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Govt turns to small hydro projects to meet power needs

The initial objective of the mission is to identify the reasons for slowdown in the small hydro sector and address these through appropriate policy.

Written by Amitabh Sinha | New Delhi |
March 9, 2015 3:40:58 am

After unveiling its big plans for harnessing solar energy and wind energy, the government has turned its focus towards small hydro sector as well, finalising a national mission that will aim at setting up 5000 MW of small hydro projects in the next five years.

Small hydro is the classification used for hydropower projects below 25 MW capacity, their distinguishing attribute being that these are mostly run-of-the-river type and do not require the construction of dams. Thus, apart from the fact that electricity is generated from a renewable source, small hydro projects have far lesser environmental impacts as well.

India has an estimated 20,000 MW of potential capacity that can be generated through small hydro projects, out of which less than 4000 MW is currently being utilised. The further development of small hydro projects has been hampered mainly by rising costs, with the construction costs of these projects increasing to Rs 8.5 crore to Rs 9.5 crore per MW from between Rs 5 crore and 6 crore per MW a few years ago.

The initial objective of the national mission is to identify the reasons for the slowdown in the small hydro sector and address these through appropriate policy interventions. According to a draft mission document, the mission will add only 500 MW in its first two years, but hopes to build another 4,500 MW of capacity in the next three years. About 1,000 MW of this is proposed to be developed through projects on canal drops, dam outlets and water outfall structures.

The mission, proposed to be launched from April 1, will promote technology development as well, which can open new avenues for small hydro projects. It also aims at helping the state governments in renovating the existing projects in a bid to improve their efficiency and capacity. It is being estimated that renovation of old projects itself would result in about 30-35 per cent increase in electricity generation.

Though hilly areas offer much better prospects for small hydro projects — about 50 per cent of the small hydro potential lies in the Himalayan states of Arunachal Pradesh, Uttarakhand, Jammu and Kashmir and Himachal Pradesh — significant potential has been identified in Maharashtra, Chhattisgarh and Karnataka as well.

Private participation in the development of small hydro projects, already present in a significant proportion, is to be enhanced further through the mission through planned financing mechanisms. A budget of Rs 386.5 crore for offering incentives for development of the sector has already been approved for the remaining two years of the 12th Plan, which is going to be the first phase of the mission. For phase II, financial allocations are proposed to be made in the 13th Plan. However, no direct subsidy to the private sector has been envisaged.

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