UPERC Approves 375 MW / 1,500 MWh Standalone BESS Procurement for UPPCL

In a regulatory order dated September 1, 2025, the Uttar Pradesh Electricity Regulatory Commission (UPERC) approved Petition No. 2225 of 2025, authorizing the Uttar Pradesh Power Corporation Ltd. (UPPCL) to procure 375 MW / 1,500 MWh of standalone Battery Energy Storage Systems (BESS). The project will be facilitated by SJVN Limited, acting as the Battery Energy Storage Implementing Agency (BIA). This capacity allocation is situated within a broader national framework established by the Ministry of Power to develop 30 GWh of BESS capacity across 15 states to ensure grid stability and renewable energy integration.

Technical Specifications

The procurement is structured under a “Tolling Model,” wherein UPPCL provides the charging power and utilizes the storage and discharge capabilities of the systems. The projects will be integrated into the State Transmission Utility (STU) network at the 400 kV/220 kV Garautha substation in Jhansi.

Commercial and Bidding Analysis

The Commission adopted the competitively discovered tariffs under Section 63 of the Electricity Act, 2003. The tariffs discovered through the SJVN-led e-reverse auction represent some of the most competitive pricing for 4-hour discharge BESS in the Indian market to date. At approximately ₹3.59 lakh per MW per month, these rates are significantly lower than the ₹4.44 lakh per MW per month recently discovered in Bihar’s 125 MW/500 MWh tender.

Successful Bidders and Allocations

Viability Gap Funding (VGF) Financial support is provided through the Ministry of Power’s Power System Development Fund (PSDF). VGF is capped at ₹2.7 million per MWh or 30% of the capital cost, whichever is lower.

Regulatory Framework and Contractual Structure

The procurement follows a back-to-back contractual arrangement to ensure transparency and risk mitigation. SJVN Limited, as the intermediary procurer, will sign a 15-year Battery Energy Storage Purchase Agreement (BESPA) with the developers and a corresponding Battery Energy Storage Sale Agreement (BESSA) with UPPCL. SJVN is authorized to charge a trading margin of ₹0.07/kWh.

The Commission approved several critical deviations from standard bidding guidelines to align with VGF requirements:

• Financial Closure: The timeline for achieving financial closure was reduced from 12 months to 6 months.
• Payment Security: The mechanism was simplified to a revolving Letter of Credit (LC) for energy billing.
• Termination Compensation: Revised to a fixed payout equivalent to six months of energy billing.

Project Timeline and Milestones

1. Agreement Term: 15-year operational period under the BESPA/BESSA framework.
2. Commissioning Mandate: Projects must achieve full commercial operation within 18 months of signing the BESPA.
3. Extension Allowance: A maximum 6-month extension is permitted, subject to liquidated damages.
4. VGF Disbursement: Funding is released in three tranches: 20% at financial closure, 50% at Commercial Operation Date (COD), and 30% linked to annual performance over the first three years.

Operational and Strategic Requirements

• Renewable Energy Charging: To prevent the storage of “grey” energy, UPERC has mandated that the BESS must be charged exclusively using power sourced from renewable energy (RE).
• Strategic Siting: The selection of the Garautha substation in Jhansi is intended to reduce transmission congestion and avoid interstate transmission losses by keeping storage and discharge localized within the state grid.
• Land Use: Approximately 30 acres of land owned by the Uttar Pradesh Power Transmission Corporation Limited (UPPTCL) will be provided on a lease or right-to-use basis.
• Technology Standards: Bidders are required to deploy commercially established technologies that comply with existing grid standards and safety norms to ensure long-term reliability.