UPERC Approves Uttar Pradesh's Purchase of 511 MW Hydropower from Bhutan's Khorluchhu Project

Key Facts

• The Uttar Pradesh Electricity Regulatory Commission (UPERC) approved on May 27, 2026, a Power Sale Agreement allowing Uttar Pradesh Power Corporation Ltd (UPPCL) to purchase 511 MW of hydropower from the Khorluchhu Hydro Power Project in Bhutan.
• Khorluchhu Hydro Power Project has an installed capacity of 600 MW and is a strategic joint venture between Druk Green Power Corporation (60% share) and Tata Power Trading Company Limited (40% share).
• The power purchase agreement spans 30 years, with supply starting May 1, 2030, during the peak demand months of May to October annually, which are critical for Uttar Pradesh's power needs.
• The approved tariff is fixed at ₹6.75 per kilowatt-hour (kWh) at the Indo-Bhutan border; this includes a bus-bar levelised tariff of ₹6.47 per kWh plus transmission charges of ₹0.28 per kWh, calculated as per Central Electricity Regulatory Commission (CERC) Tariff Regulations, 2024.
• The hydropower project features a four-hour storage capacity, enabling the supply of electricity during peak demand periods and aiding in grid balancing.
• Annual expected generation allocated to Uttar Pradesh from this purchase is approximately 1,748 million units (MU).
• Hydro Purchase Obligation (HPO) of UPPCL will be supported by this procurement, helping meet regulatory renewable energy targets.

Background & Context

The Khorluchhu Hydro Power Project is part of India-Bhutan bilateral cooperation in renewable energy development, capitalizing on Bhutan’s significant hydropower potential due to its mountainous terrain and river systems. Tata Power, an integrated Indian power company with a diversified portfolio exceeding 26 GW capacity, partners with Bhutan’s Druk Green Power Corporation, the country’s sole hydropower generation utility, to develop and operate this project. The hydropower import aligns with Uttar Pradesh's strategy to diversify its energy mix, enhance energy security, and meet rising peak summer demands with cleaner sources. The UPERC approval follows regulatory protocols under the Electricity Act, 2003, confirming tariff structures compliant with CERC norms and ensuring price certainty for consumers.

Why This Matters for Exams / Exam Relevance

This case exemplifies key areas often tested in competitive exams: cross-border energy cooperation (India-Bhutan relations), renewable energy policy, regulatory roles of bodies like UPERC and CERC, and strategic energy security initiatives by Indian states. Understanding the technical details such as capacity, tariff mechanisms, joint venture structure, and timeline aids in grasping broader themes in Indian energy governance. It also sheds light on the Hydro Purchase Obligation (HPO) concept, pivotal in renewable energy frameworks.

Points to Remember

• UPERC approval date: May 27, 2026.
• Hydropower capacity contracted: 511 MW of a 600 MW project.
• Project joint venture partners: Druk Green Power Corporation (Bhutan) 60%, Tata Power Trading Company Limited (India) 40%.
• Tenure of procurement: 30 years starting May 1, 2030.
• Electricity supply period: Annually from May to October, covering the high-demand season.
• Tariff fixed at ₹6.75 per unit, inclusive of transmission charges, under CERC 2024 regulations.
• Project benefits: four-hour storage for peak load support and grid stability.
• Approximate annual generation for UP: 1,748 million units.
• Supports UPPCL’s clean energy portfolio expansion and compliance with Hydro Purchase Obligation.
• UPPCL is the power purchaser; Tata Power Trading Company is the intermediary trader.