Uttar Pradesh Seeks Regulatory Relaxation For 40 MW Solar Project In Ayodhya

In a significant move towards the development of Ayodhya as a Solar City, the Uttar Pradesh Power Corporation Limited (UPPCL) and Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA) have jointly filed a petition under Section 86 of the Electricity Act 2003. The petition, along with applicable provisions of the UPERC Captive and Renewable Energy Generating Plants Regulations 2019, aims to seek approval for the procurement of power from a proposed 40 MW solar photovoltaic (PV) project in Ayodhya, Uttar Pradesh.

The petition specifically requests the relaxation of provisions outlined in the schedule of the UPERC CRE Regulations 2019, urging the Uttar Pradesh Electricity Regulatory Commission (UPERC) to permit UPPCL to execute a Power Purchase Agreement (PPA) with NTPC Green Energy Limited. This relaxation is sought to facilitate the procurement of power on a cost-plus basis from the 40 MW solar PV project in Ayodhya. Additionally, the petition seeks permission to submit the PPA for approval after the tariff is determined by the Central Electricity Regulatory Commission (CERC).

The backdrop of this petition lies in the government of Uttar Pradesh’s decision to transform Ayodhya into a Solar City, marked by the establishment of a 40 MW solar power project through NTPC Green Energy Limited. Notably, NTPC Green Energy Limited has already initiated significant renewable energy projects in the state, including a 225 MW ground-mounted utility-scale project and a 20 MW floating solar power project. During the Global Summit 2023, the company signed a Memorandum of Understanding (MOU) for a substantial investment of ₹10,000 crore.

The energy generated from the proposed 40 MW project in Ayodhya is earmarked for purchase by UPPCL, with the tariff determined by CERC on a cost-plus basis over 25 years. The petition highlights the strategic importance of this project in contributing to the government’s vision of reducing conventional energy demand in Ayodhya by 10% over the next five years, aligning with the Solar Policy 2022.

A key aspect of the petition is the allocation of 165.10 acres of land along the banks of the Saryu River by the government of Uttar Pradesh for the solar project. Due to the topography of the land, the petition emphasizes potential challenges in the competitive bidding process, estimating a four-month delay in securing bids. To expedite the development of Ayodhya as a Solar City, the proposal suggests awarding the 40 MW project to NTPC Green Energy Limited on a cost-plus basis.

The advisor to UP Noida has reinforced the government’s commitment to developing Ayodhya as a Solar City, emphasizing that the 40 MW solar project aligns with the UP Solar Policy 2022. The proposal is based on the Build Own Operate and Maintain (BOOM) model.

However, the UPERC has noted that the Modality of Tariff Determination Regulation 2022, issued on February 28, 2023, requires all power procurement under long-term and medium-term agreements to be conducted through competitive bidding, with proper approval from the commission. The commission suggests an amendment to the prayer in the petition, considering this regulatory framework. Furthermore, the UPERC emphasizes the need for detailed demand projections for Ayodhya City over the next five years to formulate a comprehensive roadmap for its transformation into a Solar City, in line with the UP Solar Policy 2022.

In conclusion, the petition for regulatory relaxation reflects the ambitious plans of the Uttar Pradesh government to leverage solar energy for the development of Ayodhya. The outcome of this regulatory process will play a crucial role in shaping the energy landscape of the historic city and contribute to the broader vision of a sustainable and renewable energy future for Uttar Pradesh.

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