Ministry to promote small hydro projects

CHENNAI, Aug 15: The ministry of non-conventional energy sources (MNES) is promoting small hydro projects (SHP) of up to three mw to aid ...

CHENNAI, Aug 15: The ministry of non-conventional energy sources (MNES) is promoting small hydro projects (SHP) of up to three mw to aid the development of regional and remote areas. The ministry has conducted a nation-wide survey and identified a total potential for 2,039.67 mw in 25 states and the Union Territory of Andaman and Nicobar Islands.

Sites with a total potential of about 600 mw have been offered by states for commercial projects. The allotment of sites has already been finalised in Karnataka, Kerala and Andhra Pradesh. Feasibility studies have been completed by the developers in Uttar Pradesh, Himachal Pradesh and power purchase agreements (PPAs) are under finalisation, according to the annual report of MNES. These projects are expected to be taken up for execution in 1998-99.

Ten states, which have large potential for SHPs, have announced policies on wheeling, banking and buy-back of power generated to attract private sector investment.

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While most states allow power banking and sales tothird party, Tamil Nadu and Kerala do not allow any of these. Excess power has to be sold to the state electricity boards (SEBs). Kerala has tied up with China for the development of SHPs.

In 1992, at the start of the Eighth Plan, the installed capacity of SHP projects was 93mw. By 1997, there were 216 projects with a combined capacity of 155.38mw. Work is in progress for 208 projects to produce 230.40mw of power.

To further accelerate the exploitation of the SHP potential and to promote commercialisation in the sector, MNES has charted out several measures. Some of the main objectives and activities being undertaken during the Ninth Plan are:

Small hydro resource assessment;

encouragement to commercial SHP projects;

renovation and modernisation of old SHP projects;

special incentive package for North-Eastern states to exploit small hydro potential;

upgradation of water mills; and

intensification of industry-based research and development.

MNES issupporting 82 demonstration projects for 96.87mw in 19 states and union territories. It gives a capital subsidy of up to 50 per cent of the cost of the project subject to a maximum of Rs 2.50 crore per mw. A total of 26 projects for a total capacity of 13.2mw have been already been commissioned. The others are at various stages of execution and many are expected to be completed in 1998-99.

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The ministry recently introduced an interest subsidy scheme through the financial institutions. The scheme provides a maximum capitalised interest subsidy of Rs 1.12 crore per mw for SHP projects in the hilly north eastern states and Andaman and Nicobar Islands. For projects in other regions, it is up to Rs 38.3 lakh per mw.

A capital subsidy of Rs 15,000 per mw is being given to projects of up to 100kw capacity undertaken by government departments, non-governmental organisations or local bodies in the N-E regions and Anadaman and Nicobar Islands.