India’s National Mission on Small Hydro, Rehabilitation and Development of Hydroelectric Projects up to 25 MW

In India, small hydroelectric projects up to 25 MW are the focus of a new joint initiative between federal and state governments and private sector groups to develop new generation facilities and rehabilitate and upgrade existing schemes. The details of the program were released last week in a draft of the National Mission on Small Hydro (NMSH), a document prepared by India’s Ministry of New & Renewable Energy (MNRE).

The NMSH is a multi-phase project scheduled to begin April 15. Phase 1 of the US$71.5 million project seeks to achieve installation of an additional 500 MW of small hydro capacity in the next two years. MNRE seeks to add an additional 4,500 MW of small hydropower in the subsequent three years, “for which preparation including appropriate policy interventions will be done in the first two years of the mission,” according to the draft.

NMSH’s objective is to address issues responsible for decline of the small hydro sector in India and to regenerate private sector interest in making investments in this renewable energy sector.

India’s hydroelectric power contributes 40,798 MW of energy out of the country’s total installed 253,389 MW. However, the draft indicates the share of hydroelectric total installed capacity has steadily decreased to 16.33% in 2014, down from 46% in 1960.

The draft indicates reasons for the decline in small hydro include increasing costs associated with operating projects; tariffs on the generated power are not attractive to private investment; the low rate of average pool power purchase rates in hydro-rich states and unsold Renewable Energy Certificates in the open market.

Additional reasons for the decline in small hydro sector are long implementation times from development to generation and multi departmental statutory clearances associated with the projects.

MNRE said it considers rehabilitating and upgrading the country’s existing projects, along with partnering with the private sector, as the most economically viable method of increasing hydro generation in a short amount of time.

During the program’s first two years, officials would like to complete site selection and preparation. Program organizers hope to reach agreement on all appropriate policy by 2019. Because all of the proposed schemes are run-of-river, environmental-related issues do not include problems associated with large hydroelectric projects that sometimes include securing large catchment areas or relocating residents.

According to the draft, there are a number of canal drops and water falls in the country that would facilitate developing small hydro projects.

“The Mission would aim at technology development and set up 1,000 MW small hydroelectric projects on canal drops, dam outlets and water outfall structures,” said the draft. “The Mission would also help state governments renovate old small hydroelectric projects and improve each project’s capacity and efficiency.”

NMSH would develop a program funded through federal and state governments to develop micro-hydro (up to 100 kW) and watermills in “hilly regions.” This methodology, according to the report, is linked to developing economic activities in remote and rural areas that are not receiving private sector investment.

According to the draft, “There are over 100 small hydroelectric projects owned and operated by state utilities, which if renovated could result in 30-35% more generation using relatively [low amounts of monetary] investments. The plan proposes to cover all these projects in a phased-manner and provide partial financial support to state utilities that undertake rehabilitation and upgrade.

“We would encourage models of partnership within the private sector to rehabilitate and operate these projects.”

The draft said the total hydroelectric power potential in India is about 150,000 MW and, of this amount, MNRE thinks there is the possibility for small hydro to generate an estimated 20,000 MW.

According to the report, two of the most difficult obstacles the NMSH program must overcome are time from development to power production and the location of many schemes. In order to meet goals to maintain and operate projects in remote areas that are difficult to access, NMSH said the government would help develop training for locals.

The NMSH would address this requirement to train local residents and use them as technicians by involving various engineering institutions, the draft said. “Engineering colleges and Industrial Training Institutes in hydro-rich states would be supported to provide courses and training in small hydro domain.”

The report said, in the past four years, most of the projects have come in the states of Himachal Pradesh, Punjab, Karnataka, and Maharashtra. MNRE said it is encouraging all states to participate in the NMSH, but focus would be to be given to Jammu and Kashmir and Uttarakhand in the north; Tamil Nadu and Kerala in the south; the central states of Madhya Pradesh and Chhattisgarh; and Sikkim, Meghalaya and Mizoram in northeastern India.

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