UPERC Approves Uttar Pradesh Power Purchase from Bhutan Project

The Uttar Pradesh Electricity Regulatory Commission (UPERC) approved Uttar Pradesh Power Corporation Ltd (UPPCL) to procure 511 MW of hydropower from the 600 MW Khorluchu Hydro Power Project in Bhutan on 27 May 2026. The project is a joint venture between Tata Power, which holds a 40% stake, and Bhutan’s Druk Green Power Corporation, which holds a 60% stake.

Khorluchu Hydro Power Project

The Khorluchu Hydro Power Project is located in Bhutan and has an installed capacity of 600 MW. UPPCL will purchase 511 MW under a 30-year power sale agreement (PSA) at the Indo-Bhutan periphery. The project is designed with four-hour storage capability. Such storage-based hydropower projects can supply electricity during peak demand hours and support grid balancing.

Tariff and Supply Schedule

The approved tariff is ₹6.75 per unit, or per kWh, at the border. This tariff includes a bus-bar levelised tariff of ₹6.47 per kWh and transmission charges of ₹0.28 per kWh up to the Indo-Bhutan border, calculated under the Central Electricity Regulatory Commission (CERC) Tariff Regulations, 2024. Electricity supply is scheduled to begin on 1 May 2030 and will continue annually from May to October, which are the peak demand months in Uttar Pradesh.

Hydropower and Purchase Obligations

Hydropower is electricity generated from the kinetic and potential energy of flowing or stored water. Hydro Purchase Obligation (HPO) is a regulatory requirement linked to the purchase of electricity from hydropower sources. UPPCL has stated procurement from the project will support its long-term clean energy portfolio and energy security. The project is expected to generate about 1,748 million units (MU) of electricity annually for Uttar Pradesh.

Important Facts for Exams

• Bhutan is a Himalayan country with major hydropower potential due to its river systems and mountainous terrain.
• Tata Power is one of India’s major integrated power companies and has interests in generation, transmission, and distribution.
• The Central Electricity Regulatory Commission is the central regulator for tariff-related matters in inter-state electricity transactions in India.
• Million units (MU) is a common Indian power-sector unit, where 1 MU equals 1 million kilowatt-hours.