Mumbai, Aug. 27 -- Madhya Pradesh Power Management Company Ltd (MPPMCL) and Uttar Pradesh Power Corporation Ltd (UPPCL) have signed a memorandum of understanding to establish a framework for 2,000 megawatt (MW) of peak power procurement and medium-term power banking that aims to optimise seasonal generation. The agreement covers procurement of peak capacity through competitive bidding and prioritises integrated solar and battery energy storage systems (BESS) to firm renewable supplies during critical hours. The two state utilities intend to use the arrangement to manage variability and ensure supply adequacy without relying on short-term market purchases.
The framework draws on contrasting seasonal demand patterns in the two states, with Madhya Pradesh exhibiting peak demand in the rabi season from October to March largely driven by agricultural loads, while Uttar Pradesh records peak consumption in the kharif and summer months from April to September. These staggered cycles are expected to allow the sharing of generation capacity and storage assets so as to smooth load profiles across seasons. Officials described the approach as a means to strengthen resource adequacy planning and enhance overall energy security.
The procurement exercise will begin immediately and will be executed through a transparent competitive bidding process, focusing on integrated solar and BESS projects capable of delivering firm power in peak windows. The initiative has been supported by consultants Mercados and is projected to attract investment of about Rs 100 billion (bn) into power and renewable energy sectors. Emphasis will be on dispatchable renewable solutions that pair generation with storage to address intermittency and deliver peak capacity.
Market observers noted that medium-term power banking between the two utilities could reduce exposure to volatile short-term markets and lower procurement costs over time, while providing clearer signals for capacity additions. The agreement also aims to inform longer term planning for generation and storage infrastructure as the states operationalise bids and allocate contracted capacity.
Published by HT Digital Content Services with permission from Construction World.