There has been a worldwide growth in hydropower development, with 31.5 GW new capacity installed in 2016. This figure includes 6.4 GW of pumped storage – nearly double the previous year – while there is a further 20 GW of pumped storage under construction globally. This growth is indicative of impending pressure on hydropower in providing flexible support to renewable energy systems, as countries around the world take steps to meet the carbon reduction goals of the Paris Agreement.

India is the seventh largest producer of hydroelectric power in the world with the installed capacity of 49769 MW  capacity. This includes 45,293 MW of large hydro, which is 13.6% of total utility electricity generation capacity in India. In addition, small hydropower units with a cumulative capacity of 4,476 MW have been installed under renewable energy. It can also be seen that hydropower sector is dominated by Center and states with an installed capacity of 29,858 MW and 12,041 MW respectively, whereas private sector produces only 3,384 MW of hydropower.

The public sector has a dominant share of 92.5% in the hydroelectric sector. National Hydroelectric Power Corporation (NHPC), Northeast Electric Power Company (NEEPCO), Sutlej Jal Vidyut Nigam (SJVNL), THDC, NTPC-Hydro are some of the public sector companies engaged in the development of hydroelectric power in India. The private sector owns about 7.5% out of the total capacity, but the share of private sector in hydropower is expected to increase in the coming years. Indian companies have also constructed hydropower projects in Bhutan, Nepal, Afghanistan and other countries.

In order to attract the private sector in the hydropower, the government began discussions in 2016 to extend the scope of renewable energy to include hydropower stations with capacities greater than 25 MW. At present, only hydropower plants of up to 25 MW are classified as renewables. This will help the government in meeting the country’s target of producing renewable energy of 175 GW by 2022, which would enable hydropower projects to attract more capital and free up existing projects to sell power. Recently on March 13, 2018, Standing Committee on Energy tabled its report in the parliament to resolves issues such as providing long-term cheaper loan and enabling infrastructure for hydropower projects and classify all hydro projects as renewable irrespective of their capacities.

Under the Paris Agreement, India is also committed to focus on clean energy expansion by 2022. The Modi government announced in 2015 that by 2022, India would have clean energy targets of 175 GW, with 100 GW for solar, 60 GW for wind, and 15 GW for other renewables, which also would have given a push to hydropower sector in India. The focus of hydropower projects would be mainly on Himalayan Regions states including Arunachal Pradesh, Assam, Himachal Pradesh, Jammu and Kashmir, Mizoram, Manipur, Nagaland, Meghalaya, Uttarakhand, Sikkim and Tripura.  As per the Central Electricity Authority (CEA), the total potential hydropower in India is 1,48,704 MW, of which 84% potential hydropower is concentrated in the Himalayan region. Additionally, Bangladesh, India and Bhutan have signed a memorandum of understanding to construct the 1,125 MW Dorjilung plant in Bhutan.

It should be noted that currently, coal-based power projects are under threat due to lack of coal linkages and power purchase agreements making them financially unviable, due to which a number of existing power projects have been stalled and many companies have been reluctant in expanding new coal power projects. This would give a boost to hydropower projects in many regions, especially in Himalayan regions.

Private players have been insisting that out of the total power production at least 40% should come from hydropower. In a letter written to the government last year, Association of Power Producers (APP), a forum of private power companies in India, had last year written to the government seeking renewable energy status for hydropower projects.

In the letter, Ashok Khurana, Director-General at Association of Power Producers wrote, “For optimal load management, hydro needs to be around 40% of the energy mix. During the last three decades, the hydro generation has deteriorated considerably. The introduction of hydro purchase obligation will help restore the balance.”

Categorizing all hydropower projects as renewable energy is not only government’s agenda, but also the pressure has also been coming from private players, international financial Institutions and other actors. World Bank on its website mentions, “The World Bank Group (WBG) will continue to support well-designed and implemented hydropower projects of all sizes for both local development and climate mitigation reasons.”

After the Paris Agreement, there is a push to increase hydropower share in overall energy share, where the pressure is coming from both national and international actors. The government has already tabled its report in the Parliament last month to bring hydropower projects of all size under renewable energy, irrespective of their capacity. This policy changes will push hydropower in the Himalayan states of India. It will not only increase the corporate or private sector intervention in the hydropower sector but the supremacy of the government will slowly go to the private player from the government. It will also fulfil the major agenda of World Bank and ADB by pushing Public Private Partnership (PPP) project in the sector. It is shocking that the government of India has not learnt yet from the past experiences of large hydropower include Sardar Sarovar project and Maheshwar Project in Narmada valley in Madhya Pradesh or Bhakra Nangal Dam in Satluj Valley in Himachal. These projects are witnessing displacement of thousands of people from their ancestral place, destroying their livelihoods and violating human rights in the name of development leaving them with no alternatives. After so many years of the struggle, thousands of displaced people from above projects still waiting for justice in these valleys.

*This is the first part of the two-part series on hydropower in India. The second part titled ‘The Trends in Hydro Power Financing in India’ can be accessed from here.

One Comment, RSS

  • M.M.RAWAL

    says on:
    October 19, 2018 at 7:23 pm

    GOOD INFORMATION. WHAT IS LATEST ABOUT HYDRO POLICY

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