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Six signs that India’s hydropower sector is moving forward

On 5–6 August, hydropower stakeholders congregated at the National Conference on Hydropower in India, organised by the Federation of Indian Chambers of Commerce and Industry (FICCI).

Piyush GoyalThe event discussed how hydropower development can be revived in the country after several years of stagnation. In the wake of invigorated private sector activity and a new government in place showing commitment towards growth in the sector, the mood was very much optimistic.

Richard Taylor, chief executive of the International Hydropower Association, attended the event. He said: “We came away with a strong sense that India’s hydropower sector is making significant progress, and we look forward to growing our collaboration with our members and partners in the country as new projects come to fruition in the coming months.”

Here are just a few of the indicators of India’s hydropower progress.

1.    More efficient governance

The responsibility for hydropower in India’s government has been brought under the leadership of a single minister to improve efficiency and allow for the faster execution of projects. Responsibility was previously split between two ministries: projects of more than 25 MW came under the purview of the ministry of power, while projects up to 25 MW came under the ministry of new and renewable energy.

This approach often proved problematic in resolving issues with power projects in central government level, as concerned departments were working in silos. For more efficient co-ordination between departments dealing with power sector issues, one minister has been appointed to head a single ministry in India’s new government, which merges the ministry of power, the ministry of new and renewable energy and the ministry of coal.

The newly appointed minister is Piyush Goyal, an investment banker who has served on the board of the Bank of India and advised a number of leading companies on management strategy. During his inauguration in May 2014, Mr Goyal said that his priority would be “to light up every house in the country by 2019".

2.    Financial commitment

The new ministry has given a swift indication of its commitment to hydropower, as it revealed plans to establish a dedicated fund to provide long-term finances to hydropower developers.

The plans are in line with the government of India’s promise to offer long-term finance to infrastructure projects, and to meet the country’s target of generating 15 per cent of its energy from renewable sources by 2020.

Mr Goyal affirmed that while the government is committed to providing financial and administrative assistance for hydropower, the economic viability of projects will be determined by investors and developers.

FICCI participants3.    New projects in the pipeline

A recent report by FICCI and PricewaterhouseCoopers has revealed that India is likely to add 13 GW of installed hydropower capacity in the near future.

Much of the new development will be focused in the north east of the country, where 93 per cent of the potential capacity has not been developed. This contrasts the southern and western regions, where nearly two thirds of capacity has been harnessed. You can find a full list of approved hydroelectric projects currently under construction in the north-east region here.

Since being elected as India’s new prime minister, Narendra Modi has inaugurated three new projects in Jammu and Kashmir: Uri-II (240 MW), Chutak (44 MW) and Nimoo Bazgo (45 MW). Mr Modi dedicated these projects to the nation in July and August 2014, strengthening the electricity supply of the region.

4.    New players

On July 28, a week before the National Conference on Hydropower, Reliance Power announced that it will buy three hydroelectric plants to cut its dependence on coal. The deal will make Reliance the country’s largest private provider of hydroelectric power.

Reliance has signed a memorandum of understanding with Jaiprakash Power Ventures to buy the three plants, which will together provide nearly 1,800 MW.

This news continues a trend of activity in the sector. Jindal Power Limited, which is one of India’s leading power generation companies and has a portfolio of 12,000 MW in various stages of operation, implementation, development and planning in the thermal, hydro and renewable energy sectors, is currently developing  four hydropower projects in India’s north-eastern state of Arunachal Pradesh.

These projects are Etalin (3,097 MW), Kamala (1,800 MW), Attunli (680 MW) and Anonpani (22 MW). When complete, the Etalin project will be India’s largest hydropower plant.

5.    Improving sustainability practices

In June 2014 we announced a partnership between the International Hydropower Association and Jindal Power Limited to promote sustainable practices in the development of the Etalin project.

The partnership – which is the first of its kind in India – focuses on the application of the Hydropower Sustainability Assessment Protocol, a tool developed in collaboration between governments, civil society, hydropower industry and the finance sector to assess projects against a comprehensive range of social, environmental and economic considerations.

Mr Jayant Shriniwas Kawale, Jindal Power's managing director for hydro and renewables, emphasised the importance of working closely with project-affected communities: “If you take a bottom-up approach and involve the community in the development of the project right from the beginning, you can build a consensus.”

6.    Collaboration with Nepal

Earlier in August 2014, Prime Minister Modi travelled to Kathmandu, Nepal for a visit which promised intensified collaboration in the coming months and years. It was the first visit by an Indian prime minister to Nepal since 1997, although a power exchange agreement has been in place since 1971 between the two countries.

It was the first visit by an Indian prime minister to Nepal since 1997"

During the visit, Mr Modi and Nepalese prime minister Sushil Koirala signed a memorandum of understanding to move forward work on the 5,600 MW Pancheshwar Multipurpose Project on the Mahakali river, which borders both countries.

The project has been delayed for nearly two decades due to difficulties in reaching agreement on its terms of reference. Following the new agreement, work is expected to start within a year on the project.

During his visit, Mr Modi also emphasised that India is looking to extend financial assistance for the development of HVDC 220KV and 440 KV transmission lines, which are expected to be completed by December 2016.

 

A publication entitled Hydropower in India: Key enablers for a better tomorrow, published by FICCI and PricewaterhouseCoopers, was launched at the event. It explores hydopower's critical role in sustainable development and economic growth, the evolution of the sector, current issues and challenges, and a roadmap for responsible development. The publication is available here.

Are you interested in what’s happening in the hydropower sector in India and would like to know more? Please get in touch.