UERC Adopts Tariffs for UJVN’s 76 MW/190 MWh Battery Storage Projects Under VGF Scheme

The Uttarakhand Electricity Regulatory Commission (UERC) has adopted the capacity charges discovered through tariff-based competitive bidding for four standalone Battery Energy Storage System (BESS) projects being developed through UJVN Ltd., the state’s hydropower generator. The projects, located at Dhakrani, Khatima, Pathri and Tiloth, have a combined capacity of 76 MW/190 MWh and are supported under the Ministry of Power’s Viability Gap Funding (VGF) scheme through the Power System Development Fund (PSDF).

The common order, dated September 30, 2026, was passed by a bench headed by Chairman M.L. Prasad. It disposes of eight petitions: four by UJVN Ltd. for tariff adoption under Section 63 of the Electricity Act, 2003, and four by Uttarakhand Power Corporation Limited (UPCL) seeking approval of the related Battery Energy Storage Purchase Agreements (BESPAs).

Adopted Capacity Charges

The adopted capacity charges and selected developers are as follows:

All four charges are well below the ceiling of Rs. 3,96,747/MW/month fixed by UERC on January 6, 2026, on which UJVN’s tenders were based. The Commission also noted that they are lower than recent discoveries in Delhi (Rs. 2.99 lakh/MW/month for a 12.5 MW/25 MWh project) and Punjab (Rs. 3.35–3.44 lakh/MW/month in May 2026 awards).

Bidding Process

UJVN issued the Request for Proposal (RfP) for Dhakrani, Khatima and Tiloth (60 MW/150 MWh) as a single package on a Build-Own-Operate-Transfer (BOOT) basis on February 2, 2026, and a separate RfP for Pathri on February 6. After three extensions, bidding closed on March 30, 2026, with 31 bids for the package and 12 for Pathri. Financial bids of six to seven technically qualified bidders per project were opened on July 30, 2026.

Patanjali Renewable Energy quoted the lowest tariff in all four tenders. As the package RfP limited a single bidder to two of its three projects, Patanjali opted to forgo Tiloth, which the second-ranked bidder, Armee Infotech, accepted at the L-1 rate.

Regulatory Background

The Ministry of Power allocated 500 MWh of standalone BESS capacity to Uttarakhand under the VGF scheme, with support of Rs. 18 lakh/MWh. Of this, 250 MWh is being implemented by UJVN and the remaining 250 MWh by UPCL.

After the tenders were floated, UERC’s suo-moto order of June 4, 2026 revised the generic benchmark capacity charge for standalone BESS to Rs. 2,59,244/MW/month for FY 2026-27. On July 27, 2026, the Commission rejected petitions by UJVN and UPCL seeking continuation of the earlier ceiling, but clarified that the generic benchmark does not apply to VGF-supported projects, whose tariffs must be discovered through bidding and adopted under Section 63.

Conditions Attached to Adoption

The Bid Evaluation Committee certified that the process conformed to the Ministry of Power’s BESS Guidelines of March 10, 2022, except for the use of e-reverse auction, a deviation for which the Government of Uttarakhand’s approval was still pending. UERC has, therefore, adopted the charges subject to the state government approving this deviation. Any reduction in GST must be passed on to consumers, and UJVN and UPCL must publish the successful bidders and their tariffs on their websites for at least 30 days after the BESPAs are executed.

Tripartite Agreement and Key BESPA Terms

As UJVN is neither a trading licensee nor a notified Implementing Agency, it does not strictly qualify as an Intermediary Procurer under the BESS Guidelines. Based on an understanding reached between UPCL and UJVN on September 24, 2026, the Commission recognised UJVN as UPCL’s authorised representative and directed that a single tripartite agreement be executed among UPCL, UJVN and each developer. UJVN, which conducted the tender and is providing its own land, will retain a margin of 5 paise/kWh.

Key contractual provisions directed by the Commission include:

• Payment: UPCL will pay the GST-inclusive charge plus UJVN’s margin; UJVN will pass the balance to the developer.
• Charging energy: UPCL will schedule and supply charging power free of cost.
• Land and commissioning: Land must be handed over on a right-to-use basis within two weeks of the order; commissioning is due 18 months from the later of the BESPA effective date or land handover.
• Term: 12 years from the Commercial Operation Date (COD).
• Performance: 95% annual availability, with liquidated damages at twice the capacity charge for shortfall, and 85% monthly AC-to-AC round-trip efficiency.
• VGF disbursement: 20% at financial closure, 50% at COD and 30% after one year of operation; UJVN can recover disbursed funds with interest if the project is terminated for developer default.
• Quality and disposal: Refurbished battery cells are not permitted, and end-of-life batteries must be handled under the Hazardous and Other Wastes Rules, 2016 and the e-Waste Rules, 2016, as cited in the order.

Delay and termination clauses must also align with the BESS Guidelines, under which a delay beyond nine months leads to reduction of contracted capacity and encashment of the performance guarantee.

Outlook

The order clears the way for UJVN’s 190 MWh portfolio to move towards execution. The projects will support peak demand management and integration of hydro and renewable power, while helping UPCL meet its Energy Storage Obligation, which rises to 4% of total consumption by FY 2029-30.

Official Sources

1. UERC – Common Order dated 30.09.2026 in Petition Nos. 67 to 74 and 22 of 2026 (Tariff adoption and BESPA approval for UJVN BESS projects): https://cdnbbsr.s3waas.gov.in/s3cf05968255451bdefe3c5bc64d550517/uploads/2026/09/202609301932337982.pdf
2. UERC – Miscellaneous Orders 2026: https://uerc.uk.gov.in/miscellaneous-orders-2026/
3. UERC – Suo-moto Order dated 04.06.2026 on Benchmark Capital Cost and Capacity Charges for FY 2026-27: https://cdnbbsr.s3waas.gov.in/s3cf05968255451bdefe3c5bc64d550517/uploads/2026/06/202606041152463663.pdf
4. UERC – Order dated 27.07.2026 on UJVN Ltd.’s Review Petition: https://cdnbbsr.s3waas.gov.in/s3cf05968255451bdefe3c5bc64d550517/uploads/2026/07/202607272030360671.pdf
5. UERC – Order dated 27.07.2026 on UPCL’s Petition regarding Benchmark Capacity Charge: https://cdnbbsr.s3waas.gov.in/s3cf05968255451bdefe3c5bc64d550517/uploads/2026/07/20260727719279653.pdf