Essel Infra would be the biggest beneficiary as its tariff at Rs 7.02 paise was the lowests.
Tariff of Essel Infraprojects’ solar power plant at Uttar Pradesh (UP) has been upheld by Uttar Pradesh Electricity Regulatory Commission, more than a year after the project was commissioned.
After considering a demand for rejecting Power Purchase Agreements between Uttar Pradesh Power Corp and eight other power producers including Essel on the ground that the tariff is not consumer friendly, the commission has now accepted the tariff discovered through competitive bidding.
Essel Infraproject, would be the biggest beneficiary as its tariff at Rs 7.02 paise was the lowest and all other eight successful bidders will now have to match it.
However, most of the bidders expressed their unwillingness to accept Essel’s lowest bid.
Essel Infraprojects, an enterprise of Dr Subash Chandra-led Essel Group, was awarded 50 mega watt (MW) solar project by Uttar Pradesh New and Renewable Energy Development Agency under the state Solar Power Policy 2013.
UPNEDA in 2015 carried out tariff-based competitive bidding process for grid-connected power projects for the procurement of 215 MW capacity solar power at fixed tariff for a period of 12 years.
The Power Purchase Agreements were then signed with Uttar Pradesh Power Corp.
The financial bids of 25 technically-qualified bidders including firms belonging to Essel and Adani were opened in June 2015 and the Bid Evaluation Committee recommended approval of tariff quoted by 15 bidders which was subsequently approved by UP government Cabinet in September.
Essel InfraProjects quoted the lowest at Rs 7.02 a unit, Adani Green Energy was among the highest at Rs 8.44, with Sukhbir Agro and Sree Radhey both quoting the highest tariff of Rs 8.60 a unit.
Later in a public hearing, the regulatory commission was urged to delve into reasonability of the discovered tariff with a demand for rejection of discovered tariff.
In the petition for acceptance of the tariff, the regulatory commission remarked in February “it is incumbent on the Commission to closely scrutinise the reasonability of the tariff before passing it on to consumer to protect consumer interest.”
Following this, UP Power Corp and renewable energy agency told the regulator in March this year that empowered committee constituted under the state solar policy has found tariff of Essel Infra below CERC benchmark tariff of 7.06 a unit for FY16, the year when bids took place.
The empowered committee has also asked other successful bidders to match Essel’s price in a meeting held in July.
“The Commission adopts the tariff of Rs 7.02 unit for the aforesaid nine bidders (which have been commissioned) for a period of 12 years and for the next 15 years the bidders shall be bound to supply power to UPPCL at average power purchase cost as agreed in the PPA subject to a ceiling of Rs 7.02 a unit,” Commission chairman Suresh Agarwal said.