UP govt to purchase 1500 MW of electricity at cheaper rates for next 25 years

Public Lokpal
May 06, 2025

Lucknow : Chief Minister Yogi Adityanath-led Uttar Pradesh government has decided to buy a total of 1500 megawatts of energy from a thermal project for a period of 25 years. The private company offering the lowest tariff rate (Rs 5.38 per unit) in the bidding has won the project.

This decision, which will save UP Power Corporation (UPPCL) about Rs 2958 crore in 25 years, was taken in a cabinet meeting held under the leadership of CM Yogi on Tuesday, UP government said in a statement.

With this new initiative of the Yogi government, Uttar Pradesh will start getting 1500 MW of electricity at a very cheap rate from the year 2030-31. This new project is much more economical than the existing and upcoming thermal projects.

While electricity is being available from projects like Jawaharpur, Obra, Ghatampur, Panki at the rate of Rs 6.6 to Rs 9 per unit, under this project proposed under DBFOO, after the commissioning of the plant in 2030-31, electricity will be available at the rate of only Rs 6.10 per unit.

State's Energy Minister AK Sharma, informing about the cabinet's decision, said that to meet the state's energy demand and make Uttar Pradesh self-reliant, we have decided to buy some energy through a bidding process.

"In the same sequence, we have moved forward with the 1600 MW power plant. Our condition was that we will buy electricity only when this plant is set up in Uttar Pradesh. Under the process, Request for Qualification was issued in July 2024, in which 7 companies participated. Out of these, 5 companies participated in the Request for Proposal (Financial Bid). After negotiations with the private company whose quotation was the lowest among the five companies, they offered the lowest bid of Rs 5.38 per unit including Rs 3.727 per unit in fixed charge and Rs 1.656 per unit in fuel charge, which was accepted. Power Supply Agreement (PSA) will be signed for a period of 25 years at this tariff." Energy Minister AK Sharma said according to the statement.

AK Sharma told that this private company had done a similar process with Maharashtra in August last year. "Our deal is also cheaper than that. Not only this, even before this, our big power purchase agreements have been done, the current deal is cheaper than that too. The electricity of this current process will be much cheaper than the electricity contracts of our public sector power plants," he added. Sharma said that even when the power plant will be ready in 2030-31, the tariff will be Rs 6.10, which will be cheaper than the electricity of our public plants. According to the study of Central Electricity Authority and Uttar Pradesh Electricity Regulatory Commission, the state will need about 10,795 MW of additional thermal energy by the year 2033-34. Along with this, a roadmap has also been prepared for 23,500 MW of renewable energy. The bid process was started under the DBFOO model to meet the demand for thermal energy, UP government said in the statement.

This thermal project will start in the financial year 2030-31. This will not only meet the base load energy needs, but industries and domestic consumers in the state will also get stable and cheap electricity.

DBFOO i.e. Design, Build, Finance, Own and Operate is a system in which the private company itself constructs, finances, owns and operates the project. The government only provides coal linkage and purchases power.

(ANI)