[INDIA] Small hydro power projects trip

The 5,200 sites identified for the development of small hydro power (SHP) projects have failed to attract private investments due to state bureaucracy and infrastructure bottleneck. The government has been able to implement less than 12% projects so far. Out of total 618 SHP projects being set up, only 143 plants are developed through private investments.

According to experts, delay in getting clearance from respective state government, forest and other departments is posing a serious threat to investments in SHP projects. While the state governments are responsible for allotment of sites for SHP projects, the procedure is too long in most states and needs to be streamlined. SHP developers have to take several clearances related to land, environment, forest and irrigation before starting their project.

In a concerted bid to charge that scenario, the MNRE is currently in talks with several state governments to develop agreements, drafts regulatory tariffs and other modalities in order to speed up the clearance process required for setting up SHP plants. “That exercise is expected to address industry worries over the government merely identifying sites, instead of also providing adequate data on priority regarding the location, available resources and tariffs,” an official said.

“Although states claim that there is a single window clearance system and a nodal agency is expected to co-ordinate the clearances developers, by and large, have to move to different departments for clearances,” he said.

Developers also face lack of clarity in tariff—which is decided by the state electricity regulatory commission—due to which they are often unable to work out the economic viability of their projects before starting them.

“Large number of sites have been identified in states like Andhra Pradesh, Arunachal Pradesh, Himachal Pradesh, Jammu and Kashmir and Uttrakhand. However, there is lack of resources and required infrastructure to develop such projects,” Indian Renewable Energy Development Agency (IREDA) chairman & managing director Debashish Majumdar said.

According to Mr Majumdar, even if some investors set up their plants against all odds, they are quite likely to face big losses since state governments even fail to provide transmission lines to evacuate the generated power.

“SHP projects are very tricky as they are site-specific. The government should not just identify sites but adequate data regarding the location, available resources and tariffs needs to exist,” PricewaterhouseCoopers executive director (energy & utilities) Shubhranshu Patnaik said.

“Many sites have already been allotted to private developers but the progress for installation is not up to the desired level for various reasons. The government is now planning to look into these factors and give momentum to promote and facilitate small players in this sector,” a government official said.

Small hydro-power projects generating up to 25 mw power are categorised as renewable sources of energy. The country has an estimated potential of about 15,000 mw power generation through small hydro-power projects, but the cumulative power generation from these projects have been only 2,045.61 mw.

Source: India Economic Times

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