Hydel power projects may get a regulatory boost to solve their problems towards offering a competitive tariff structure.
"Extend the useful life of the project up to 50 years from existing 35 years and the loan repayment period up to 18-20 years from existing 10-12 years for moderating upfront loading of the tariff," Central Electricity Regulatory Commission has suggested in its consultation paper for the tariff regulation for 2019-2024.
Hydel projects get project loan for 10-15 years, which is a major cause for high tariff in hydel power, resulting discoms reluctant to buy hydel power, power department officials had said earlier.
If the useful life is extended in the final regulation then it will be a major relief when projects are facing huge time and cost overruns. The repayment burden can be moderated and that would felicitate demand, a banker told PTI.
The final multi-year tariff regulation by CERC is expected to be rolled out by December after it goes through the consultation process, a CERC official indicated.
According to available data as on September 2017, 18 hydro projects of 6.2 GW capacity were stalled midway. Currently, while hydro projects with total 145.3 GW capacity have been allotted across the country, only 30.7 per cent of the projects have been completed.
Currently, the share of hydro power is just 14 per cent in the country.
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