Reports Hydropower Devt India Hydropower Devt India

8/2/2019 Reports Hydropower Devt India Hydropower Devt India

1/84

Hydropower

Developmentin IndiaA Sector Assessment


2/84

Hydropower Development n Inda: A Sector Assessmentv


3/84

A Sector Assessment

K. Ramanathan

P. Abeygunawardena

Hydropower

Developmentin India


4/84

Hydropower Development in India: A Sector Assessmentii

2007 Asian Development Bank

All rights reserved. Published 2007.

Printed in the Philippines.

Cataloging-In-Publication Data

Publication Stock No. 031607

Asian Development Bank.

Reference document on hydropower development in India

1. India 2. Hydropower development

The views expressed in this book are those of the authors and do not necessarily reflect the views

and policies of the Asian Development Bank (ADB) or its Board of Governors or the governments

they represent.

ADB does not guarantee the accuracy of the data included in this publication and accepts no re-

sponsibility for any consequence of their use.

Use of the term country does not imply any judgment by the authors or ADB as to the legal or

other status of any territorial entity.


5/84

Contents

Acronyms and Abbrevatons v

Preface v

Executve Summary x

I Introducton 1

II Overvew of Indan Power Sector 3

III Plans for Future Power Development 5

IV Hydropower Development n Inda 8

V Strateges for Accelerated Hydropower Development 12

VI Prvate Sector Partcpaton 17

VII The Small Hydro Segment 20

VIII Energy Securty Issues and Regonal Cooperaton n Hydropower Development 24

IX Conclusons 27

Appendxes 29

A Breakdown of Installed Generaton Capacty n Utltes 29

B Lst of Low Tarff Schemes under 50,000 MW Hydroelectrc Intatves 30

C Requrements for Obtanng Clearances and Approvals 32

D Regulatory and Tarff-related Issues n Hydropower Generaton 40

E Draft Gudelnes for Allocaton of Hydrostes to Prvate Developers 43

F Hydropower Development n Uttaranchal 49

G Hydropower Development n Hmachal Pradesh 55

H Hydropower Development n Skkm 61

I Hydropower Development n North-Eastern Regon 65

References 70


6/84



7/84

v

Acronyms and Abbreviations

CAMPA Compensatory Afforestaton Fund Management and Plannng Authorty

CAT catchment area treatment

CCEA Cabnet Commttee on Economc Affars

CEA Central Electrcty Authorty

CERC Central Electrcty Regulatory Commsson

CPIB Commttee of Publc Investment Board

CPSU central power sector unt

CNG compressed natural gas

CWC Central Water Commsson

DPR detaled project report

EA Electrcty Act 2003

EIA envronmental mpact assessment

EMP envronmental management plan

EPS Electrc Power Survey

FI fnancal nsttuton

GDP gross domestc product

HP Hmachal Pradesh

HPERC Hmachal Pradesh Electrcty Regulatory Commsson

HPSEB Hmachal Pradesh State Electrcty BoardIPP ndependent power producer

JPVL Japrakash Power Venture Lmted

LADA local area development authorty

LNG lquefed natural gas

MNES Mnstry of Non-Conventonal Energy Resources

MOEF Mnstry of Envronment and Forests

MOF Mnstry of Fnance

MOP Mnstry of Power

MORD Mnstry of Rural Development

MOU memorandum of understandng

NEA Nepal Electrcty Authorty

NEEPCO North-Eastern Electrc Power CorporatonNHDC Narmada Hydro Development Corporaton

NHPC Natonal Hydroelectrc Power Corporaton

NTPC Natonal Thermal Power Corporaton

NPV net present value

NPRR 2003 Natonal Polcy on Resettlement and Rehabltaton, 2003

NEP Natonal Electrcty Plan 2005

NER North-Easthern Regon

PAF Project-affected famly

PFC Power Fnance Corporaton


8/84


PIB Publc Investment Board

PFR prefeasblty report

PGCIL Power Grd Corporaton of Inda Lmted

RFP request for proposal

R&R resettlement and rehabltaton

SEB state electrcty board

SHP small hydro project

SEIAA state/unon terrtory envronmental mpact assessment authorty

SEAC state/unon terrtory level expert apprasal commttee

SERC state electrcty regulatory commsson

SJVNL Satluj Jal Vdyut Ngam Lmted

SPCB state polluton control board

SPDCL Skkm Power Development Corporaton Lmted

THDC Tehr Hydro Development Corporaton

TEC techno-economc clearance

THPA Tala Hydro-electrc Project Authorty

TOR terms of referenceUERC Uttaranchal Electrcty Regulatory Commsson

UPCL Uttaranchal Power Corporaton Ltd.

UTPCC Unon Terrtory Polluton Control Board

WEIGHTS and MEASURES

BU (bllon unt) Unt of energy, equal to 1x109

kWh (klowatt-hour) Unt of energy, equal to 1 unt

MW (megawatt) Unt of power, equal to 1x106

GW (ggawatt) Unt of power, equal to 1 bllon (109) watts

MT (metrc ton) Unt of weght, equal to 1,000 kg or 2,204.6 pounds

CONVERSION

Rs1 mllon Equal to Rs1x106

Rs1 bllon Equal to Rs1x109

Rs1 lakh Equal to Rs1x105

Rs1 crore Equal to Rs1x107


9/84

v

Preface

Ths report s ntended to be a reference document for varous partes nvolved n hydropower de-

velopment n Inda. It provdes an assessment of the hydropower development potental n Inda.

Although the report s somewhat techncal n nature, t should be of nterest to the Government,

nongovernment organzatons, and cvl socety n general. The report would serve ts purpose ft helps to renforce publc awareness and concern to make the Indan energy sector more dverse

and sustanable.

Energy securty s a major concern n many of our developng member countres. Inda

s no dfferent to ths. In order to mantan the requred power demand-supply balance and to

meet ts goal of Power For All by 2012, Inda needs to nstall an addtonal 100,000MW power

generatng capacty. Ths s a major challenge and we hope Indas vast hydropower potental can

contrbute to ths n an envronmentally sustanable and socally responsble manner. In ths report,

an assessment has been made to understand the hydropower potental. A sgnfcant contrbuton

from hydropower resources to meet the emergng needs of the power sector seems techncally

feasble and cost-effectve.

The Energy Dvson of South Asa Regonal Department prepared ths report n collaboraton

wth the Energy and Resources Insttute, New Delh, Inda. I wsh to convey my sncere apprecatonto the authors for brngng out ths report at ths juncture.

Kuno Senga

Drector General

South Asa Regonal Department

Asan Development Bank


10/84



11/84

x

Executive Summary

A fast growng power sector s crucal to sustan Indas economc growth. Inda has an assessed

hydropower potental to the tune of 84,000 MW at 60% load factor; out of ths only about 20%

has been developed so far. In the past varous factors such as the dearth of adequately nvest-

gated projects, envronmental concerns, resettlement and rehabltaton ssues, land acqustonproblems, regulatory ssues, long clearance and approval procedures, power evacuaton problems,

the dearth of good contractors, and n some cases, nter-state ssues and law and order problems

have contrbuted to the slow pace of hydropower development. There have been large tme and

cost overruns n case of some projects due to geologcal surprses, resettlement and rehabltaton

ssues, etc. However, consderng the large potental and the ntrnsc characterstcs of hydropower

n promotng the countrys energy securty and flexblty n system operaton, the Government s

keen to accelerate hydropower development.

Most of the above concerns are beng addressed through a number of legslatve and

polcy ntatves at the central and state levels. As dscussed n detal n the report, these nclude

preparaton of a shelf of well-nvestgated projects and streamlnng of statutory clearances and

approvals, establshment of ndependent regulatory commssons, provson for long-term fnancng

for projects, ncreased flexblty n sale of power, etc. In May 2003, the Prme Mnster of Indalaunched a 50,000 megawatt (MW) hydro ntatve. Under ths scheme, detaled project reports

(DPRs) are beng prepared for 73 schemes, whch have an ndcatve frst year tarff below Rs2.50.

Ths would provde a shelf of farly well nvestgated low tarff projects to prospectve developers.

Rsk perceptons n takng up the projects and the possbltes of tme and cost overruns are also

expected to get mnmzed. Of these schemes (total about 32,000 MW), 70 are located n the

Brahmaputra, Indus and Ganga basns n the north and north-eastern part of the country.

The Government has formulated a number of measures to address the ssues related to

watershed management of upstream and downstream. For example, n case of mult-purpose

schemes, Electrcty Act 2003 requres that the state government and the generatng company

coordnate ther actvtes wth those other persons responsble for such scheme nsofar as they are

nter-related. Smlarly, the techno-economc clearance and the Central Electrc Authorty would

look nto the optmal development of the rver or ts trbutares consstent wth other requrements.

The Mnstry of Envronment and Forestry clearance would look nto the envronmental mpacts

and socal/communty development aspects assocated wth the projects and the developers would

be requred to depost adequate funds for compensatory afforestaton, catchment area treatment

plan, wldlfe management plans, bodversty conservaton plans, etc.

Prvate sector partcpaton has been low n the hydropower sector although the sector was

opened up n 1991 snce the nvestors looked at t as a hgher rsk proposton compared to thermal

projects. The Government has ntated a number of polcy measures to address such concerns. They

nclude avalablty of farly well nvestgated DPRs, formulaton of transparent bddng procedures,


12/84

Hydropower Development n Inda: A Sector Assessmentx

provson of open access and tradng, notfcaton of tarff determnaton processes, jont venture

ntatves, etc. The small hydro segment also offers consderable scope for development both for grd

and off-grd applcatons. About 80% of the estmated potental remans untapped. The Mnstry

of Non-conventonal Energy Sources s presently provdng support to the states for assessment of

potental, preparaton of DPRs and project mplementaton.

Inda needs to moblze large fnances for mplementaton of ts power program. Whle the

Government has substantally stepped up ts budgetary allocatons to the hydro sector, support

from nternatonal agences and the prvate sector s also needed. In case of such projects, the

developers however seem to have a percepton that the apprasal processes are often long and ths

n turn could cause delays n takng up the project for mplementaton and consequental tme and

cost overruns. Hence they hold the vew that n case of projects that are n a farly mature state for

takng up for mplementaton, t may be prudent to borrow from the market (especally when such

fundng can be accessed). Nevertheless, the developers consder that workng wth nternatonal

donor agences would provde some rch experence and also mprove ther credt ratng wth other

fnancers.

Inda has been cooperatng wth Bhutan and Nepal n hydropower development for over a

decade. There are prospects of further enhancement for the beneft of all the countres and n thelarger nterest of energy securty n the regon. Some prospects of hydropower cooperaton wth

other neghborng countres are also ndcated.


13/84

1

Introduction

S

purred by sustaned economc growth, rse n ncome levels, and ncreased avalablty of

goods and servces, Indas ncremental energy demand for the next decade s projected

to be among the hghest n the world. Ths ncreasng energy demand also translates nto

hgher demand for electrcty. It has been estmated that n order to support a growth rateof the gross domestc product (GDP) of around 7% per annum, the rate of growth of power supply

needs to be over 10% annually. Ths calls for rapd development of the countrys power sector, tak-

ng nto account, nter ala, consderatons of long-term sustanablty, envronmental aspects and

socal concerns.

Inda s endowed wth rch hydropower potental; t ranks ffth n the world n terms of

usable potental. However, less than 25% has been developed or taken up for development. Thus

hydropower s one of the potental sources for meetng the growng energy needs of the country. A

judcal mx of hydropower n the energy portfolo can also contrbute to energy securty, reducton

of greenhouse gas emssons, meetng the peak demand and also ncreased flexblty n grd

operaton. Besdes, projects may also be conceved as mult-purpose ones contrbutng not only to

power but also to rrgaton, flood control, navgaton, etc. The Government of Inda s, therefore,

gvng specal emphass to accelerated hydropower development n ts power development plans.Moblzaton of adequate fnancal resources s an mportant requrement n ths context.

The Government has, therefore, been seekng support from nternatonal donor agences and

the prvate sector to supplement ts own resources. Ths report has been prepared to facltate

such fundng. It s not ntended to be a crtque of the development ntatves and polces of the

Government. The objectve s to provde a comprehensve assessment of what s happenng n the

hydropower sector n Inda that would be useful whle apprasng future fundng optons by donor

agences. Ths has been prepared based on detaled lterature survey and personal dscussons

wth senor offcers of the Mnstry of Power (MOP), Central Electrcty Authorty (CEA), Mnstry

of Envronment and Forests (MOEF), and a number of publc and prvate sector developers and

consultancy organzatons. The report also annexes an overvew of hydropower development

prospects n the states of Uttarakhand (formerly Uttaranchal), Hmachal Pradesh, Skkm and n

the North-Eastern Regon (NER), where large untapped potental exsts.


14/84

Hydropower Development n Inda: A Sector Assessment2


15/84

3

Overview of Indian Power Sector

T

he nstalled generatng capacty n Inda (n utltes) as of 31 March 2006 was nearly

125,000 megawatts (MW). Ths ncluded thermal (coal, gas and lqud fuel), hydro, nu-

clear, and renewable based generaton. Hydropower consttuted about 32,325 MW. Adetaled energy breakdown of the nstalled capacty n utltes n the fve power regons of

the country on a sector-wse and mode-wse bass s gven n Appendx 1. As may be seen there the

hydro-thermal mx s low wth hydropower consttutng about 26% of the total capacty.1 Nearly

90% of the nstalled capacty s n the publc sector. In the case of hydropower, the publc sector

has a predomnant share of over 97%. Nearly 78% s n the state sector. The annual gross electrcty

generaton was about 617 bllon unts (BU) durng 2005--2006; the share of hydropower n ths

was around 16%.

The energy resources of the country are unevenly dstrbuted wth bulk of the hydro resources

n the northern and north-eastern part, and fossl fuel resources n the central and western parts.

In order to ensure optmal utlzaton of these resources, the power systems of the country were

demarcated nto fve power regons and a regonal concept for power plannng was ntroduced n the

1960s. Ths led to development of regonal power grds and nter-regonal nterconnectons. In the1980s the concept of a natonal grd was adopted and ths led to further strengthenng of the ntra-

regonal and nter-regonal transmsson systems. As a result an extensve network of transmsson and

dstrbuton lnes (over 6 mllon crcut klometers) s presently n operaton and a Natonal Power Grd

s n the process of evoluton. The Indan power system s also nterconnected wth the power systems

of Bhutan and Nepal, facltatng transnatonal power exchanges as per blateral agreements.

The demand for power has been growng at the rate of 5.74% n recent years.2 Durng 2005-

2006 the demand was 632 BU n terms of energy and 93.21 ggawatts (GW) n terms of peak power

requrements. The avalablty of power had been contnually fallng short of the demand and, as a

result, the country s experencng power shortages of varyng degrees n dfferent parts of the country3.

The shortages durng 2005-2006 were 8.4% n energy and 12.3% n peakng power. Per-capta

consumpton of electrcty s relatvely low, of the order of 600 klowatt-hours (kWh). Presently, over

84% of the vllages are electrfed; but only 43.5% of the rural households have access to electrcty.

1A hydro-thermal mx of 60:40 s often consdered deal; but t s not sacrosanct. Nevertheless, a hgher component ofhydropower s preferred from the system operaton pont of vew.

2 TERIEnergyDataDirectoryandYearbook,200405

3Ths may be attrbuted to a host of factors lke shortfalls n targeted capacty addton (only 47.5% of the planned

additionscouldbeachievedduringtheNinthFive-YearPlan19972002),inefficienciesinproductionandusageof

power, prcng dstortons, etc..

The authors wsh to acknowledge the support receved from Mr. Mansh Shrvastava, Ms. Namrata Mukherjee and Ms. NehaMsra of TERI n lterature survey and complaton of data.


16/84


The techncal and commercal performance of the power utltes s a matter of grave concern.

Whle some mprovements have been notced n recent years, there s consderable scope for

mprovement. The thermal plant effcences are of the order of 31.5% and the system losses are

around 32.5%.4 The Government s conscous of the stuaton and has n recent years taken a number

of polcy ntatves and reform measures amed at mprovng the health of the sector. As part of the

reform program, the sector was opened up for prvate sector partcpaton n generaton n 1991.

Durng the md-1990s a more broadbased reform leadng to changes n the structure, ownershp

patterns and regulatory set up was ntated. The Electrcty Act,EA 2003 provdes an approprate legal

and regulatory framework for ths. The reform measures especally focus on creatng an nvestment-

frendly envronment for prvate sector partcpaton, promoton of competton and protecton

of consumer nterests. Some of the key features of the EA are n Box 1. Independent regulatory

commssons have been establshed n most of the States. In case of Mzoram and Manpur, a Jont

Electrcty Commsson (JERC) has been notfed. An Appellate Trbunal has also been consttuted whch

would hear appeals aganst orders of regulatory commssons. Under the provsons of EA 2003, a

Natonal Electrcty Polcy and Tarff Polcy have been notfed. A draft Natonal Electrcty Plan (NEP) was

notfed n 2005; ths s now beng fnalzed based on the revsed nformaton ongeneratng capacty

addton targets. Smlarly, almost all the regulatory commssons have gven tarff orders and a numberof them have notfed open access regulatons. There s also an added focus on renewable energy.

There s consderable scope for mprovement of effcences n the end use sector. Realzng ths,

the Government had legslated an Energy Conservaton Act, whch came nto effect n March 2002.

Ths Act lad down a number of measures to ensure effcent use of energy and ts conservaton lke

establshment of a Bureau of Energy Effcency (BEE), powers to the Central and state governments

to facltate and enforce effcent use of energy and ts conservaton, provson for standards and

labelng of energy-ntensve equpment and applances, mandatory energy audts, etc.

432.5% system losses translate nto 174 BU; approxmately 24 GW at 60% load factor.

Box 1. Key Features of Electricity Act 2003

The Central Government to prepare a Natonal Electrcty Polcy n consultaton wth state

governments. Central Electrcty Authorty to prepare a Natonal Electrcty Plan. Thrust to complete rural electrfcaton; provson for lcense free generaton and dstrbuton n

rural areas.

De-lcensng of generaton (except hydropower projects beyond a certan captal cost and nuclear)and freeng of captve generaton.

Provsons for promotng renewable energy based generaton. Provsons for prvate lcensees n transmsson and entry n dstrbuton through an ndependent

network

Open access n transmsson from the outset; to be ntroduced n phases n dstrbuton. Establshment of state electrcty regulatory commssons made mandatory. Provsons for payment of subsdy through budget. Tradng recognzed as a dstnct actvty lcensed by the approprate regulatory commsson.

Provsons for reorganzaton of state electrcty boards. Meterng of all electrcty suppled made mandatory. An Appellate Trbunal to hear appeals aganst decsons of the state electrcty regulatory

commssons.

Provsons relatng to theft of electrcty made more strngent. Provsons for safeguardng consumer nterest. Ombudsman scheme for redressal consumer

grevance.


17/84

5

I

nda s pursung a centralzed system for power plannng. EA 2003 requres CEA to prepare a

NEP n accordance wth the Natonal Electrcty Polcy notfed by the Government and update

t once every 5 years. The plan s to be fnalzed takng nto account suggestons and objec-

tons from lcensees, generatng companes and the publc. The plan s to be notfed onlyafter gettng the approval of the Government. CEA has also to formulate a perspectve trans-

msson plan for nter-state and ntra-state transmsson systems. These plans would be contnuously

updated to take care of the revsons n load projectons and generaton scenaros. Further detaled

plannng by the Central and state transmsson utltes has to conform to ths plan.

A draft NEP was notfed n 2005 whch was based on an all-Inda generaton capacty

additionofaround40,000MWduring20022007andthedemandprojectionsshowninTable1.

Table 1: Long-Term Forecasts of Electricity: All India (Public Utilities)

Energy Requirement (MW) Peak Load (MW)

Region 2011-2012 2016-2017 2011-2012 2016-2017

Northern Regon 308,528 429,480 49,674 69,178Western Regon 299,075 395,859 46,825 61,966Southern Regon 262,718 354,599 42,061 56,883Eastern Regon 90,396 117,248 15,664 20,416North-Eastern Regon 14,061 20,756 2,789 4,134A&N Islands 374 591 77 122Lakshadweep 44 111 17 26

All India 975,222 1,318,644 157,107 212,725

Source: 16th Electrc Power Survey, report released January 2001.

The plan covered two scenaros of GDP growth rate; namely, 6.5% and 7.4% for workng out

generaton capacty addtons. Besdes the lkely mpact of varous factors such as lmted ndgenous

coal avalablty367 metrc tons (MT) as compared to 419 MT n the base caseenergy conservaton

(about 6.9%), peak reducton (5%), nter-regonal dversty n demand (3.5%), accelerated rural

electrfcaton, and household modernzaton, spnnng reserve requrement (5%), etc. and low

hydro scenaro (benefts of 5,000 MW of hydropower slppng from the 11th Plan to the 12th Plan)

have also been studed. A summary of the results s shown n Table 2.

Plans for Future Power Development


18/84


Scenario Peak Demand Installed Capacity AdditionCapacity 11th Plan

Scenario I

Base case 157,107 204,234 60,896Lmted coal (Indgenous) 157,107 203,668 60,330Energy conservaton 146,243 190,343 47,005Demand management 149,252 194,455 51,117Dversty 150,721 196,575 53,237Rural electrfcaton 167,507 216,598 73,260Low hydro development 157,107 204,386 61,048Household modernzaton 163,723 212,523 69,185Spnnng reserve (5%) 157,107 212,056 68,718Desrable plan* 155,520 202,453 59,115Scenario IIHgh GDP growth 181,941 235,168 91,830Desrable plan (Hgh GDPgrowth) 174,100 223,648 80,310

* Consders effect of ncreased demand on account of accelerated rural electrfcaton program and householdmodernzaton along wth demand reductons due to nter-regonal dversty and energy conservaton/effcencymprovement.

Source: Draft Natonal Electrcty Plan, 2005.

Table 2: Generation Capacity Requirement in 11th Plan

The base case studes ndcated that relablty ndces n terms of Loss of Load Probablty

(LOLP) would be 1.07% by end of the 11th Plan and 0.94% by end of the 12th Plan. The Energy Not

Served ndex worked out to 0.0342% and 0.0294%, respectvely, durng ths perod. The hydropower

capacty addton targets as per ths plan are 22,420 MW durng the 11th Plan and 34,500 MW

durng the 12th Plan. The draft NEP s beng revsed takng nto account the latest projectons of

capacty addtons durng 2002-2007.5 Dscussons wth CEA also ndcate that, based on current

status, the feasble addton n hydropower capacty may be only 17,000 MW n the 11th Plan and

20,000 MW n the 12th Plan.

As regards the fuel mx, coal s lkely to be the manstay n the near future wth focus on

clean coal technologes. However, Indas coal reserves are lmted. Further, nvestments n the coal

sector have to rely on government budgetng. In the past the Government has not made adequate

budgetary allocatons for development of coal mnes, and as a result demand has outstrpped

supply.6 There are also problems of hgh ash content, processng and washng of coal, regulatory

ssues regardng transportaton of coal and envronmental ssues, etc. As regards the opton of

natural gas, the supples are very lmted and there s a concern of prce volatlty. In case of lquefed

natural gas (LNG), t has to be totally mported and the prce beng lnked to the global prce of crude

ol, there wll be a huge prce rsk n mportng LNG. There s a renewed focus on nuclear power;

however, very large capacty addtons are not lkely n the near future.7 Also there are concerns of

avalablty of uranum and costs related to ts mnng. In recent years the Government has been

gvng specal emphass to promoton of renewable sources of energy, but the contrbuton fromthese would be lmted consderng the large power requrements of the country.

5The revsed verson of the document s stll not n the publc doman.

6Currently, the Government s plannng to mport about 40 mllon tons of coal.

7As per Government targets the nuclear capacty s lkely to be 20,000 MW by 2020.


19/84

77Plans for Future Power Development

Under these crcumstances power planners are gvng specal attenton to accelerated

development of hydropower as an mportant energy resource for ensurng the countrys energy

securty. As s well known, hydropower has several advantages over other forms of energy sources.

It s totally renewable and non-pollutng and can also provde a more stable prceregme over a long perod of tme.

It has nherent capablty for quck startng, stoppng, load varatons, etc. and sthus deally suted for meetng the peakng demand.

Generaton cost s not only nflaton free but t also reduces wth tme. Development of hydropower projects s also n many cases assocated wth

rrgaton, drnkng water, flood control, navgaton and toursm benefts.

Pumped storage plants can effectvely regulate the energy avalablty durng the

day by pumpng up water nto the reservor durng off-peak hours when there

s surplus energy n the grd and generatng power from ths stored water when

needed durng peak hours. They can also quckly reverse ther mode of operaton

from pumpng to generatng and vce versa. Thus pumped storage plants can playan mportant role n meetng the peak demand and also n mprovng the grd

stablty and load factor of thermal power statons.

Small hydro plants have least envronmental mpacts and would be deally sutedfor rural electrfcaton partcularly n remote areas. Ths assumes specal mportance

n the context of achevng the target of 100% vllage electrfcaton by 2007 and

power for all by 2012.

Recently the Energy Coordnaton Commttee (ECC), headed by the Prme Mnster of Inda,

approved establshment of fve ultra-mega projects each of 4,000 MW capacty.8 The ECC has also

decded to set up a panel under the cabnet secretary to look nto ssues concernng hydropower

plants for expedtng approvals.

Specal emphass s also beng gven to plan and mplement a transmsson system matchng

wth the addtons to the generaton capacty. In case of hydropower projects ths assumes added

mportance n vew of the fact that these are generally located far away from the load centers

and the terran often presents serous rght-of-way problems. Ths calls for poolng of power from

dfferent projects, development of hgh capacty transmsson corrdors, staged development of

the transmsson system, use of new technologes, etc. The CEA s lookng nto these aspects whle

developng perspectve transmsson plans.9 Ths has specal relevance n case of hydropower

development n Hmachal Pradesh (HP), Skkm, Uttaranchal and NER, where the local demands are

low compared to the avalable power potental. The ground rules for connecton of the generators

to the transmsson system and for plannng and operaton of the nterconnected power systems

8These would be coal-based ndependent power producers, located at pt heads and on the coast. Tentatve allocaton ofpower from four of these projects has already been done. MOP has also n the meantme frmed up the paymentsecurty mechansm for the projects (whch, t s proposed, wll consst of an rrevocable letter of credt and rrevocablearrangement of escrow account havng clams on recevables). In the event of a default, the developers wll have therght to sell power to any other dstrbuton companes or hgh-tenson consumers.

9A draft perspectve transmsson plan was notfed n July 2005.


20/84


Hydropower Development

in India

Resource Potential

Inda s endowed wth rch hydropower potental; t ranks ffth n the world n terms of usable

potental. Ths s dstrbuted across sx major rver systems (49 basns), namely, the Indus,

Brahmaputra, Ganga, the central Indan rver systems, and the east and west flowng rver

systems of south Inda. The Indus, Brahmaputra and Ganga together account for nearly 80%

of the total potental. In the case of Indus the utlzaton s, however, governed by the Indus Wa-

ter Treaty wth Pakstan. The economcally explotable potental from these rver systems through

medum and major schemes has been assessed at 84,044 MW at 60% load factor10 correspondng

to an nstalled capacty of around 150,000 MW. As mentoned earler, so far only 32,325 MW has

been establshed. Tables 3 and 4 show the status of development of hydropower on a regon-wse

and basn-wse bass. In addton, pumped storage stes wth an aggregate capacty to the tune of

94,000 MW have also been dentfed, but only about 5,000 MW have so far been developed. Theassessment of small hydro (up to 25 MW) potental has ndcated nearly 10,000 MW dstrbuted over

4,000 stes. It s estmated there s stll an undentfed small hydro potental of almost 5,000 MW.

10 Thisisbasedonthe reassessment(thefirstassessmentwascarriedoutduring19531959)ofhydropowerresources

carred out by CEA n 1980s takng nto account new nformaton avalable on topographcal features and hydrology ofthe rver systems, technologcal advances and experence ganed n cvl works of hydropower projects, and the latesttrends n relatve economcs of power generaton from dfferent sources. The assessment of energy s based on avalabltyof water correspondng to a 90% dependable year and the stng of power statons based on topographcal studes.

Region Potential Potential Potential under Balance BalanceAssessed Developed Development Potential Potential

(MW) (MW) (MW) (MW) (%)

Northern 30,155 5,150 2,905 22,100 73.28Western 5,679 2,270 1,164 22,450 39.53Southern 10,763 5,924 153 4,686 43.54

Eastern 5,590 1,364 201 4,025 72.00North-Eastern 31,857 517 914 30,424 95.5Total 84,044 15,225 5,339 69,480 75.53

Source: Indan Natonal HydroPower Assocaton. 2005.

Table 3: Region-Wise Potential and its Status of Development at

60% Load Factor as on 1 January 2005


21/84

99Hydropower Development n Inda

Basin Potential Potential Potential under Balance Balance(MW) Developed Development Potential Potential

(MW) (MW) (MW) (%)Indus Basn 19,988 3,731 1,156 14,701 73.55Ganga Basn 10,715 1,901 1,367 7,447 69.5Central Indan Rvers 2,740 1,060 1,147 533 19.45West Flowng Rvers 6,149 3,704 41 2,404 39.09East Flowng Rvers 9,532 4,168 144 5,220 54.76Brahmaputra Basn 34,920 661 1,085 33,175 95Total 84,044 15,225 5,339 63,480 75.53

Source: Indan Natonal HydroPower Assocaton.

Table 4: Basin-Wise Potential and its Status of Development at

60% Load Factor as of 1 January 2005

Hydropower development commenced over a century ago n Inda wth the nstallaton of a

130 kW power staton n the Darjeelng dstrct of West Bengal, almost n pace wth the worlds frst

hydro-electrc staton n the Unted States. However, to date only about 20% of the countrys vasthydro potental has been harnessed. The share of hydropower n the total nstalled capacty has also

decreased over the years; from over 50% n 1960-61 to nearly 26% now (Fg 1).

Fig. 1 Growth of Installed hydropower capacity

0

20000

40000

60000

80000

100000

120000

140000

31.12.50

31.03.56

31.03.

61

31.03.

66

31.03.

69

31.03.74

31.03.79

31.03.

80

31.03.

85

31.03.

90

31.03.

92

31.03.

97

31.03.20

02

31.03.20

03

31.03.20

04

31.03.20

05

Year

InstalledCapacity(MW)

0

10

20

30

40

50

60

70

80

90

100

Percent

Total installed capacity Hydro capacity Share of hydro (%)

Barriers in Development

The man barrers/concerns that have come n the way of development of hydropower projects are

brefly dscussed below.

Longer gestation period and capital intensive nature of the projects: Preparaton of

detaled projects reports (DPRs) for hydropower projects takes relatvely longer perod than for

thermal projects because relable hydrologcal, geologcal, sesmologcal and envronmental

studes have to be carred out for a longer perod. Thus hydropower projects generally ental a

long gestaton perod. In addton to ths, these projects are comparatvely captal ntensve. In

the context of resource shortages and contnung power shortages, thermal projects (coal, lqud

fuel and gas), whch need a relatvely short gestaton perod, have been gettng prorty n fund

allotments.


22/84


Dearth of good contractors: A matter of concern n the executon of large projects s the

dearth of competent and resourceful contractors, as t often results n tme and cost overruns of

hydro projects.

Inter-state aspects: A large number of hydropower projects havng common rver systems

between adjonng states are held up on account of nter-state aspects. Some of these projects

have receved the techno-economc clearance (TEC) of CEA but the nvestment sancton could not

be accorded due to nter-state aspects. A number of projects have also not been accorded CEA

clearance on account of nter-state ssues.

Environmental impact and rehabilitation issues: Important envronmental concerns

n hydro-electrc projects are: (a) rehabltaton of project-affected people; (b) deforestaton; (c)

lkely submergence of archaeologcal, relgous and hstorcal monuments; (d) protecton of flora,

fauna, forests, and wldlfe; (e) degradaton of catchment area; and (f) dsaster potental n the

event of earthquakes, reservor nduced sesmcty, surplusng of reservors, etc. Rehabltaton of

project-affected people s also a major ssue n mplementaton, especally n case of storage-based

hydro development. It s essentally a human problem and has to be dealt wth understandng

and senstvty. In fact, many tmes t s one of the man reasons for the delay n the executon11

of projects. Sardar Sarovar, Indra Sagar, Bansagar Tons and Tehr are some of the hydro projectswhere the progress had been severely hampered n the past from sustaned opposton to project

constructon by envronment actvsts and project-affected people.

Valuation of forestland based on net present value: The manner of valuaton of forest

landdverted for non-forestry purposes based on the net present value (NPV) of dverted land has

been a matter of concern for developers of hydropower projects. As per the recommendatons of a

Centrally Empowered Commttee (CEC), the NPV of forestland dverted for non-forest use has been

chargedatRs5.809.20lakhsperhectare,dependinguponthedensityofforestinvolved.Under

NPV, the state government has to pay to the CEC the NPV of forestland lost to mnng and other

projects, ncludng resettlement. State governments, n turn, have asked for exempton n case of

projects such as government hosptals, schools, and ranwater harvestng meant for publc welfare.

In some cases, t s argued that loadng of NPV on the project may result n ncrease n tarff of

hydro-electrcty.11 There s thus an urgent need to ratonalze NPV calculatons of forestland n caseof hydroelectrc projects. The matter had also come up before the Supreme Court of Inda, whch

has drected the formaton of a commttee to look nto varous ssues pertanng to assessment of

NPV. The Energy and Resources Insttute s also undertakng a study to analyze varous aspects of

NPV calculaton for hydroelectrc projects n Inda.

Law and order problems: Dsturbed law and order s one of the factors causng delay n

project executon and even suspenson of work. Some of the hydropower projects affected due to

these problems are Dulhast, Upper Sndh, Doyang and Dhansr.

Land acquisition problems: The problems arsng n acquston of land for hydropower

project are causng suspenson and delay n the constructon actvtes. Then Dam, Doyang, Ghatgar

pumped storage plants are some of the projects affected n the past due to ths problem.

Geological surprises: The features of the hydropower projects beng ste specfc, depend

on the geology, topography and hydrology at the ste. The constructon tme of a hydro project sgreatly nfluenced by the geology of the area and ts accessblty. Even when extensve nvestgaton

usng new technques of nvestgatons are undertaken, an element of uncertanty remans n the

sub-surface geology and the geologcal surprses durng actual constructon cannot be ruled out.

Ths n turn adds to the constructon rsks.

11Appendx 3 elaborates ssues related to clearances n ths regard.

12As per some reports, payment of NPV as per prevalng norms s lkely to result n 20% ncrease n project cost (by nearlyRs1,000 crores) as n the case of the proposed Tapamukh project n NER.


23/84

1111Hydropower Development n Inda

Power evacuation: A number of the hydropower projects are located n remote stes and the

home states do not have adequate demand. Tmely provson of power evacuaton system presents

many complextes n such cases, snce (a) the benefcares are to be dentfed well n advance, and

(b) where there are serous rght-of-way constrants, excess capacty would have to be bult n one

go consderng lkely future development of projects n the evacuaton corrdor. Ths could result

n hgh transmsson tarffs ntally and also adversely affect sustanablty of the project n case of

slppages n projects. These ssues are especally relevant n case of projects n NER.

Lack of private sector interest: The prvate sector has also not been evncng much nterest n

takng up hydro projects n vew of non-avalablty of adequately nvestgated projects, constructon

rsks, etc.

Tariff and regulatory issues: The exstng tarff formulaton norms for hydro projects (based

on a cost plus approach) wth no premum for peakng servces and the provson for 12% free

power13 to dstressed states from the ntal years are also provng to be deterrents.

Small hydro segment: Development of small hydro often suffered due to naccessblty of

the stes, lack of power evacuaton nfrastructure, nvestgaton and constructon dffcultes, land

acquston and fnancng dffcultes, nadequaces n nsttutonal support and n some cases law

and order problems.

The Way Forward

The power planners n Inda are concerned about ths slow development of hydropower, especally

n vew of ts several advantages over other forms of energy sources ncludng ts role n promotng

the countrys energy securty, as dscussed n Secton III.

Hydropower Technologies

Inda has acheved a farly hgh degree of self-relance n hydropower technology. Nevertheless,

there s a contnung thrust toward adopton of new technologes. The focus on the cvl engneer-

ng sde s on usng technques and tools that could mprove qualty of plannng and nvestgatonand reduce constructon delays, and to adopt measures that wll help contan sltng problems. On

the electrcal and mechancal sde, the focus has been to mprove the lfe and performance of tur-

bnes (through metallurgcal mprovements, desgn and coatngs of blades, etc.) and to mnmze

problems n transportaton of equpment to project ste and n nstallaton due to space constrants

wthn the powerhouse (through use of splt transformers, gas nsulated substatons, etc.). The

country s also tryng to use new technologes lke powerformers, adjustable speed turbnes, etc.

Another technologcal advance n recent years has been the wdespread use of nformaton technol-

ogy n new projects for constructon montorng actvtes as well as for operaton and control after

project commssonng.

13As per the decson taken by the Central Government n 1990, 12% of power from the energy generated by the powerstaton would be suppled free of cost to those states of the regon (ncludng the state where the project s located)where dstress s caused by settng up the project at the specfc ste, lke submergence, dslocaton of populatons,etc. The Government of HP s seekng 12% of the delverable energy of the project for the perod startng from the dateof synchronzaton of the frst generatng unt and extendng up to 12 years from the date of commercal operatonof the project, at 18% of delverable energy of the project for a perod of the next 18 years and thereafter at 30% of thedelverable energy for the balance of the agreement perod beyond 30 years.


24/84


Strategies for Accelerated

Hydropower Development

The Government has taken a number of ntatves n recent years to mprove the functonng of

the power sector and attract nvestments. There has also been a specal emphass on accelerated

hydropower development. These are brefly dscussed below.

Policy Liberalization

As mentoned earler the power sector was opened up for prvate sector partcpaton n generaton

n 1991 wth a vew to brng n addtonal resources for capacty addton ncludng n hydropower.

Prvate sector entrepreneurs were allowed to set up enterprses, ether as lcensees, or as generatng

companes. The generated power was to be sold to state electrcty boards (SEBs) on the bass of a

power purchase agreement. Further, a debt equty rato of up to 4:1 was made permssble for all

prospectve prvate enterprse entrants (.e., for both lcensees and generatng companes). In orderto ensure that the nvestor brngs n addtonalty of resources to the sector, t was also stpulated

that not less than 60% of the total outlay for the project has to come from sources other than In-

dan publc fnancal nsttutons (FIs).

Subsequently, n March 1992 a tarff notfcaton was ssued ncorporatng several ncentves

to prvate developers whch broadly covered ncentves for better avalablty of machnes, for

generaton of extra energy above the desgn energy, compensaton for hydrologcal rsks, etc. Later,

up to 100% foregn equty partcpaton was also permtted.

Policy on Hydropower Development (1998)

The above lberalzaton measures dd not provde expected mpetus to hydropower development;

t also dd not generate much nterest n prvate sector partcpaton n hydropower development.Based on a revew of the stuaton, the Government brought out a polcy on hydropower develop-

ment n 1998, whch, nter ala, lad down several polcy nstruments lke full budgetary support

to ongong projects, establshment of a power development fund, a mechansm to resolve nter-

state ssues, favorable tarff formulaton, etc. The polcy also outlned that the selecton process of

prvate developers would be such that for projects up to 100 MW n capacty, the memorandum

of understandng (MOU) route would be adopted, whereas for projects above 100 MW capacty,

a compettve bddng process would be adopted. Although all these polcy measures could not be

effectvely mplemented, the Government has been pushng ahead wth strategc ntatves from

tme to tme.


25/84

1313Strateges for Accelerated Hydropower Development

Ranking of Potential Hydro Sites

A need was also felt n the meantme to evolve a comprehensve approach for the phased develop-

ment of the large untapped potental. Wth ths n vew, CEA prepared a vson document n 2001

gvng a road map for expedtng hydropower development n the country. Ths document ndcated

that n order to harness the entre remanng assessed hydropower potental of the country by

20252026, about Rs5,000 bllon would be requred for project mplementaton based on present

day costs and another Rs50 bllon would be requred for survey and nvestgatons, whch would

need to be completed by 20162017.14

As a follow-up of the recommendatons contaned n the vson document, CEA carred out

prelmnary rankng studes of about 400 schemes n the sx rver basns of the country. Schemes

totalng to about 107,000 MW have been ranked nto fve categores as A, B, C, D and E from the

pont of vew of attractveness (n decreasng order) for mplementaton. The aspects consdered

are resettlement and rehabltaton (R&R) ssues, nter-state/nternatonal aspects, potental of the

scheme, type and heght of dam, length of tunnel/channel, accessblty of ste, present status of

the project and the status of upstream or downstream developments. The prelmnary rankng study

report released n February 2002 was expected to provde nformaton to developers on the relatversks and attractveness of dfferent potental stes and also to take up more detaled nvestgatons

ncludng preparaton of feasblty reports.

Prime Ministers 50,000 MW Hydroelectric Initiative

In order to gve further fllp for development of hydro sector, the Prme Mnster of Inda announced

a 50,000 MW hydro ntatve n May 2003. Under ths program prefeasblty reports (PFRs) of 162

new projects wth an aggregate capacty of 47,930 MW dstrbuted across 16 states have been pre-

pared. Out of these 162 schemes, 73 schemes havng frst year ndcatve tarff below Rs2.50 have

been selected for preparaton of detaled project reports (DPRs) and subsequent mplementaton.15

The nstalled capacty of these schemes s about 33,000 MW. Of these schemes (32,000 MW), 70

are located n Brahmaputra, Indus and Ganga basns n the north and north-eastern part of thecountry. A lst of these schemes s gven n Appendx 2.

Studes done so far ndcate prospects of many projects delverng power at a cost of

Rs1.502.50perunit.Itisexpectedthattheavailabilityofashelfofwell-investigatedDPRswould

help to mnmze the gestaton perod, frm up the costs and also enlven the nterest of the prvate

sector n takng up hydro projects.

Streamlining of Clearance Procedures

Recognzng the fact that sanctonng of projects s tself a process that requres streamlnng, the

MOP, Mnstry of Fnance (MOF), MOEF and the Plannng Commsson are workng to mnmze the

tme cycle for sanctons by reengneerng processes. Specal emphass s beng gven to expedtng

envronmental clearances, as detaled n Attachment A to Appendx 3. Further, the Natonal Polcyon Resettlement and Rehabltaton for Project-Affected Famles, 2003 (NPRR, 2003) notfed by the

Mnstry of Rural Development (MORD) s expected to provde a better apprecaton of the ssues as

well as the oblgatons and rsks on the part of developers.

A TEC from CEA s now requred only n cases where nter-state water ssues are nvolved or

the captal cost of the project exceeds Rs25 bllon as mentoned n Appendx 3. CEA has also evolved

14CEA. 2001. Prelmnary Rankng Study of Hydro-electrc Schemes.

15The cost of preparaton of DPRs s proposed to be recovered later from the developers.


26/84


modalitiesforsimplifiedtransferofTECsfromoneagencytoanother.Duringtheperiod19992004

TECs were transferred n favor of new executve agences n eght hydropower projects16.

As mentoned earler, the ECC, headed by the Prme Mnster of Inda, has also decded to

set up a panel under the cabnet secretary to look nto ssues concernng hydropower plants for

expedtng approvals.

In case of projects to be executed by the central power sector unts (CPSUs), the Government

has approved a three-stage clearance procedure n consultaton wth MOF and MOEF. The salent

features of ths procedure are gven n Box 2. The frst and second stage clearance system has helped

to cut down constructon tme by at least 2 years and consequently, the project cycle tme for a

typcal project has been reduced from over 7 years to around 5 years17.

16Report of the Standng Commttee on Energy, August 2005.

17Intervew wth Mr. R. V. Shan, Powerlne, January 2006.

Box 2. 3-Stage Clearance Process for Central Sector Projects

Stage I: Under Stage I, the central power sector unts (CPSUs) wll ncur expendture on survey,

nvestgatons and preparaton of a prefeasblty report for hydro projects and expendture up to Rs100

mllon wll be sanctoned by Mnstry of Power subject to the condton that the proposed hydro projects ncluded n the 5-year plan or long-term Hydro Electrc Power Development Plan. For an expendture

of more than Rs100 mllon, the same would be consdered by a commttee of the Publc Investment

Board (PIB). The actvtes under Stage 1 shall be completed wthn 1 year

from the date of sancton.

Stage II: Under ths stage, the CPSUs wll undertake actvtes relatng to detaled nvestgatons and

preparaton of detaled project reports (DPRs). Proposals costng Rs200 mllon and more wll requre

the approval of Fnance Mnster, whle those nvolvng a cost of over Rs500 mllon would requre

approval of the Cabnet Commttee on Economc Affars (CCEA). Projects whch have been found to

be commercally vable and have obtaned ste clearance from the Mnstry of Envronment and Forests

(MOEF) would be consdered for Stage II. Stage II development would nvolve preparaton of a DPR,

pre-constructon works, development of nfrastructure facltes and land acquston, etc. Actvtes

under Stage II shall normally be completed wthn 1.5 years from the date of sancton.

Stage III: Ths stage would requre approval of PIB/CCEA for nvestment decson n respect of constructon

of the project .Approval of PIB /CCEA would be sought after the Envronment & Forest clearance s

obtaned from MOEF and the techno-economc clearance from the Central Electrcty Authorty.

Electricity Act, 2003

Ths Act s expected to provde a new momentum for the overall development of the power sector

n Inda, ncludng for hydropower development. The provsons pertanng to tradng, open access,stand-alone systems, exempton of a power generatng company to obtan a lcense, mandatory

share for renewables and the development of the natonal power grd are of specal relevance n

ths context.


27/84

1515Strateges for Accelerated Hydropower Development

In 2005 MOP ssued gudelnes for determnng the tarff by the bddng process. These

envsage that the purchaser of power shall procure the ste, get all the requste clearances, and

then bd for developng the project at the lowest cost of developed power on the bass of tarff.

The gudelnes for procurement of power are gven separately for base load and for peak load

requrements, whch should facltate settng up of peakng power plants.

Institutional and Budgetary Support

Consderng that the publc sector has played a major and almost exclusve role n developng hy-

dropower, the world over ncludng the developed countres and the fact that hydro n the prvately

owned ndependent power producer (IPP) mode has stll to catch on, the Government proposes

to pursue a judcous mx of both publc and prvate sector optons for ensurng accelerated hydro

development. The efforts beng made n pursung the prvate sector opton are covered n detal n

Secton VI. The am s to generate confdence n the prospectve entrepreneurs/developers and offer

terms and condtons, whch wll be attractve and cover undue rsks wthout jeopardzng consumer

nterests.

The Government has also taken a pragmatc vew that n the mmedate future the publcsector would have to play a domnant role n developng hydropower. Accordngly, a gross budgetary

support of nearly Rs175 bllon has been allocated to hydropower development, out of the total

allocaton of Rs250 bllon for the power sector for the 10thPlan(20022007).Thisalsoamounts

to a substantal ncrease compared to the allocaton made n the 9thPlan(19972002),whichwas

to the tune of Rs92 bllon.

A number of hydropower corporatons have also been establshed n the central sector

and n the jont sector (Central and State). These nclude the NHPC, North-Eastern Electrc Power

Corporaton (NEEPCO), Nathpa-Jhakr Power Corporaton (NJPC) now Satluj Jal Vdyut Ngam Lmted

(SJVNL) and Tehr Hdyro Development Corporaton (THDC). Besdes, the Natonal Thermal Power

Corporaton (NTPC) has been authorzed to take up hydro projects. Narmada Hydro Development

Corporaton (NHDC), a jont venture of the Natonal Hydroelectrc Power Corporaton (NHPC) and

the Government of Madhya Pradesh, has been consttuted to mplement Indra Sagar (1,000 MW)and Omkareshwar (560 MW) projects.

For executon of the projects as per schedule, a stronger montorng mechansm for

constructon/executon of the hydro projects has been put n place by MOP/CEA to realze the target

set for the 10th Plan. CEA nodal offcers regularly vst project stes so as to dentfy problem areas

and also gve regular feedback on the progress made and correctve steps to be taken to streamlne

the executon of the projects.

Efforts are also beng made to facltate long-term fnancng of loans. For example, the Power

Fnance Corporaton (PFC) s now gvng loans wth a maxmum repayment perod of 20 years wth

a moratorum of 6 months after commssonng of projects.18 Interest durng constructon s also

elgble for fnancng. There s a provson for refnancng after commssonng of the project. As per

prevals norms, 80% of the project cost can be debt fnanced for central sector projects and tate

sector projects n those states where reforms have been undertaken. For other states and IPPs upto 70% of the project cost can be fnanced. Key consderatons of PFC for fnancng hydropower

projects are projected tarff, qualty of DPR, purchasers fnancal health, power purchase agreement

and payment securty mechansm.

Project developers can also play a pro-actve role n mnmzng these barrers. A good

communcaton strategy wth the publc and especally the project-affected people s also mportant.

18Dscussons wth PFC.


28/84


A recent publcaton of the Indan Natonal Hydropower Assocaton (INHA) has chroncled some of

the ntatves taken by NHPC n some of ther projects.19 These nclude ethnographc studes before

formulatng R&R plans, drect communcaton wth people, provson of schools, health care centers,

plantng of trees, adopton of bologcal, engneerng and bo-engneerng measures to check sol

eroson, etc. It also provdes examples of how adverse mpact or damage to any monument or

structure were avoded through proper plannng and desgn.

Recognzng the concern of the developers of the mpact of the free power provson on

tarffs, MOP had mooted a proposal to stagger the 12% free power keepng t low n the ntal years

and rasng t gradually to 12% n order to keep the ntal tarff vable (back-endng of tarff) durng

the loan repayment perod. The matter s taken up wth the state governments on a case-to-case

bass. The Government of Jammu and Kashmr has agreed to forego ts share of 12% free power,

from the Baglhar Hydroelectrc Project and the Government of Madhya Pradesh has also agreed to

forego ts free power share n the Omkareshwar Project.

The strateges beng adopted n Uttaranchal, Hmachal Pradesh, Skkm and NER are gven n

Appendxes 69.

19Reckonng the realty INHA, February 2005.


29/84

17

Private Sector Participation

Progress So Far

As mentoned earler, the hydropower sector was opened up for prvate sector partc-paton n 1991. However, so far only about 910 MW has been commssoned, whch

consttutes less than 3% of the total nstalled hydropower capacty. The man developers

were Malana Power Company (Malana 86 MW), Japrakash Industres Lmted (Baspa

II 300 MW), and S. Kumar Group (Maheshwar 400 MW). The Malana project, Indas frst IPP,

s often haled as a success story. It was completed n a record tme of 30 months at a cost of

Rs350 crores. The project started operaton wth a 10-year power purchase agreement wth the

Rajasthan Spnnng & Weavng Mlls. The company was requred to provde 12% free power to H-

machal Pradesh and also pay wheelng charges to Hmachal Pradesh, Rajasthan and to the Power

Grd Corporaton of Inda Lmted (PGCIL), whose transmsson systems were used for the power

transfer. Presently t s supplyng power to Haryana, avalng of the tradng faclty.

Barriers in Private Participation

Development of hydropower projects had been mpeded n the past due to a varety of reasons lke

(a) long gestaton perod; (b) captal ntensve nature of projects; (c) requrements of statutory clear-

ances; (d) geologcal surprses often encountered; (e) land acquston problems; (f) law and order

problems n some cases; (g) R&R problems; etc., as detaled n Secton IV. In overall terms, ths pre-

sented a hgher level of rsk, whch the prvate sector s generally averse n takng. Ths often meant

tme and cost overruns of projects. Non-avalablty of long-term debt fnancng, credtworthness of

the utltes to whom they have to sell the power,20 provson of free power, and front-ended tarffs

were also factors adversely mpactng the foray of the prvate sector nto hydropower development.

The reluctance of FIs to fund hydropower projects n the prvate sector s also a man factor

responsble for the slow development of hydro projects. Ths can be traced to the hgh levels of

constructon rsks that hydropower projects often encounter besdes general problems of IPPs lkepayment securty, etc. The FIs had therefore, been seekng addtonal comforts lke government

guarantees, escrow accounts, etc. However, encouraged by the varous provsons of the Electrcty Act

2003 such as open access, recognton of power tradng and settng up of regulatory commssons,

the FIs are no longer lookng for government guarantees and have reterated that there would be

no dearth of funds for good projects wth vable tarffs promoted by credble developers.21

20The lenders also look forward long-term power purchase agreements.

21MOP. 2005. Draft Gudelnes for Development of Hydro Electrc Project-Stes by Prvate Developers.


30/84


Review by the Standing Committee on Energy

The parlamentary commttee on energy n ts revew of the hydropower sector had also noted wth

concern the poor contrbuton of the prvate sector. The commttee has observed the need to gen-

erate confdence n prospectve developers and offer terms and condtons whch wll be attractve

and cover undue rsks wthout jeopardzng consumer nterests.22 The commttee has also recom-

mended that the Government should frame gudelnes for development of hydropower projects on

the lnes prevalent n the Unted States, where development rghts are decded mostly on the bass

of qualfcatons and credblty of the developer. The objectve s to encourage only those havng

experence n hydropower development and an mpeccable track record.

The commttee has also concluded that due to long gestaton perod and the many

uncertantes nvolved, hydropower projects, especally the larger ones, may not fnd favor wth

the lenders. Accordngly, t has recommended that mult-purpose projects, those nvolvng nter-

state ssues and cooperaton wth neghborng countres, pumped storage schemes, and projects

n the NER may be contnued n the publc sector. The followng types of projects, accordng to the

commttee, may be posed for prvate sector partcpaton:

Extenson projects where dam and major structures have already been constructed

and the new works proposed cover manly powerhouse buldngs and nstallaton

of generatng equpment;

Projects at the toe of exstng dams; and

Run-of-rver schemes nvolvng mnmum underground works.

Government Initiatives

As mentoned earler, the Government has taken a number of measures n recent years to accelerate

hydropower development (of specal relevance to prvate developers are the preparaton of a shelf

of well nvestgated projects, whch could substantally reduce rsk perceptons), streamlnng of the

clearance procedures, the provsons of open access and tradng as per Electrcty Act 2003, etc. Ef-forts are also beng made to make long-term debt avalable. As mentoned n Secton V, PFC s now

gvng loans to prvate sector hydropower projects for up to 70% of the project cost wth a max-

mum repayment perod of 20 years wth a moratorum for constructon perod plus 6 months.23

In January 2004, MOP consttuted an nter-nsttutonal group (IIG) of FIs wth an objectve to

expedte the fnancal closure of prvate sector power generaton projects and to address last-mnute

ssues mpedng project development and fnancng. The members of IIG are the State Bank of Inda

(SBI), Industral Credt and Investment Corporaton of Inda Lmted (ICICI), Industral Development

Bank of Inda (IDBI), Lfe Insurance Corporaton (LIC), PFC and Infrastructure Development Fnance

Company (IDFC). Snce ts formaton, 11 projects wth an aggregate capacty of 4,001.8 MW have

acheved fnancal closure. Currently, sx projects wth an aggregate capacty of about 7,532 MW

are under IIGs consderaton.As mentoned earler, MOP has already ssued gudelnes for tarff based bddng. It has

also recently notfed draft gudelnes for the development of hydropower project stes by prvate

developers.24 The salent features of these gudelnes are n Appendx 5.

22Report of the Standng Commttee on Energy, August 2005.

23Teesta III (1,200 MW) and Teesta VI (360 MW) promoted by Teesta Urja Lmted and Lanco Energy, respectvely, as jontventure projects wth SPDCL n Skkm, are under the actve consderaton of PFC.

24MOP. 2005. Gudelnes for Development of Hydroelectrc Project Stes by Prvate Developer.


31/84

1919Prvate Sector Partcpaton

State-level Initiatives

The hydro-rch states lke Uttaranchal, Hmachal Pradesh and Skkm have taken a number

of ntatves n recent years to promote a balanced growth of publc and prvate sector projects

(Appendxes 69). These are brefly dscussed below.

Uttarakhand: The key features of the government of uttarakhands polcy are (a) potentalhydro projects dentfed by the government of Uttaranchal are advertsed for nternatonal

compettve bds; (b) bds are nvted over a mnmum premum, payable upfront to the government

of uttarakhand, at the rate of Rs5 crores per project; (c) projects are allocated to bdders makng the

hghest bd over and above the upfront mnmum premum; (d) projects are allocated for an ntal

perod of 45 years on a buld-own-operate-and-transfer bass; (e) the developers of the project

have the rght to sell the power outsde the state; no agency of the state wll guarantee purchase of

power; and (f) 12% of electrcty generated s to be made avalable free of cost to the state durng

entre lfe of the project.

Himachal Pradesh: The key features of the polcy of Hmachal Pradesh are (a) selecton

of developer on MOU route for projects up to 100 MW and based on nternatonal compettve

bddng route for projects above 100 MW; (b) no clearances from CEA for projects selected on

compettve bddng route for projects costng up to Rs2,500 crores; (c) secondary energy rate to be

at par wth prmary energy, (d) premum on peak power, and (e) 100% foregn equty permtted on

the automatc approval route provded t does exceed Rs1,500 crores. Also for projects above 100

MW nstalled capacty, the government has reserved the rght of equty partcpaton up to 49% on

a selectve bass.

Sikkim: In order to expedte hydropower development through prvate sector partcpaton

n the State, the government of Skkm has formed the Skkm Power Development Corporaton Ltd

(SPDCL), to facltate jont venture projects between a prvate power developer and the government.

For SPDCL-promoted projects and as per the MOU sgned between the Skkm government and

a prvate power developer, 12% free power would be made avalable to the State and the prvate

power developer would be permtted to sell ts entre balance power drectly to needy states or

through power tradng agences, whchever way they would lke to sell. In all SPDCL-promotedjont venture projects, the governments equty partcpaton ranges from a mnmum of 10% to a

maxmum of 49%.

Looking Ahead

The above analyss shows that prvate sector partcpaton n hydropower development s lkely

to ncrease apprecably n the comng years. The excellent ntal response from prvate developers n

a number of states, despte the provson for free power and upfront premum and the fact that the

tarffs may eventually come under the purvew of the regulator, shows that there s an apprecable

reducton n ther rsk perceptons. Early mplementaton of the open access provsons, ncrease

n tradng actvty and premum for peakng power (as proposed n Government polces) would

further enlven the nterest of the prvate sector. A publc-prvate partnershp approach could alsocontrbute to ths.


32/84


The Small Hydro Segment

Inda has an dentfed small hydro (up to 25 MW) potental of nearly 10,000 MW dstrbuted over

4,000 stes. It s estmated there s stll an undentfed potental of almost 5000 MW. Nearly 1,500

MW of potental has already been tapped and projects amountng to around 600 MW are underconstructon. Table 5 shows state-wse detals of potental and exstng and ongong projects.

Potential Existing Projects Ongoing Projects

No. of Capacity No. of Capacity No. of CapacitySites (MW) Sites (MW) Sites (MW)

Andhra Pradesh 286 254.63 52 158.26 9 23.85Arunachal 492 1,059.03 51 36.37 26 47.64PradeshAssam 46 118 3 2.11 8 51.00

Bhar 92 194.02 4 44.90 10 15.00Chattsgarh 47 57.90 3 3.50 3 15.50Goa 3 2.6 1 0.05Gujrat 290 156.83 2 7.00Harvana 22 30.05 4 48.30Hmachal Pradesh 323 1,624.78 44 93.54 10 67.20Jamuna & Kashmr 201 1,207.27 27 102.24 9 13.31Jharkhand 89 170.05 6 4.05 8 34.85Karnataka 230 625.61 40 211.68 16 79.10Kerala 198 466.25 10 72.02 10 73.00Madhya Pradesh 85 336.325 7 38.96 4 26.40Mahafashtra 234 599.47 27 207.08 4 15.75Manpur 96 105.63 8 5.45 3 2.75Meghalaya 98 181.5 3 30.71 9 3.28Mzoram 88 190.32 16 14.78 3 15.50Nagaland 86 181.39 8 20.47 6 12.40

Orssa 161 156.76 6 7.30 7 40.97Punjab 78 65.26 21 108.40 1 2.70Rajasthan 49 27.26 10 23.85Skkm 68 202.75 12 355.60 5 15.20Taml Nadu 147 338.92 11 76.40 2 7.90Trpura 8 9.85 3 16.01Uttaranchal 354 1,478.24 72 65.20 29 32.42Uttar Pradesh 211 267.061 8 21.5 1 3.60West Bengal 145 182.62 18 92.28 5 5.62Andaman and Ncobar 6 6.40 1 5.25Total 4,233 10,324.37 478 1,553.26 188 604.94

Source: Powerlne, 2005.

Table 5: State-wise Details of Small Hydro Development

State/Union Teritory


33/84

2121The Small Hydro Segment

Small hydropower projects (SHPs) are generally developed n the potental regons by the SEBs/

state renewable energy development agences.25 Most of these SHP projects are grd-connected.

However, there are some projects that are decentralzed and are managed by local communtes/

NGOs. The Mcro and Pco hydropower projects come under the socal sector whch are set up

under rural electrfcaton programs and are mostly stand-alone/mn grd systems feedng power to

the under-prvleged populaton lvng n remote areas.

The Mnstry of Non-conventonal Energy Resources (MNES), whch s overseeng the

development of small hydropower, has set a target of tappng around 2,000 MW tll 2012. Varous

physcal and fnancal ncentves are beng extended to develop ths sector. The focus of the SHP

program at MNES s now toward commercalzaton through prvate sector partcpaton. Some of

the mportant ntatves taken by MNES are dscussed below.

Salient Features of UNDP-GEF Project

In 1995 MNES took up a project wth support from the Global Envronment Faclty (GEF)

and Unted Natons Development Programme (UNDP), amed at optmal utlzaton of

small hydro resources.26

Salent features are n Box 3. Ths project was completed n 2004.

Provision of Incentives

MNES s also provdng fnancal support to states for (a) dentfcaton of new potental stes and

preparaton of a perspectve plan, (b) detaled survey and nvestgaton and preparaton of DPRs, (c)

project mplementaton, and (d) for mplementaton of off-grd mcro hydro projects up to 999 kW

for rural electrfcaton development n ther respectve state. The level of support beng provded s

showninTables69.

25In states lke Andhra Pradesh, Hmachal Pradesh, Punjab, Orssa and Uttaranchal prvate players have also comeforward.

26The project had an approved outlay of Rs450 mllon ($5 mllon) shared through GEF nputs of $7.5 mllon andGovernment nputs of Rs224.8 mllon. The project was executed by MNES and montored by UNDP.

Identification of up to Identification of More Than

50 New Sites 50 New Sites(Rs lakhs) (Rs lakhs)

North-Eastern Regon, Skkm, Jamuna andKashmr, Hmachal Pradesh, and Uttaranchal 22.50 30.00(Specal Category States)Other States/Unon Terrtores 15.00 22.50

State/Union Territory

Table 6: MNES Support for Assessment of Potential Preparation of Perspective Plan

Above 1 MW and Above 10 MW andUp to 1 MW up to 10 MW up to 25 MW

(Rs lakhs) (Rs lakhs) (Rs lakhs)

North-Eastern Regon, Skkm, Jamuna andKashmr, Hmachal Pradesh, and Uttaranchal(Specal Category States) 1.75 3.00 5.00

Notfed hlly regons of all other states andslands 1.50 2.50 4.00

Plan and other regons of all states 1.25 2.00 3.00

Area

Table 7: MNES Support for Preparation of Detailed Project Reports


34/84


Area Below 500 kW Above 1 MW Above 5 MW Above 15 MW500 kW up to and up to and up to and up to

1 MW 5 MW 15 MW 25 MW

Interest subsdy Plan 5.00% 2.50% 2.00% 1.50%for commercalprojects

Hlly and North-Eastern Regon 7.50% 5.00% 3.00% 2.00

Captal subsdy North-Eastern 90% cost of 90% cost of 75% cost of the Equpment Cost+ Nlfor government Regon and the project the project project up to 25% of Cvl costprojects Skkm up to Rs up to Rs Rs45,000/-kW lmted to Rs22.50

75,000/-kW 60,000/-kW crores/project

Mddle Hmala- Equpment Cost+ Equpment Cost+ Nlyas, Ladakh, and 25% of Cvl Cost 25% of Cvl CostAndaman & up to Rs3.00 lmted to Rs15Ncobar Islands crores/MW crores/project

Other areas Equpment Cost+ Equpment Cost+ Nl(only notfed 25% of Cvl Cost 25% of Cvl Costhlly regons) up to Rs1.5 crores lmted to Rs7.5

per MW crores/project

Renovaton and modernzaton of Lmted to Rs10 Nlprojects crores/project

Development/Upgradaton ofwater mll

Mechancal mode Rs30,000Mechancal/electrcal mode Rs60,000

Table 8: MNES support for Project Implementation

Equpment Cost+ 50% ofCvl Cost up to Rs45,000/kW

Equpment Cost+ 50% of

Cvl Cost up to Rs30,000/kW

Up to Rs2 crores/MW

Table 9: MNES Support for Off-grid Micro Hydro Projects for Rural Electrification

Region Up to 100 kW Above 100 kW & up to999 kW

For North-Eastern Regon, Skkm, Jamuna and 90% of the project cost lmted Rs60 lakhs + Rs43,250/kWKashmr, Hmachal Pradesh, and Uttaranchal to Rs60,000/kW

Notfed hlly regons of other states and 90% of the project cost lmted Rs60 lakhs + Rs43,250/kWslands to Rs60,000/kW

Plan and other regons of all other states 90% of the project cost lmted Rs45 lakhs + Rs29,250/kWto Rs45,000/kW

Barriers in Development of Small Hydro Segment

The barrers perceved n development of the small hydro segment are techncal, procedural and

cost-related n nature. The techncal barrers nclude factors such as accessblty to the stes andrsks nvolved n transportng heavy equpments to the stes. The procedural ssues prmarly relate

to the number of clearances requred before takng the project. Typcally, a developer s requred to

get a project allotment from the state nodal agency, obtan clearance from MOEF where forestland

s nvolved (n projects costng more than Rs100 crores), clearance from the Irrgaton/Water Re-

sources Department, clearance from the state government on land avalablty, etc. In the absence

of any provson for a sngle wndow clearance, the process of obtanng these clearances/approvals

may take a long tme. In some areas securty problems are also experenced due to nsurgency. On

the cost front, t s a matter of some concern that equpment prces are not gong down due to the

lmted number of players.


35/84

2323The Small Hydro Segment

State-level Policies

As mentoned earler the development of small hydro has been largely governed by state-level

polces. The regulatory commssons are now lookng nto these polces. A few of the regulatory

commssons have come out wth ther orders whch cover buy-back rate, wheelng and bankng

condtons, whch vares from state to state. For example, the buy-back rate n Uttar Pradesh s

Rs3.39 /kWh compared to Rs2.69/kWh n Karnataka. Smlarly the lmt for bankng surplus energy

s 2.5% n Karnataka, whereas t s 10% n Maharashtra. Snce electrcty s a concurrent subject as

per the Consttuton of Inda, these varatons could be expected. However, consderng the renewed

thrust beng gven for renewable energy n Electrcty Act 2003, t s lkely that there may be some

harmonzaton of approaches wth ncreased ncentves amed at expandng the share of renewable

sources n the power procurement portfolo of dstrbuton companes.


36/84


Energy Security Issues and

Regional Cooperation inHydropower Development

In recent years, as a result of economc and populaton growth, South Asa has experenced a

sharp ncrease n energy consumpton. As a consequence, the growth n commercal energy

demand n these countres s very hgh compared to other regons of the world, and s projected

to contnue to grow n future. Ths rapdly growng energy demand coupled wth nadequate

supples s a challenge for the energy securty of South Asa. Despte ts rch resource endowment,

the regon contnues to face power shortages, whch has constraned economc growth.

The regon s well endowed wth natural resources and there s tremendous scope for

cooperaton n the feld of energy. Nepal and Bhutan, the two neghborng countres of Inda have

rch hydropower potental far n excess of ther domestc requrement. Inda wth ts large demandsupply gap offers a ready market for these two countres. Cooperaton between Inda, Nepal and

Bhutan on the energy front can therefore provde a wn-wn stuaton for all. Inda could mport

hydropower to meet part of the countrys energy needs. Nepal and Bhutan, on the other hand,

could earn rch revenue to boost ther economy. Besdes, t could open up optons of electrfyng

the border areas of these countres by extendng the power grd of Inda. Ths could also lead to the

evoluton of the South Asan Assocaton for Regonal Cooperaton (SAARC) power grd. The status

of cooperaton between these countres s dscussed below.

Cooperation with Nepal

Inda has been assstng Nepal n the development of ts hydropower potental. Four hydroelectrc

schemes, namely, Pokhra, Trsul, Western and Gandhak and Devghat, have been mplementedn Nepal wth fnancal and techncal assstance from Inda. The Government of Inda nomnated

the Power Tradng Corporaton (PTC) as the nodal agency to deal wth matters relatng to power

exchange wth Nepal n July 2001. PTC s also the sole agency from the Indan sde for fnalzng all

commercal and techncal arrangements/systems wth Nepal Electrcty Authorty (NEA) and coord-

naton wth assocated Indan agences. The blateral exchange of power at the borders between the

two countres s presently at a level of 50 MW. The two sdes through Indo-Nepal Power Exchange

Commttee decde the tarff jontly at perodc ntervals wth the underlyng prncple of meetng

the cost of supply of power. The power exchange between the two countres s made possble by

nterconnectons at the voltage levels of 11 kV, 33 kV and 132 kV at 22 nterconnecton ponts.


37/84

2525Energy Securty Issues and Regonal Cooperaton n Hydropower Development

During20032004Nepalhadimportedaround186millionunits(MUs)ofenergyfromIndiaand

exported 138.90 MUs. As per the water resources strategy of Nepal, by 2017 Nepal ams to develop

2,230 MW hydropower to meet the projected demand of 2,230 MW ncludng 400 MW for export

to Inda. Under a hgh growth scenaro, the strategy projects that by 2027 the country would earn

sgnfcant natonal revenue by developng a total hydropower capacty of 22,000 MW ncludng

15,000 MW for exports.27

Three major mult-purpose projects n Nepal, vz. Karnal, Pancheshwar, and Saptakosh are

presently under dscusson at varous levels as mutually benefcal projects. The feasblty report

for the Karnal mult-purpose project (10,800 MW) was prepared n 1989. Key parameters of ths

project are to be fnalzed after mutual dscussons. A Jont Commttee on Water Resources headed

by the respectve water resources secretares has been consttuted to act as an umbrella commttee

to ensure mplementaton of the exstng agreements and also to oversee work of all techncal and

expert-level commttees related wth water resources. Durng the meetng of the Jont Commttee,

t was decded to ntate consultatons for the development of the Karnal Project. Investgatons

have been carred out n respect of the Pancheshwar mult-purpose scheme (5,600 MW) by the two

countres n ther respectve terrtores. A Jont Project Offce (JPO) was establshed n Kathmandu

n December 1999 to carry out addtonal nvestgatons and for preparaton of the DPR. The JPOwas closed n July 2002. A draft DPR has been prepared by the Indan sde, whch s to be mutually

agreed to. Development of ths project s covered under the Integrated Mahakal Treaty sgned

between Nepal and Inda n February 1996. Inda has offered fnancal and techncal assstance for

nvestgaton and preparaton of the DPR of the Saptakosh Hgh Dam Multpurpose project and Sun

Kos Storage-cum-Dverson Scheme. A JPO was establshed on 4 August 2004 n Bratnagar, Nepal,

for takng up feld nvestgatons and studes for preparaton of the jont DPR n about 30 months.

Besdes the above, a number of other projects, such as Burh Gandak (600 MW) and Upper Karnal

(300 MW), are also under dscusson between Inda and Nepal. Jont techncal expert groups have

been consttuted for the above projects for gudance for carryng out nvestgatons and preparaton

of the DPRs.

Cooperation with Bhutan

Inda has had a long assocaton n provdng techncal and fnancal assstance to Bhutan n the de-

velopment of ts hydropower resources. Electrcty s Bhutans prncpal export commodty and the

largest revenue earner. Chukha hydropower project (336 MW) has been an mportant project de-

veloped as a jont venture between the Government of Inda and the Royal Government of Bhutan,

wth the Government of Inda provdng the funds for the project. The constructon of the Chukha

hydroelectrc plant was started n 1978. It was successfully commssoned n 1988. The project

was handed over to Bhutanese management n June 1991. About 84% of energy generated from

Chukha plant s exported to Inda.The Kurchu Hydroelectrc Project (60 MW) n eastern Bhutan

has also been mplemented wth Indan fnancal and techncal assstance. Energy traded durng

20032004wasaround1,752MU(1,495MUfromtheChukhaand257MUfromKurichhu).

Another project, vz., the Tala Hydroelectrc Project (1020 MW) has been taken up formplementaton and s beng executed by Tala Hydro-electrc Project Authorty (THPA) comprsng

the Indan and Bhutanese engneers. Desgn and engneerng consultancy for the project n respect

of the electro-mechancal and cvl works s beng rendered by the CEA, Central Water Commsson

(CWC), and Water & Power Consultancy Servces (WAPCOS). The project s beng funded by Inda

through grant and loan and a major porton of the power generated wll be utlzed by Inda. The

projectisscheduledforcompletionby20052006.InvestigationofSankoshmulti-purposeproject

27SASEC. 2004. Issues Paper on Regonal Energy Cooperaton, prepared by Leena Srvastava and Neha Msra.


38/84


(4,060 MW) has been completed by the CWC and DPR prepared by the CEA/CWC. Investgaton

of two hydroelectrc projects, namely Wangchu (900 MW) and Bun akha (180 MW), have been

completed and the DPR prepared. Further, the Government has agreed to provde assstance for

development of two hydro projects, namely Mangdechhu (360/600 MW) and Punatsangchhu

(870/1000 MW). A mult-dscplnary team vsted the Punatsangchu project ste n May 2004 for

dentfcaton of alternatve stes and also to frm up assocated survey and nvestgaton for the

preparaton of DPR and at present, ths survey and nvestgaton work s n progress.28

Cooperation with Myanmar

The possblty of developng the Tamanth project (1,020 MW) n Myanmar and mportng power

to Inda has been under consderaton for some tme. Presently NHPC s preparng a PFR for ths

project.

28TERI Energy Data Drectory & Yearbook, 200405.


39/84

27

Conclusions

I

ndas power sector s posed to grow at a fast pace n the comng years. Ths s consdered

crucal to sustan the countrys economc growth. The reform measures beng mplemented

and polcy ntatves taken by the Central and state governments, as dscussed n the report,are expected to provde an enablng envronment for ths.

Inda has an assessed hydropower potental to the tune of 84,000 MW at 60% load factor;

out of ths only about 20% has been developed so far. Consderng the large untapped potental and

the ntrnsc characterstcs of hydropower n promotng the countrys energy securty and flexblty

n system operaton, the Government s gvng a thrust to accelerate hydropower development.

In the past varous factors such as dearth of adequately nvestgated projects, envronmental

concerns, R&R ssues, land acquston problems, regulatory ssues, long clearance approval

procedures, power evacuaton problems, dearth of good contractors, and n some cases, nter-state

ssues and law and order problems have contrbuted to the slow pace of hydropower development.

There has been large tme and cost overruns n case of some projects due to geologcal surprses,

R&R ssues, etc.

The above concerns are beng addressed through a number of legslatve and polcy ntatvesat the Central and state level. As dscussed n detal n the report, t

Documents

Reports Hydropower Devt India Hydropower Devt India