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UPERC Approves Tariff for 375 MW / 1,500 MWh Standalone BESS Project

The Uttar Pradesh Electricity Regulatory Commission (UPERC) has approved the tariff discovered through a competitive bidding process for a 375 MW / 1,500 MWh standalone battery energy storage system (BESS) project to be developed in Uttar Pradesh under the Viability Gap Funding (VGF) scheme.

The Commission also sanctioned a trading margin of Rs 0.07 per kWh payable to SJVN, which is acting as the intermediary procurer and bid implementation agency for the project.

UPERC observed that the tariff discovery process was conducted in compliance with the Ministry of Power’s guidelines and Section 63 of the Electricity Act, 2003. It further approved the Battery Energy Storage Sale Agreement (BESSA) executed between SJVN and UP Power Corporation (UPPCL) for a duration of 15 years.

The Commission directed all concerned parties to ensure timely execution of the project to enable UPPCL to effectively utilise the storage capacity for peak load management and grid support.

Project Background

SJVN had approached the Commission seeking adoption of the tariff discovered through a tariff-based competitive bidding process for procuring BESS capacity on behalf of UPPCL. The project involves setting up a standalone energy storage facility near the 400 kV / 220 kV Garautha substation in Jhansi, with the entire contracted capacity to be supplied to UPPCL on a back-to-back basis.

The bidding process saw participation from 21 bidders, offering a combined capacity of 3,395 MW / 13,580 MWh. Following technical evaluation, 19 bidders were found qualified, after which financial bids and an electronic reverse auction were conducted.

Patel Infrastructure and Enerica Infra 3 emerged as the successful bidders, with each awarded 187.5 MW / 750 MWh of capacity. The quoted tariffs stood at Rs 359,000 per MW per month and Rs 359,999 per MW per month, respectively.

Trading Margin and Regulatory Review

A key issue examined by the Commission was the trading margin of Rs 0.07 per kWh agreed between SJVN and UPPCL. UPPCL had initially sought clarity on whether the margin should be calculated as 0.5% of the tariff or as a fixed per-unit charge.

SJVN submitted that the Rs 0.07 per kWh margin was consistent with the Ministry of Power’s BESS guidelines and aligned with margins adopted by other government agencies. UPPCL subsequently agreed to the proposed margin, citing tight timelines under the VGF programme and the strategic importance of the project for meeting peak power demand.

Commission’s Findings

UPERC concluded that the bidding process was transparent, competitive, and fully aligned with applicable government guidelines. On the trading margin, the Commission noted that the BESS guidelines permit either a margin of up to 0.5% of capacity charges or Rs 0.07 per kWh, and that the approved margin fell well within the prescribed framework.

The Commission also referred to the Central Electricity Regulatory Commission’s trading licence regulations, which allow mutually agreed trading margins in long-term contracts. Additionally, UPERC cited its earlier approval of UPPCL’s procurement of the same BESS capacity, noting that the project would support renewable energy integration, ease transmission congestion, and strengthen peak demand management in the state.

Based on these observations, the Commission formally adopted the discovered tariff and approved the associated trading margin.