UP nudges solar companies to cut power tariff on older pacts
NEW DELHI: Following a steep fall in solar tariffs in the last two years, Uttar Pradesh is pressuring solar power project developers to cut rates of electricity agreed upon in earlier contracts even though the pacts were signed when equipment prices were high.
Winners of an auction conducted in September 2015 have been urged to voluntarily lower power tariff of plants nearing completion.
Uttar Pradesh’s nodal agency for renewable energy New Energy Development Agency (NEDA) declared results of the auction in 2015, after which contracts were signed with 15 developers at tariffs ranging between Rs 7.02 per kwH and Rs 8.60 per kwH. The biggest winners were Adani Green Energy which bagged a 50-MW project at a tariff of Rs 8.43 per kwH and Essel Infra Projects which also won a bid for 50 MW at a tariff of Rs 7.02 per kwH.
However, they have all recently received the pro-forma of a letter the UP Electricity Regulatory Commission (UPERC) wants them to sign by which they would voluntarily agree to lower solar tariffs to Rs 7.02 per kwH, the price that was proposed by the lowest bidder during the auction.
“Subsequent to approval of the tariff quoted by the firm by the UP cabinet, PPA [power purchase agreement] was executed by the firm with UPPCL [Uttar Pradesh Power Corporation Ltd],” the suggested letter says. “On adoption of tariff, UPERC directed for reducing the quoted tariff. As per the direction of UPERC, we give our consent for tariff of Rs 7.02 per kwH.”