower rates and optimise its overall power procurement costs.  During 9MFY26, UPCL procured around 850 MUs power through Long Duration Contracts at an average procurement cost approximately INR 3.59 per unit, compared to INR 5.50 per unit on the DEEP portal. This resulted in a saving of nearly INR 2 per unit, translating into total savings of about INR 160 crore as compared to DEEP-based procurement.

During December, due to lower availability of hydro power and increased demand due to onset of winters, UPCL traditionally has been relying on DEEP to meet this incremental requirement. However, in December 2025, instead of relying on DEEP, where prices were significantly higher at INR 4.30 per unit, UPCL shifted its procurement planning by leveraging LDC contracts at power exchange at a much lower price of INR 3.40 per unit. This resulted in saving of nearly  INR 20 crore in the month of December 2025 itself.

Being a hydro rich state, Uttarakhand generates a significant amount of renewable energy. After utilising this energy to meet its own RPO, UPCL generates surplus Renewable Energy Certificates (RECs). So far in FY26, UPCL strategically leveraged power exchanges to monetise these surplus Renewable Energy Certificates (RECs), by selling them on power exchanges. During the period, UPCL sold 35 lakh RECs at an average clearing price of around INR 350 per REC, generating additional revenue of nearly INR 125 crore.

Commenting on the development, Anil Kumar, Managing Director, UPCL stated, "Our power procurement division, led by our Director Projects, Ajay Kumar Agarwal, has adopted a scientific and data-driven approach, including mapping weather conditions, to procure power cost-effectively while maintaining demand–supply balance. By leveraging market segments such as the Day-Ahead Market and Real-Time Market on power exchanges, along with exploring longer-duration contracts, we have enhanced our ability to manage uncertainties in demand and supply.”

He added, “This has resulted in optimising the costs through short-term market mechanisms and also generate additional revenue through REC trading. We will continue to leverage competitive pricing on power exchanges to ensure reliable and affordable power supply for the consumers of our state.”