UPPCL Concludes 375 MW/1,500 MWh Standalone BESS Auction; Tariffs Discovered at ₹6.45–₹6.46/kWh

Uttar Pradesh Power Corporation Limited (UPPCL) has finalized its auction for the development of standalone Battery Energy Storage Systems (BESS) totaling 375 MW / 1,500 MWh within the state. Conducted under the Viability Gap Funding (VGF) Tranche II framework—supported by the Power System Development Fund (PSDF)—the tender aims to bolster grid stability and manage peak demand on a Build-Own-Operate (BOO) basis. While the tender sought a total capacity of 375 MW, the auction concluded with the allocation of 295 MW, leaving 80 MW of the original tender unallocated in this round.

Developer Allocation and Tariff Results

The competitive bidding process resulted in three developers securing projects at tariffs ranging from ₹6.45/kWh to ₹6.46/kWh. The largest allocation was awarded to KCC Buildcon, which secured 50% of the total available bid quantum.

Note: The total awarded capacity is 295 MW. The remaining 80 MW of the 375 MW tender capacity remains unallocated.

Key Project and Technical Specifications

Winning developers must adhere to stringent technical and operational requirements as dictated by the Request for Selection (RfS) and upcoming Battery Energy Discharge Purchase Agreements (BEDPA):

• Storage and Cycling: Systems are rated for a 4-hour discharge duration (e.g., 62.5 MW/250 MWh). The BESS Developer (BESSD) must provide one complete charge-discharge cycle per day.
• Operational Windows and Constraints: UPPCL maintains “On-Demand” usage rights. However, a critical operational constraint prohibits discharging between 11:00 hrs and 17:00 hrs. UPPCL may split the daily discharge into a maximum of two sessions.
• Recovery and Cooling: A maximum of one hour of cooling time is permitted between charging and discharging sessions.
• Indigenous Requirements: In a significant Local Content Requirement (LCR), the Application Software of the Energy Management System (EMS) must be developed indigenously within India.
• Charging Sourcing: The BESSD is responsible for procuring charging power exclusively from Renewable Energy (RE) sources.
• Grid Connectivity: Projects must interconnect with the Uttar Pradesh State Transmission Utility (UP-STU) network at a minimum voltage of 132 KV. The BESSD is responsible for the construction of the Bay and all infrastructure up to the Interconnection Point.
• Location: Developers are permitted location flexibility anywhere within Uttar Pradesh.

Capacity Degradation and Replenishment

The 15-year contract period accounts for a specific glide path regarding system efficiency. Under Table A of the RfS, the Minimum Dispatchable Annual Energy (MDAE) follows a degradation curve starting at 98% in Year 1 and tapering to 70% by Year 15.

The BESSD is solely responsible for periodic replacements or replenishments of battery cells and system capacities at their own cost to ensure these annual guaranteed ratings are met. Outage time required for such replenishment will be categorized as an “Accountable BESS Outage” for availability calculations.

Financial Support and VGF Parameters

To ensure project viability, the auction utilized a VGF mechanism capped at ₹18,00,000/MWh.

• Disbursement Tranches: VGF is released in three stages:
  1. 20% upon achieving financial closure.
  2. 50% upon the Commercial Operation Date (COD).
  3. 30% one year after the COD.
• Release Conditions: The disbursement of each VGF tranche is contingent upon the developer submitting separate electronic Bank Guarantees (e-BG) for the respective amounts, in addition to the standard Performance Bank Guarantee.
• Capital Cost Certification: Statutory Auditor-verified capital cost certificates must be submitted within six months of the COD.

Regulatory Milestones and Performance Penalties

The implementation timeline is strictly monitored from the Effective Date of the BEDPA:

1. Grid Connectivity: Application must be filed within 30 days of the Letter of Award (LoA).
2. BEDPA Signing: Execution must occur within 30 days of the LoA.
3. Financial Closure: 100% of project financing must be secured within 12 months of the BEDPA Effective Date.
4. Scheduled Commissioning Date (SCD): Full project capacity must be commissioned within 18 months of the BEDPA Effective Date.
5. Long-stop Date: A 6-month grace period beyond the SCD is allowed with penalties; beyond this, uncommissioned capacity is terminated.

Shortfall Penalties: The BESSD must maintain 95% monthly availability. Performance is measured by comparing the Actual Drawl Schedule against the On-Demand Drawl Requisition. If availability falls below the 95% threshold, liquidated damages are levied at 1.5 times the discharge energy tariff for the shortfall. Delays in commissioning result in the per-day encashment of the Performance Bank Guarantee (₹22,40,000/MW).