Hydro power in dire need of revival as solar, wind race ahead

Capacity of hydropower projects has remained around 40,000 Mw for the past three years, while that of the renewable energy has increased about 20% during the same period

Policy niggles, regulatory hurdles and scams have hit the hydro power sector with the upcoming renewable energy sector racing ahead in growth numbers.

Of the 3 lakh MW power generation installed capacity, renewable energy including solar, wind and biomass stood at 42,850 MW and hydro at 42,783 MW for fiscal beginning April 2016. Thermal power generation from coal and gas still holds the lion’s share though at 1.72 lakh MW. Solar power capacity currently stands at the historic high of 6,000 MW and balance is wind power and biomass etc. India is fifth largest country in terms of wind power generation capacity.

This paper reported during last quarter that renewable energy would surpass the growth of hydro power soon. 

The installed capacity of hydropower projects has remained around 40,000 Mw for the past three years, while that of the renewable energy sector has increased about 20% in the same period. In the past decade, renewable energy (Solar and wind power) has grown by 89% while hydro has staggered with 28%.

For the languishing hydro sector, the NDA government is planning a revival plan. Since it came to power, NDA government has given renewed push to renewable energy especially solar power. The same would now be extended to hydro. Business Standard reported last month that the government is looking to revive the sector with a three-pronged approach. 

The first move is to increase the ambit of small hydro to 100 MW from current 25 MW. This would in turn help achieve the renewable energy targets of states and also bring a large number of projects under the net of government subsidy and other tax benefits. Also, senior officials said a considerable amount of hydro capacity would be planned in neighbouring states of Nepal and Bhutan.

Hydro power during UPA era was given a spurt with large scale allocation of hydro power projects to private sector. Arunanchal Pradesh alone awarded close to 60,000 MW of hydro projects to odd 130 companies. However, almost nil number of projects has been commissioned due to regulatory and legal issues.

“This would make available the tax benefits and subsidies that small hydro enjoys to even larger projects also. This is done in hope of reviving the private sector investment in the sector and also gives opportunity to small players to expand capacity at the same location,” said a senior official at the ministry of new and renewable energy (MNRE).

Around 17,000 MW of hydro power projects with cumulative cost of Rs 1,63,000 crore applied to NHPC to either take over the project or form a joint venture to operate the project.

Majority of projects being offered to NHPC were awarded between 2008-2010 in hydro resource rich states such as Arunachal Pradesh and Sikkim. However NHPC said they would not take over any of the projects, rather “could contemplate on taking over operations on chargeable basis, but that too in some cases,” said a senior official requesting anonymity.