India’s power woes: are small hydro projects the beginning of a solution?
Baijnath hydel project, HP
Shimla: according to reports, with over 500 small hydro projects having been given the go ahead, Himachal Pradesh is leading the mini hydel race in the country. The state’s power policy provides special incentives for projects of up to 5 MW. Early birds like Himalayan Power Crest, a special purpose vehicle of Delhi-based textile company Spentex, have already commissioned three projects; three-more projects of 12 MW are due.
With its showpiece thermal plants running short of capacity – as much as 37,000 MW of installed capacity is lying idle for want of coal and natural gas – and grandiose plans for a nuclear-powered future stuck, India is reeling under a power crisis. Recently, the warning shot came from Lucknow – the UP government issued an “advisory” to shops and malls in the National Capital Region to down shutters by 7 pm.
But what the governments are waking up to now, entrepreneurs have been anticipating for a while. Many have been working on their Plan B, beyond inverters and generators. The answer is small hydel plants that can be set up anywhere across the rivers of Punjab, Himachal Pradesh and Uttarakhand. Crank up power for your own plants along the banks or push it onto the main grid to pocket the cash.
A company can take on up to three small hydro projects at a time in the hill state. The condition opens up power generation market for new entrepreneurs but deters monopoly of moneybags like Reliance Power or JP Group. “The stipulation was brought in the power policy after major players sat on projects. It ensures timely completion,” says Harsh Mitter, chief executive officer of Himurja, the state-run nodal agency for small hydro projects.
A major infrastructure company with a finger in this pie is Hyderabad-based Lanco Infratech. The company commissioned two small hydro projects of 5 MW in the state. It has set up a 70 MW project in Himachal Pradesh and is constructing a 500 MW project in Sikkim.
It’s a win-win situation for states as small projects bypass issues like deforestation, submergence or rehabilitation. States offer incentives like nominal upfront payment at the time of allotment and low rates of royalty for such projects. The centre’s Renewable Energy Certificate scheme for small hydro power projects is a major driver for new investors as it supplements per unit cost by more than 30%.
Despite the favourable power market, procedural bottlenecks have hampered speedy growth of small hydro projects. But with no conventional solution in sight for India’s power crisis, small, eco-friendly solutions like mini hydel projects could offer a leg-up to the quest for assured power.
[courtesy: The Economic Times]