13-08-2013, 02:42 PM
Hydropower Development in India
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Background
India has immense economically exploitable hydropower potential of over 84,000 MW at 60% load factor (148700 MW installed capacity), with Brahamaputra, Indus and Ganges basins contributing about 80% of it. In addition to this, small, mini and micro hydropower schemes (with capacity less than 3 MW) have been assessed to have 6781.81 MW of installed capacity. Of this enormous hydro potential, India has harnessed only about 15% so far, with another 7% under various stages of development. The remaining 78% remains un-harnessed due to many issues and barriers to the large scale development of Hydropower in the subcontinent.
Various studies have established the ideal Hydro:Thermal power mix for India at to be at 60:40. The present mix of 75:45 is creating much problem in the Indian power system with country facing energy shortage of 9.3% and peaking shortage of 12.8%. The total requirement ending XI plan is set to be 206000 MW. The current installed thermal and hydropower capacity stands at 66% and 26% of the total power generated with 83272 and 32726 MW respectively. Remaining 8% of 10091 MW is achieved from other forms including wind and nuclear. The current captive generation amounts to 14636 MW.
India’s power system is divided into five major region namely, the Northern region, Western region, Southern region, Eastern region and North-Eastern region, with each region facing separate issues. While the Eastern and North-Eastern regions are power abundant, the Northern and Western regions have greater power demands. The hydropower potential is largest in NE region with 98% of it still untapped. Northern, Eastern, Western and Southern regions have 79%, 77%, 23% and 33% untapped hydropower potential respectively.
Benefits of Hydropower and reasons for its slow development
Hydropower has immense benefits and has been brought forward as a preferred option for power generation over the last decade. The reasons for these can be summed as follows:
Abundant potential of hydropower development in India as discussed above
With relative independence from international market like oil prices, hydropower involves no extra foreign exchange outgo
Hydropower is a no-inflation power as Water- the ‘raw material’ for power generation is free of inflation
Environment friendly
Hydropower projects support socio economic development of remote areas as the project site is developed
Hydropower is cost effective and renewable form of energy
It has additional benefits like irrigation, flood control, tourism etc.
Development since National Hydropower policy 1998
In 2001, Central Electricity Authority (CEA) introduced a ranking study which prioritized and ranked the future executable projects. As per the study, 399 hydro schemes with an aggregate installed capacity of 106910 MW were ranked in A, B & C categories depending upon their inter-se attractiveness. This was followed by a 50,000 MW Hydro Initiative in which preparation of Pre-Feasibility Reports of 162 Projects was taken up by CEA through various agencies. The Project-Feasibility Reports (PFRs) for all these projects have been prepared and projects with first year tariff less than INR 2.50/kWh have been identified for preparation of Detailed Project Report (DPR)
Renovation, Modernization & Up-rating
In order to augment the hydro generation and improve the availability of existing hydro power projects, Government of India has put emphasis on Renovation, Modernization & Up-rating (RM&U) of various existing Hydro Electric (H.E.) power projects in the country. RM&U of the existing/old hydro electric power projects is considered the best option, as this is cost effective and quicker to achieve than setting up of green field power projects. The cost per MW of a new H.E. power project works out to about INR 4 to 5 Crores whereas the cost per MW of capacity addition through up-rating and life extension of old H.E. power project works out to about 20%. Further, the RM&U of a hydro project can be completed in 1 to 3 years depending upon scope of works as compared to gestation period of 5 to 6 years for new hydro projects.
Financial issues
There is also a need to off-load indirect cost components on hydro project. Many hydro projects are located in troubled areas and infested by militancy and terrorist activities. There is an urgent need to amend the present policy of the Government in regard to charging the entire security expenditure from concept and until commissioning - on the project cost. However, the recurring expenditure incurred on security, once a project goes on stream could to be charged on the project developer.
The cost of access roads should not be included in the project cost, as development of hydro projects triggers economic and commercial activities around the project site and results in economic benefit to the State. Inclusion of R&R, flood moderation costs, along with the provision of 12% free power to the State in the capital cost of the project needed reconsideration as the provision did not apply to thermal power projects.
One Stop Window for Clearances
Private investors expect clear rules, a streamlined application process and a reasonable timeline for response from the HP state government.
Several clearances including IPH, Public Water Department (PWD), Gram Panchayat, Wildlife, Forest, conversion of private land under section 118 of H.P. Land Reforms and Tenancy Act, No-objection certificate (NOC) from Fisheries Dept. and NOC from Pollution Control Board are to be taken within the Six months time. The offices of respective departments are located in different places and the given time frame is very inadequate for the application process.
The procedure should be simplified. Once the project is conceived, the government should indirectly give clearances to set it up. Considering the small size of projects, the government should give one clearance to cover all the items. Alternatively, there should be a single point body to give the clearances.
Streamlining Fees and Royalties
Several added costs have burdened the project. The Net Present Value (NPV) payment for government land to Forest Dept., fees to Pollution Control Board and compensation to Fisheries Dept. are significantly high. Recently, new norms for Fisheries have been proposed @ INR 5 lacs per MW and INR 1 lac per Kilometer (KM) upstream of Tail Race which may add up to 30 lacs for a 5 MW project.