Expanding Foothold

Uttar Pradesh plans a massive scale-up of solar power capacity

Uttar Pradesh is the most populous state in India, with a large and ever-growing energy demand. Given the global focus on green power, Uttar Pra­de­sh has also set out to ramp up its clean power capacity. This de­velopment is primarily led by solar power, which has pro­ven to be the most conducive source of renewable en­ergy in the landlocked state, situated in the northern plains.

Uttar Pradesh has a total installed renewable energy capacity of 4.26 GW as of Oc­tober 2021, with roughly 2 GW of commissioned solar power capacity. Further, with over 2.2 GW of installed capacity, Ut­tar Pradesh is in the second position, after Maharashtra, in the bioenergy space, ow­ing to the abundance of sugar industries in the state. Including hydropower, the to­tal installed renewable capacity makes up about 27 per cent of the total power capa­city in the state. Currently, non-hydro ins­tall­ed renewable power capacity makes up about 15 per cent of the total installed po­wer capacity in the state, up from nearly 12.5 per cent in May 2019. The Uttar Pra­­desh New and Renewable Energy De­ve­lopment Agency (UPNEDA) has been active in the tendering space and has co­me up with multiple tenders for solar power development over the past year.

Renewable Watch highlights key developments, upcoming projects and outlook for the renewable energy sector in Uttar Pradesh…

Solar parks

Uttar Pradesh’s solar ambition has been on the rise. Most notably, this can be seen in the form of plans for large solar parks across the state. The state has four upco­ming solar parks, which will cumulatively contribute 2,840 MW of power generation capacity. This includes the 1,200 MW Ja­laun Solar Park, 600 MW Lalitpur So­­lar Pa­rk, and 600 MW Jhansi So­lar Pa­rk. Uttar Pradesh has also been promoting rooftop solar uptake across the state. The Uttar Pradesh government in­te­n­ds to bu­ild solar power projects tota­ll­ing a ca­pa­city of 10,700 MW by 2022, after se­tting up 2,123 MW of solar projects in the previous five years.

The foundation for the 600 MW park at Jhansi was laid in November 2021. The park is being constructed at a cost of over Rs 30.13 billion and is expected to help pro­­­vide electricity at a cheaper rate. In September 2021, UPNEDA invited fresh bids to set up 200 MW of solar projects in the state’s solar park. The ceiling tariff for the tender was set at Rs 3 per kWh. The ca­­pacity tendered was for projects to be set up in three locations in Jalaun district (150 MW) and Kanpur Dehat (50 MW) in the Uttar Pradesh Solar Park. Earlier, UPNEDA had floated a tender to develop 275 MW of solar capacity in the solar park, of which 200 MW was allotted. Later, 125 MW of the allotted capacity was cancelled. The remaining part of the allotted capacity, 75 MW, is being developed by SJVN.

Although solar activity has picked up in the state, it is also facing some obstacles, with players being sceptical about the tariff being a key concern. For instan­ce, earlier this year, UPNEDA anno­unced the cancellation of its 500 MW solar auction. The auction was cancelled in ex­pe­ctation of lower tariffs in the future. UPNEDA had issued the tender in 2019, while the auction was conducted in Feb­ruary 2020. As per the tender document, UPNEDA was supposed to issue the letter of intent (LoI) by May 15, 2020. How­ever, it failed to iss­ue the LoI within these timelines, des­pite regular follow-ups by the winning developers, and requested an extension of the bid period validity on va­rious occasions. The winners of the au­ction in­cluded a consortium of Saudi Ara­bia’s Al Jomaih and India’s Jakson Pow­er, which won 100 MW, Singapore’s NV Vogt, which secured 50 MW, and Vijay Printing and SolarArise, which secured 25 MW and 9 MW res­pectively. UPNEDA sought examples of low tariffs in Rajas­than and Gujarat for its ex­pectation of lower tariffs. Meanwhile, de­velopers ar­g­ue that tariffs are not uniform across India and that projects in Utt­ar Pra­desh would have relatively higher tariffs.

Group captive and open access

In the solar segment, group captive and open access routes for solar power procurement are also beginning to gain traction in the state. To promote the use of so­lar energy by large industries and corporations, Uttar Pradesh Power Transmis­si­on Corporation Limited (UPPTCL) came up with the open access scheme for the state. In the recent past, the Uttar Pradesh government has initiated a process to facilitate procurement of power by industrial units through short-term open acc­ess, thereby fulfilling a long-standing de­ma­nd. The open access power policy aims to help large consumers meet their quota of renewable purchase obligations (RPOs) as well as help the state overco­me power shortages, as new power producers come into the market.

Large companies such as Airtel have also ventured into setting up captive solar ca­pacity in the state. Airtel has commissio­n­ed a 14 MWp captive solar plant in Uttar Pradesh, which will help the company meet the power requirements of its core and edge data centres in the state. The project is in Tilhar, in Shahjahanpur district of Uttar Pradesh. Earlier, Airtel had acquir­ed a 26 per cent equity stake in AMP Solar Evolution and the Tilhar project is the first of the two solar plants being set up by the company, in partnership with AMP Energy. The second plant, which is being set up in Begampur, is expected to be commissio­ned in the next quarter. Data centres have large power requirements. Nxtra by Air­tel currently operates 10 large and 120 edge data centres across India. It aims to meet over 50 per cent of its power input through renewable energy sources during financial year 2022.

In October 2021, MYSUN, a Delhi-based distributed solar company, secured 140 MW of solar projects under the captive/ open access mode in Uttar Pradesh. The projects were awarded by UPPTCL. These projects will be developed across multiple districts, primarily in Western Uttar Pra­de­sh, under UPPTCL’s open access scheme. Overall, about 1.5 GW of grid substation capacity was put up for allocation. In this round, connectivity approvals were granted for central, western and eastern Uttar Pradesh. Besides such projects, rooftop solar is on the rise. With over 260 MW of roof­top ca­pa­city installed so far, the state plans to install a larger capacity in the near future across residential, commercial as well as industrial rooftops. In June 2021, UPNEDA invited bids for the installation of grid-connected rooftop solar projects under the capex model across government buildings at various locations in Uttar Pradesh.


Currently, Uttar Pradesh has 2,179 MW of installed biopower which is higher than most other states in the country, barring Maharashtra. There are plenty of opportunities to set up power plants of various ca­pa­cities, based on a variety of te­ch­ni­ques (gasification, cogeneration and co­m­bustion) by using biomass other than baga­sse. The biomass gasification technique mainly uses rice husk and udi biomass. Meanwhile, cogeneration power projects of MW capacity, which are usually based on combustion techniques us­ing rice husk or other agro-residues, are utilised in various industries. These projects are set up in industries such as pulp and paper mills. At present, the state’s bio­mass ca­pacity includes about 1,957 MW of ba­ga­sse-based cogeneration, alo­ng with ab­out 160 MW of non-baga­sse-ba­sed co­generation.

While the tariff for bioenergy still remains on the higher side, discussions have been on to push down these prices. Since Uttar Pradesh is a major agrarian state, it has vast availability of feedstock. If profitable returns are ensured, this could result in a sustainable supply chain for the bioenergy industry. However, the tussle between expected tariffs and expected returns continues. Earlier, in May 2021, the UPERC ad­opted a levellised tariff of Rs 4.53 per kWh for the purchase of 20 MW (+/-25 per cent) of bagasse-based power.

Although currently at only 62 MW capacity, the state has more than 150 MW of en­ergy production potential through processing of waste of various ind­us­trial units – distilleries, food processing industries, dairies, pulp and paper mills. By establishing these projects, the conce­rned units not only help in keeping the en­vi­ron­ment clean but also meet the energy re­quirements of the industry.

Electric mobility

In addition to scaling up renewables, Uttar Pradesh’s clean movement also encompasses its plans for upscaling electric mo­bility to curb fossil fuel-based emissions. Uttar Pradesh notified its Electric Vehicle Manufacturing Policy in 2019 to promote manufacturing and adoption of electric vehicles (EVs) in the state. Under its EV po­­licy, the state government currently off­ers 100 per cent tax exemption for electric two-wheelers and around 75 per cent tax exemption for other EVs. Further, exemptions and incentives are being provided on land for the first 1,000 EV charging stations. The policy aims to achieve 70 per ce­nt electric public transportation on iden­tifi­ed green routes across 10 cities by 2030. Further, the state also looks to set up ne­arly 0.2 million slow and fast charging and battery swapping stations by 2024.

On the EV front, Uttar Pradesh has been performing commendably well. According to a recent report by the government, Utt­ar Pradesh has the highest registered EVs at 255,700, followed by Delhi and Karna­taka. This makes up nearly 30 per cent of the total 870,141 EVs registered across the country. This indicates a favourable EV uptake trajectory for the state. Further, the state government also aims to make Uttar Pradesh a manufacturing and battery hub by encouraging setting up of manufacturing zones and parks for producing EVs and EV batteries.

Discoms and RPOs

The distribution companies (discoms) in the state have huge scope for improvement, especially in terms of the financial perfor­ma­n­­ce. According to the ninth edition of the credit rating for discoms, Paschi­man­chal Vidy­ut Vi­ta­ran Nigam Limited had the highest grade with only a B+, while Kanpur El­ec­tricity Supply Company Limi­ted and Madh­yanchal Vidyut Vitaran Ni­gam Limi­ted rece­i­v­ed a B, and Purvan­chal Vidyut Vitaran Nigam Limi­ted, along with Dakshi­nanchal Vidyut Vi­ta­ran Nigam Limited were given a C+.  Earlier this year, the UPERC, directed Uttar Pradesh Power Co­r­po­ration Limit­ed to deposit Rs 72.45 billion in the RPO (renewable purchase ob­l­igation) Regula­tory Fund, including Rs 14.59 billion on ac­c­ount of the shortfall in RPO compliance until the financial year 2020-21 and Rs 57.85 billion against the projected RPO re­quirements for the financial year 2021-22.


Some of the key challenges that the rene­wable sector in Uttar Pradesh faces are re­lated to the implementation of policy and regulatory measures, possible land use issues, gaps in infrastructure to support intermittent power, financial reliability of discoms and political impedimen­ts. Since the state is densely populated and an industrial hub, there is a huge po­w­er de­mand, which could be met through cleaner sources. Further, if the placement of upcoming projects is carefully planned, transmission losses could be minimised by finding sites closer to the demand sou­rces. Promoting solar rooftop projects on a bigger scale will also be helpful to this end. Overall, solar power is ex­pec­ted to lead the energy transition for the state of Uttar Pradesh.

Renewable energy uptake in the state is definitely looking up for the coming years. However, despite efforts to promote rene­w­able energy uptake, the share of thermal power still remains very high in the state’s energy mix. If the pace is continued for scaling up renewables, this state of thermal dominance in the power mix may ch­ange in the future.


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