Central Electricity Authority

Presentation

on

“Hydro Power in Development India”

1

2

Indian Power Scenario

Total Installed Capacity : 284303.39.62 MW

Rise and Decline of Hydro Share

• Maximum Share - 50.62% in 1962-63

• Present Share - 15 %

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As on 31.12.2015

Declining Hydro Share

2865, 49%2936,

51% 27029, 63%

14460, 34%

0, 0% 1095, 3%

1,94,199, 70%

42433, 15%

36470, 13%

5780, 2%

Thermal(70%) Hydro(15%)

Res(13%) Nuclear(2%)

1962-63 Vs. 1986–87 Vs. 2014-15

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Reason for Decline of Share of Hydro Power

in Indian Energy Mix

• Share of hydro has declined from about 51% (2936 MW out of a total of 5801

MW) in 1962-63 to about 15% (42433 MW out of a total of 278883 MW) now.

Following factors have contributed to the slow growth/ decline of hydro share:

• Upto 1960s, the major emphasis of the Govt. was on development of multi-

purpose reservoir based hydro projects like Hirakund, Bhakhra, Damodar Valley

projects etc. mainly to have irrigation for better food security which also led to

development of hydro capacity.

• Lack of adequate infrastructure, drying-up of funding by bi-lateral/ multi-lateral

agencies, increasingly stringent environment clearance regime after 1970s due to

world-wide focus on environmental, ecological and R&R issues and activism

against development of hydro projects by NGOs/ Environmental activists.

• Greater emphasis on rapid development of thermal power during 1970s for

quicker capacity addition in view of large scale industrialization.

• In addition, factors like Land acquisition issues, R&R issues, inter-state issues

and non-tie-up/ non-availability of requisite finances on long term basis etc. have

further slowed down the development of hydro power.

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• Renewable, Non-Polluting and Environmental Friendly.Promotes Conservation of Fossil Fuel.

• No fuel cost, remains escalation free and economical inlong run.

• Improves quality of life in remote hilly and backward areasby accruing incidental benefits of electrification,industrialization & road/ rail communication development.

• Ability for instantaneous starting, stopping and loadvariation, thereby ideally suited for peaking operation andimproves reliability of power system.

• Storage projects provide flood control, irrigation, drinkingwater supply, recreation facilities etc and thus help in themaximum utilization of scarce water resources.

• Pumped Storage Hydro schemes besides providingpeaking power also act as Energy storage devices.

• Improves Reliability of Power System, particularly in view ofemphasis on Solar/ Wind power

Hydro Power - Sustainable, Clean and Green Alternative

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Advantages of Hydropower

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• No fossil fuel• Negligible Green House Gas

Emission• No toxic bye-products • Substitutes fossil fuels

Source of

Power

GHG Emissions per

kWh In Gram

Equivalent CO2

Thermal – Coal 957

Thermal – Gas 422

RES – Solar 38

Hydro – Storage 10

RES – Wind 9Nuclear 6

Hydro - RoR 4Source: Hydro Quebec, Canada

Environmental Sustainability• No consumptive use of water

• Provides Drinking water, I&FC

• Increased River Flow in lean seasons

• Basin Study based planning

(15/44 projects dropped in Siang Basin)

• CAT Plan & Compensatory Afforestation

Economic Sustainability• High Tariffs only in initial years

• No geopolitical risks or price rise risk

• Assured source of power

• Cheapest Power in long run

(No Fuel, 150 yrs life (Bhakra–30 ps)

Social Sustainability• Improves living condition, income,

employment & infrastructure

• Adequate R&R package, LADF etc

• Incraesed Agriculture Productivity

(Hirakud & Bhakra Dam – Green

Revolution)

Clean and Green Alternative

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Present Scenario of Hydro Power Development

(Above 25 MW)

Capacity*

(MW)

Identified Hydro-Electric Potential

Total

Above 25 MW

148701

145320

Schemes in Operation 37838

Schemes under Construction 12582

* Excluding Pumped Storage Schemes

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Scenario of Development of Balance Hydro Electric Potential

(Above 25 MW)

Capacity* (MW)

Hydro Potential under process of Development

i) DPRs Concurred by CEA but yet to be taken up

under construction

25678

ii) DPRs under examination in CEA 6989

iii) DPRs returned to project authorities for revision and

other reasons

8496

iv) Under S&I/ DPR under preparation 13421

Total 54584

* Excluding Pumped Storage Schemes

Development of Pumped Storage Schemes (PSS)

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Nos. Capacity

(MW)

Identified Potential 63 96524

In Operation 9 4785.6

Under Construction 2 1080

DPR prepared and submitted to CEA 1 1000

• Development of PSS is dependent on availability of off-peak power and

system’s peaking requirements.

• Hitherto, development of PSS was very slow mainly due to non-

availability of adequate off-peak energy in the system.

• With increasing share of renewables in the system and with targeted

capacity of 100 GW from Solar and 40 GW from Wind by 2022,

tremendous push to the development of PSS is essential to integrate

renewables in the grid and to stabilize the grid.

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Basin-wise Distribution H.E. PotentialTotal: 145320 MW (above 25 MW)

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Basin/ River Probable Installed

Capacity (MW)

Capacity

Developed

Capacity under

Construction (MW)

Total Above

25 MW

MW % MW %

Indus 33832 33028 13573 41.10 3491 10.57

Ganga 20711 20252 5317 26.26 1541 7.61

Central Indian

Rivers 4152 3868 3148 81.37 400 10.34

West-flowing

Rivers 9430 8997 5661 62.92 100 1.11

East-flowing

Rivers 14511 13775 7923 57.52 1290 9.36

Brahmaputra 66065 65400 2216 3.39 5760 8.81

Total 148701 145320 37838 26.04 12582 8.66

Basin Wise Status of Development of Hydro-Electric Potential

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Region-wise Distribution of H.E. Potential

Total: 145320 MW (above 25 MW)

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Region Probable Installed

Capacity (MW)

Capacity

Developed

Capacity under

Construction

Total Above

25 MW

MW % MW %

Northern 53395 52263 18302 35.02 5032 9.63

Western 8928 8131 5552 68.28 400 4.92

Southern 16458 15890 9507 59.83 1390 8.75

Eastern 10949 10680 3235 30.29 2806 26.27

NE Region 58971 58356 1242 2.13 2954 5.06

Total 148701 145320 37838 26.04 12582 8.66

Region-wise Status of Development of H.E. Potential

Sector-Wise Hydro Projects in Operation

* - includes 9 pumped storage schemes (PSS) with installed capacity of

4785.6

15

Sector Nos. I.C. (MW) %

Central 38 14357.72 33.68

State 140 25111.70 58.91

Private 15 3154.00 7.39

Total 193 42623.42 * 100

HYDRO CAPACITY ADDITION PROPOSED DURING 12TH

PLAN

16

Sector Total

(MW)

Commissioned

(MW)

Under

Execution

(MW)

Central

Sector

6004 2424

(40.37%)

3580

(59.63%)

State

Sector

1608 632

(39.30%)

976

(60.70%)

Private

Sector

3285 595

(18.11%)

2690

(81.89%)

Total: 10897 3651

(33.50%)

7246

(66.50%)

Prioritisation of upcoming hydro projects

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CategoryNo. of

Stations

Total Capacity

(MW)Status

Category - I 36 8190

Ongoing projects. Likely

to be completed by 2018-

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Category - II 11 4852Construction started but

stalled

Category- III 35 24025

TEC received but

awaiting other clearances

ISSUES INVOLVED IN SLOW PACE OF HYDRO

DEVELOPMENT AND SUGGESTED SOLUTIONS

a) Land Acquisition Issues

b) Environment and Forest issues

c) Rehabilitation & Resettlement Issues

d) Inadequate Infrastructural facilities

e) Law & Order / Local issues

f) Geological Surprises

g) Natural Calamities

h) Inter-state Issues

i) Cumulative Basin Studies

Land Acquisition

Land acquisition is a persistent issue involved in the

implementation of hydro projects. Acquisition of land for

various locations of the project such as Dam, HRT, Power

House, Switch yard etc. delay the commencement /

progress of works.

Suggested solution:

It is suggested that land required for construction of hydro

projects and for afforestation purpose should be arranged to

be allotted to developer by the respective state authorities

and cost recovered later on, from the developer.

Issue:

Due to the considerable time taken in the process of Environment

and Forest Clearances, commencement of construction works of

Hydro projects often gets delayed.

Suggested solution:

• It is desirable that all the clearances relating to Environment &

Forest, Wildlife etc. should be given in time bound manner.

• The e-flows may be prescribed for hydro projects considering case

to case basis and in a judicious manner.

• The e-flows, once prescribed should not be revisited for a project.

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Environment and Forest issues

Issue:

Dislocation of the people from their houses/ workplaces

etc. and their resettlement is a sensitive issue and

involves a lot of time and money. Many times this issue

leads to court cases resulting in delay in project

execution/completion.

Suggested solution:

Implementation of R&R Plan in close co-ordination with

the State Authorities may mitigate the issues.

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Rehabilitation & Resettlement

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Issue:

Hydro projects are normally located in difficult terrain

having poor accessibility. As such, substantial time is

lost due to lack of adequate Infrastructural facilities

at the project site allotted to a developer by the

State Govt.

Suggested solution:

State Govts need to develop adequate infrastructure

facilities matching with the development of hydro

projects to reduce the gestation period of the hydro

projects.

Inadequate Infrastructural facilities

Issue:

Protests by the local people against the construction

activities like blasting, muck disposal etc. and demands for

employment, extra compensation etc. often create law and

order problems which delays the commencement and

affects progress of the works.

Suggested solution:

Implementation of various Corporate Social Responsibility

Plans and proper co-ordination with local bodies & State

Authorities can minimize the issues.

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Law & Order / Local issues

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Issue:

A large number of HE projects has been delayed due to

geological surprises.

Suggested solution:

With the use of latest technologies in Survey & Investigation

and preparation of Bankable DPR, the geological surprises

could be reduced to some extent.

Geological Surprises

Issue:

Natural calamities like unprecedented rain / flash floods,

cloud burst, earthquake etc delay the completion of

project.

Suggested solution:

Efficient preparedness and Disaster Management Plan

should be in place to tackle Natural Calamaties.

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Natural Calamities

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Issue:

Sometimes Hydro electric projects get delayed due to inter-

state disputes between the states.

Suggested solution:

Concerned State Governments have to play active role to

resolve the inter-state matters for hydro development in

their states.

Inter-state Issues

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Issue:

The impact of recommendations of Cumulative Basin

studies of different basins result in change in parameters

such as FRL, Head and Annual Energy Generation etc. of

hydro projects necessitating formulation of new DPR.

Suggested solution:

Hydro Projects which have already got concurrence from

CEA should not be revisited since it would impact the

economies of the project and make them unviable.

Cumulative Basin Studies

1. National Electricity Policy

2. Hydro Power Policy- 2008

3. National Rehabilitation & Resettlement Policy, 2007

4. Right to Fair Compensation And Transparency In Land

Acquisition, Rehabilitation And Resettlement Act, 2013

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POLICY INITIATIVES TAKEN FOR INCREASING THE

HYDRO CAPACITY

• Emphasis on full development of the feasible hydro

potential in the country which will facilitate economic

development of hydro-rich States like North Eastern

States, Uttarakhand, Himachal Pradesh and Jammu &

Kashmir.

• Debt financing of longer tenure has been recommended.

• State Governments advised to review procedure for land

acquisition and other approvals / clearances for speedy

implementation of hydro projects.

• Full support of Central Government has been extended

for hydel development by offering the services of CPSUs

like NHPC, NEEPCO, SJVNL, THDC etc.

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National Electricity Policy

Hydro Power Policy- 2008: Salient Features

(including subsequent changes)

• Transparent selection criteria for awarding sites to private

developers.

• Enables developer to recover his additional costs through

merchant sale of upto a maximum of 40% of the saleable

energy. 5% reduction for a delay of every six months. –

Balance long term PPAs

• Cost plus Tariff regime has been extended to public as

well as private sector hydro power projects up to

December 2015 (in which tariff is to be determined by the

regulator under section 62 of Electricity Act, 2003) .

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• For 10 years from the COD, developer to provide 100

units of electricity per month to each PAF - in cash or

kind or a combination of both.

• Project developer assists in implementing rural

electrification in the vicinity of the project area and

contributes the 10% share of the State Govt. under the

RGGVY scheme.

• Additional 1% free power from the project for a Local

Area Development Fund with matching 1% by the

State Governments from their share of 12% free

power.

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Hydro Power Policy- 2008: Salient Features

(including subsequent changes)

3232

Features of Existing Tariff Policy for Hydro Projects

• Hydro exempted from competitive bidding

• Option of getting the tariff determined by App. Commission

– If minimum 60% is tied up in long term PPA; balance open for merchant sale

• Expenditure incurred or committed to be incurred by the project developer for getting project site allotted (except free power up to 13%)

– Neither to be included in the project cost,

– nor any such expenditure to be passed through tariff.

• Provision stipulating time period for commissioning of HEP

National Rehabilitation & Resettlement Policy 2007

National Rehabilitation & Resettlement Policy 2007 addresses the

need to provide succor to the asset less rural poor, support the

rehabilitation efforts of the resource poor sections, namely small and

marginal farmers, SCs/STs and women who have been displaced.

Besides, it seeks to provide a broad canvas for an effective dialogue

between the Project Affected Families and the Administration for

Resettlement & Rehabilitation to enable timely completion of project with a

sense of definiteness as regards costs and adequate attention to the

needs of the displaced persons. The rehabilitation grants and other

monetary benefits proposed in the Policy are minimum and applicable to

all project affected families.

States where R&R package are higher than proposed in the Policy

are free to adopt their own package. The objectives of the Policy are to

minimize displacement, to plan the R&R of PAFs including special needs

of Tribals and vulnerable sections, to provide better standard of living to

PAFs and to facilitate harmonious relationship between the Requiring

Body and PAFs through mutual cooperation. 33

Right to Fair Compensation and Transparency in Land

Acquisition, Rehabilitation and Resettlement Act, 2013

Main objectives :

• Ensure a humane, participative, informed and transparent

process for land acquisition with the least disturbance to the

owners of the land and other affected families

• Provide just and fair compensation to the affected families

whose land has been acquired or proposed to be acquired or

are affected by such acquisition

• Make adequate provisions for such affected persons for their

rehabilitation and resettlement

• Ensure that affected persons become partners in development

leading to an improvement in their post acquisition social and

economic status.

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• A Power Project Monitoring Panel (PPMP) has been set

up by the Ministry of Power to independently follow up

and monitor the progress of the hydro projects.

• Regular review meetings are taken by Ministry of Power/

CEA with equipment manufacturers, State Utilities/

CPSUs/ Project developers, etc. to sort out the critical

issues.

• Review meetings are taken by MoP/ CEA with Border

Road Organization, Ministry of Road Transport and

Highways etc. to sort out the infrastructure issues.

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OTHER MEASURES TAKEN FOR INCREASING THE

HYDRO CAPACITY

• A Consultation Process has been evolved for Fast Tracking

of S&I activities and preparation of Quality DPRs wherein

appraising agencies advise Developer in carrying out

various investigations and firming up the project layout etc.

• Time bound appraisal norms have been evolved in CEA for

examination of DPRs.

• A number of projects have been prioritized which are being

monitored regularly at highest levels by the Govt. of India for

their expeditious implementation.

• Central Electricity Authority (CEA) is monitoring the progress

of each project regularly through frequent site visits,

interaction with the developers and critical study of monthly

progress reports.36

OTHER MEASURES TAKEN FOR INCREASING THE

HYDRO CAPACITY

Need for Hydropower Development

Balancing Requirement for Renewable Growth

37

India’s Intended NationallyDetermined Contribution (INDC)

•To reduce the emissions intensity ofits GDP by 33 to 35% by 2030 from2005 level

•To achieve about 40% cumulativeelectric power installed capacity fromnon-fossil fuel based energyresources by 2030

•To create additional Carbon Sink of2.5-3 billion tonnes of CO2 equivalent

Projected Energy Mix by 2030

Source Capacity (GW)

Solar 150

Wind 85

Thermal 479

Gas 25

Hydro 75

Nuclear 15

Biomass 12

Waste 2

Total 843

3838

Other Emerging Issues and Challenges

• Increasing Tariff especially in initial years

(Refusal to sign PPAs for new hydroprojects)

• Non-implementation of Differential Tariff for Peak and Off-peak power

in Regulations

• Huge Impact on Tariff due to Water Cess (By J&K and now

Uttarakhand)

• (Impact different in various projects (Increase of tariff in Salal is over

100%)

• Impact of Enabling/ Infrastructure Cost on Tariff (approx. 20% of

project cost)

• Land Acquisition being treated as Controllable Parameter in the

Regulations

• Lack of long-term financing instruments

• Uniform Rate of Return on Equity for all types of generating stations

WAY FORWARD

• Environment & Forest clearances should be accorded expeditiously

in a time bound manner and the projects having necessary

clearances from CEA & MoEF should be allowed to take off.

• Project wise specific e-flows need to be prescribed based on

cumulative basin study. E-flow norms should not be revised

retrospectively as it might render the Project unviable.

• Free-flow stretch requirement may be relaxed by MOEF depending

upon slope of the river at the Project site.

• Need to give boost to the development of Pumped Storage Schemes

in view of likely availability of large intermittent and variant energy in

the system.

• Implementation of Differential Tariff for Peak and Off-peak power

• Fiscal Incentives and Concessional Funding to reduce the project

cost and the Tariff

39

4040

WAY FORWARD

• To facilitate faster growth of hydro power development, all

hydro projects irrespective of their size and type could covered

under REC regime, presently applicable to HEPs below 25

MW only.

• Incentivizing all Hydropower projects by extending all

applicable support/ subsidy/ benefits applicable to projects

below 25 MW capacity.

• Exempting Hydropower projects from RPO

• Innovative Financing instruments with flexible options :

Front-loading, Back loading, EQI/ EMI, Ballooning, longer

repayment period etc.

• Withdrawal of free power to State Govts. which charge Water

Cess

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