The government will have to invest Rs 132,000 crore in 22,000 mw of hydel projects over the next 10 years to maintain the current hydel-thermal ratio of 25:75. While the plant load factor in thermal stations has hovered around 60 per cent, hydel generation per mw of installed capacity has fallen to 30-45 per cent from 50-55 per cent during the 1950s. This apart, the share of hydel in total generation is also declining.
These two trends are alarming: the hydel-thermal mix of 25:75 is well below the prescribed 40:60.
The hydel power policy announced lays emphasis on reviving the flagging sector. The key features of the policy are creation of the Power Development Fund, formation of a central committee to asses increases in cost overruns of projects and differential tariff for power from hydel projects.
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The package ensures mobilisation of resources for the hydel sector and also provides much-needed incentive for flow of investments into the sector.
The differential power tariff provides higher returns for power during peaking periods and a reduction during off-peak times, keeping total tariff at the same level. The special committee will ensure that projects do not get stalled due geological risks.