Inspite of its inherent advantages of being a green and clean source of energy and its ability to keep the Grid in balance, we have been able to tap only 65000 MW out of total identified hydro power potential of 1,45,000 MW in India. In Himachal about 15000 MW is yet to be harnessed out of total identified potential of 25000 MW
The cheaper renewable sources of energy like solar and wind and Protests by locals in the power projects sites pose new challenges to the hydropower sector in Himachal pradesh and Himalayan region as a whole to the developers whether private or public sector. Despite various incentives announced by the government the independent power developers have walked out from the stare over the years
Low internal rate of return on remaining hydro power projects is the key reason for slow pace of development in this sector. It is pertinent to mention that CEA conducts ranking study of identified hydro power projects on the basis of techno-economics of the project and accordingly, projects are classified in to four categories, Category A, B, C and D. Category A projects are the best in terms of viability whereas Category D projects rank the lowest. It is also worth while to mention that hydro power sector was a state monopoly till late nineties and most of Category A & B projects were naturally allotted to and commissioned by PSUs. However, majority of left out projects belong to Category C & D and are, therefore, not so attractive in terms of viability. Questionable economic viability of the projects gets compounded by lack of roads of adequate capacity to project area, problems of land acquisition, undue interference by NGOs & locals and prohibitively long time taken in obtaining statutory clearances. As a result, developers are keeping fingers crossed before taking a final call. Even the lenders are not very enthusiastic to come forward.
Looking back solar energy in early nineties would cost a whopping amount of Rs 15-20 per unit whereas hydro costed not more than Rs 3.0 per unit. However, Govt of India has extended a number of incentives and concessions to promote renewable energy such as Solar and Wind under international obligations of reducing use of fossil fuels. As a result of these concessions, cost of solar and wind energy has come down to Rs 2.50 to 3.0 per unit, whereas hydro energy costs about Rs 9.0 per unit, thus making hydro energy un-competitive in the market.
Consequently, national hydro power scenario is dismal. In Himachal also, even large Companies like Tata Power, Reliance Power and Larsen & Toubro have surrendered the projects which were allotted to them through competitive bidding. These companies find solar and wind energy projects more attractive because of so many incentives extended by the Govt of India and are no longer keen to develop hydro power projects.
Private developers demand that hydro energy should be considered at par with renewable energy like solar and wind for all intents and purposes so as to make it viable and attractive. Private developers also consider external roads leading to project sites as a major constraint in the development of hydro power. They have always been of the view that the construction of external roads of requisite standards leading to project sites and arrangement for evacuation of power by the Govt are essential steps before taking a call on execution of hydro power projects.
Land slides and consequent loss of life and property that occurred in District Lahaul & Spiti and District Kinnaur during rainy season of year 2021 has caused huge anger among locals and they hold construction of hydro power projects entirely responsible for these natural disasters. Locals are so much agitated that some of the Panchayats in these tribal districts even boycotted recently held by-election of Mandi Parliamentary Constituency. Interestingly, a major amount of untapped hydro power potential exists in these tribal districts. Convincing the locals to become supportive partners in harnessing the remaining potential is going to be a daunting task for both the Govt and the developers.
About the author:
Manoj Kumar is a hydropower engineer who has worked in various power projects on senior positions in the Himalayan region in India and Bhutan. His views are personal.
