UPCL will now have to buy electricity from the market heavily, UPCL is looking for alternative ways, know the reason

UPCL in Uttarakhand: The 5 percent ban imposed on short-term power purchases for Uttarakhand Power Corporation Limited (UPCL) has posed a new challenge. In the new tariff order issued by the Uttarakhand Electricity Regulatory Commission, it has been made clear that UPCL will now be able to buy only five percent i.e. maximum of 90 crore units of electricity from the market. Whereas till now the corporation has been buying an average of 20 percent of electricity every year through short term market, Indian Energy Exchange and short term tenders.

UPCL will supply a total of 1804.6 crore units of electricity in the year 2024-25. Most of this supply, about 80 percent, comes from the state's hydropower projects, central pool, long term and short term agreements. The remaining 20 percent is met through short term deals. But now the regulatory commission has reduced this limit to just five percent, due to which the corporation will have to make alternative arrangements for the remaining 15 percent i.e. about 270 crore units of electricity.

Short term power purchase figures in previous years

2022-23- 272.26 crore units

2023-24- 360.56 crore units

2024-25 (till December)- 230.39 crore units

For this year, UPCL had expressed the need for 261.29 crore units of electricity under short term, while this requirement is likely to increase further in the coming years.

2025-26- 261.29 crore units
2026-27- 308.29 crore units
2027-28- 372.53 crore units

Difficulties increased due to new instructions

The Regulatory Commission has clarified that if UPCL needs additional power, it should buy power through long-term PPA (Power Purchase Agreement) of 25 years or short-term tenders of at least 10 years. But in practice it is not so easy.

UPCL Director (Project) Ajay Kumar Agarwal had recently informed in the public hearing that the corporation has issued tenders for long-term power purchase nine times so far, but no private company showed interest. At the same time, companies are not ready to cooperate even for short term. At present, only a 200 MW solar power project has been signed with PPA, which is under the PSP project of Tehri Hydro Development Corporation (THDC).

UPCL will have to look for alternative measures to avoid the crisis

In this situation, if the demand for electricity suddenly increases during summer or peak demand, then UPCL will have limited options to buy electricity immediately. This can lead to a power crisis in the state. Experts believe that even though imposing a ban on short-term purchases may be appropriate from a regulatory point of view, this decision can become practically challenging until long-term sources are ensured.

Now UPCL is looking for alternative measures to overcome this crisis. The corporation is trying to make the terms of PPA flexible to attract private companies and make more and more long-term agreements with renewable energy sources. Along with this, the corporation is also thinking about how to increase its own production capacity in the state.

UPCL is facing difficulty in power supply

The aim of the regulatory commission is to provide cheap and stable power supply to the consumers, but at the ground level, UPCL is facing difficulties in ensuring long-term supply. In such a situation, it will be interesting to see how the corporation manages to maintain its supply system amid this policy. If alternative sources are not arranged in time, the state may have to face a power crisis in the coming times.