India has a rich and economically exploitable hydropower potential. In addition to generating low carbon energy, hydropower has the potential to complement the integration of more intermittent sources of renewable energy such as wind and solar power by providing effective means of energy storage. Hydropower is also lauded for its capacity to manage the stability of the electricity grid system in times of erratic demand and supply. At present, the hydropower sector contributes 12.1 per cent of the total electricity generation in India. As of June 2021, India’s cumulative hydropower generating capacity stood at 46.32 GW. By 2022, another 6.82 GW of hydropower is expected to be added to the portfolio.
As per the Ministry of New and Renewable Energy (MNRE), India’s hydropower capacity is targeted to reach 70 GW by 2030. However, current growth trends may not be sufficient to meet India’s climate targets. During the COP26 global climate change summit held at Glasgow in November 2021, the Indian Prime Minister, Narendra Modi stated that India will achieve net-zero emissions by 2070. India has also committed to meeting 50 per cent of its energy requirements through renewable energy by 2030. To achieve these targets, hydropower will need a greater push from the government and developers.
However, new projects often entail lengthy permission processes and high costs from environmental assessments. This is exacerbated by frequent opposition from local communities. Such hurdles need to be addressed by policymakers to ensure that the competitiveness and economic viability of hydro projects is maintained. The International Energy Agency has termed hydropower as “the forgotten giant of clean electricity” and stated the need to ramp up hydro projects to meet clean energy targets and climate commitments of countries including India.
Renewable Watch reviews the key developments, challenges and future outlook for the hydropower segment…
Recent developments
The central and state governments have undertaken various measures to promote the hydropower sector in India. These measures include hydropower purchase obligations, the declaration of large hydropower projects as renewable energy source and tariff rationalisation. Recently, the power ministry issued guidelines for budgetary support for flood moderation and to create enabling infrastructure such as roads and bridges, with regard to hydropower projects. The budgetary support for these components is expected to reduce the tariff levels of these projects and ensure that consumers are charged only the cost of the power components.
Recently, the Central Electricity Authority gave its nod to Nepal for trading on the Indian Energy Exchange (IEX). In the first phase, Nepal is expected to sell 39 MW of electricity produced from its 24 MW Trishuli hydropower project and the 15 MW devighat hydropower project on the IEX. Trading of power produced from the 456 MW Upper Tamakoshi, 69 MW Marsyangdi and 45 MW Upper Bhotekoshi powerhouse is also expected to receive approval soon.
Several MoUs were signed this year for the implementation of mega hydropower projects in Jammu & Kashmir, in a bid to make the union territories a power-surplus region in the country. In January 2021, the government cleared eight hydropower projects of 144 MW capacity on the Indus river and its tributaries in Ladakh, being the highest so far. At present, there are numerous small projects situated on the Indus in Ladakh, with a cumulative capacity of 113 MW. Due to its topography, constructing big hydropower projects in the Ladakh region is unfavourable. As a result, the government is largely focusing on the development of small hydropower projects in the region. The upcoming projects are expected to generate greater capacity as compared to the existing ones. These projects will primarily be constructed in Kargil and Leh districts of Ladakh. The 19 MW Durbuk Shyok, 18.5 MW Shankoo, 24 MW Nimu Chilling, 12 MW Rongdo and 10.5 MW Ratan Nag hydropower projects were cleared for Leh. For Kargil, the 19 MW Mangdum Sangr, 25 MW Kargil Hunderman and 12 MW Tamasha have been cleared. The diversion of the Marusudar river for the Pakal Dul hydroelectric project in Kishtwar district of Jammu & Kashmir was also commissioned recently. The diversion entails an investment of Rs 82 billion and is anticipated to provide direct and indirect employment opportunities to the local population.
State-run NTPC Limited and NHPC Limited, in August 2021, signed an MoU for exploring the development of hydropower projects and any other mutually beneficial business opportunity in the power sector overseas. The broad areas of cooperation include collaboration for conducting feasibility studies for new hydropower projects and related infrastructure, development of hydropower projects abroad, subject to techno-commercial feasibility, and knowledge sharing. Feasibility studies and sharing of information from overseas experience are expected to be beneficial for hydropower development in India as well. NHPC Limited also signed a pact with the Bihar State Hydroelectric Power Corporation to implement the 130.1 MW Dagmara hydroelectric project in Bihar. Public sector entity, Satluj Jal Vidyut Nigam Limited was also allotted three projects aggregating 501 MW. These projects are the 104 MW Tandi, 130 MW Rashil and 267 MW Sach Khas hydroelectric projects, located in the Chenab river basin in Himachal Pradesh’s Chamba district.
In another development, the Cochin International Airport commissioned a hydropower station with an investment outlay of Rs 520 million. The 4.5 MW hydropower plant, located at Arippara near Kozhikode, has an annual power generation capacity of 14 MUs. The Kerala State Electricity Board grid will receive power from this plant. The small hydropower project was awarded to Cochin airport as part of the Kerala government’s small hydropower policy on a build-own-operate-transfer basis for a lease period of 30 years.
Small hydropower
Hydropower projects of capacity up to 25 MW are characterised as small hydropower projects and fall under the ambit of the MNRE. The estimated potential of small, mini and micro hydel projects in India is 21.13 GW, spanning over 7,100 sites located in various states of the country. Small hydropower projects are targeted to achieve 5 GW capacity by 2022, under India’s national target of achieving 175 GW of cumulative renewable energy of capacity by the year 2022. However, the development of small hydropower projects in India in financial year 2020-21 has been rather sluggish. A target of commissioning 100 MW was set for the year 2020-21, against which six new projects were installed during the year with a total generation capacity of 67.29 MW as on December 31, 2020. This has brought the total number of installed small-hydro projects to 1,134, with an overall capacity of 4.75 GW.
An estimated 96 projects are currently under implementation, with the majority being carried out in states such as Uttarakhand, Himachal Pradesh, Arunachal Pradesh, Ladakh and Maharashtra. Under the Ladakh Renewable Energy Initiative, a 500 kW mini hydel project (MHP), the Turtuk MHP, in Turtuk village in Leh, was commissioned by the Ladakh Renewable Energy Development Agency. Additionally, two mini hydropower projects in Kargil district were also completed by the Kargil Renewable Energy Development Agency and are ready for commissioning. These are Matayeen and Khandi MHPs, with a capacity of 550 kW and 1,000 kW respectively.
Small hydropower projects are canal-based or run-of-the-river projects that utilise running water to drive the turbine. They are being set up by both state entities as well as private players. Setting up such projects usually takes about three to four years depending on their size and location. Such projects are claimed to circumvent problems associated with large hydropower projects such as deforestation, building of dams and the subsequent displacement caused in the process. They also have the potential to benefit remote and isolated areas in a decentralised manner by providing a relatively safer supply of energy as well as local employment opportunities. In addition to reducing emissions as compared to fossil fuels, small hydropower plants also have a long lifespan, with limited impact on generation costs over their lifetime. Thus, they may be beneficial to the overall socio-economic development of a remote region. For such reasons, scientists and environmentalists have reiterated the need to shift from large hydropower to small hydropower projects in the future.
Conflicts and challenges
While hydropower remains an attractive source of clean energy, its development and management entail several challenges and risks, often inducing conflicts and agitation by the local populace. Damming of rivers and intensive road building, especially in mountainous regions, when done unscientifically, poses an immense risk of disasters and destruction. In February 2021, for instance, a glacier burst in the state of Uttarakhand, severely damaging two hydropower projects under construction in the Chamoli region, leading to loss of property and lives. The destruction caused is not only pertinent to external surroundings but also the hydropower infrastructure itself, imposing greater costs to developers.
The frequency of such incidences has risen over the past few years due to increased extreme weather events. This is also partly attributable to the impact of climate change on precipitation patterns, stimulating erratic rainfall in fragile mountain regions. As per the Geological Survey of India, roughly 97.42 per cent of the area in Himachal Pradesh is prone to landslide hazards. A 2020 study by the Institute of Earth and Environmental Science in Germany also states that one-fourth of all hydropower projects in the Himalayas are located in landslide-prone areas. Due to such risks, several protests have occurred against the construction of hydropower projects over the past few years. A recent example is the joint movement of 22 organisations against the mega 2 GW Subansiri Lower hydroelectric project being set up by NHPC, along the Arunachal Pradesh-Assam border in September 2021. The project, located at Gerukamukh, started in 2006 but witnessed agitations fearing ecological damage and loss of livelihood in 2011, after which it was halted. The project began again in the year 2020. Several such agitations have also occurred in Himachal Pradesh and Uttarakhand. Thus, a careful and scientific assessment of project sites may be fundamental to building local confidence and improving efficiency in project completion.
Hydropower is capital intensive in nature. The rising risk of disasters, along with resettlement and rehabilitation requirements, leads to poor investor confidence in the segment. Other issues include a long gestation period and high tariffs. Additionally, the hydropower fleet in India, as well as globally, is ageing. The modernisation of hydropower infrastructure may become inevitable to ensure that future capacity and efficiency in generation remains unaffected. Many distribution companies also receive no takers for surplus power, leading to increased costs and losses. In Himachal Pradesh, for instance, the generation in roughly 70 state-owned large hydropower projects is between 50 MUs and 55 MUs per day. The overall demand in the state, however, is merely 30 MUs per day. The surplus power is supplied to nearby states such as Delhi and Punjab, among others. The per unit tariff to these states is known to be quite low, ranging from Rs 2.50 to Rs 5 per day. Low rates force distribution companies to resort to power cuts to cover up their costs.
Over the past decade, there has been increasing evidence questioning the essential “green” nature of large hydropower projects due to the way hydropower development in the Himalayan regions has drastically altered the ecosystems. Construction of large dams has affected riverine biodiversity due to the fragmentation of rivers, in addition to the seepage of industrial wastes into waterbodies. By releasing minimal water downstream, such projects have also disrupted fish migration, severely affecting the health of the aquatic ecosystem. Consequently, the quality of water has degraded significantly in certain regions due to loss of free-flowing water. Large-scale projects also impose greater risk of submergence for low-lying villages, which may cause widespread displacement of people. Furthermore, lack of water in the downstream affects agricultural activities due to limitations imposed on irrigation. The implementation of compensatory afforestation policies is also questioned to be detrimental due to excessive physical interference with natural ecosystems. Randomised and unscientific plantation of trees may have long-term consequences on the ecological health of the region, which at present remain unclear.
Future outlook
In the backdrop of India’s ambitious emission targets and the recent net zero commitment by 2070, hydropower is likely to be an active segment in India’s renewable energy portfolio. If developed sustainably, hydropower can not only maintain its competitiveness but also simultaneously complement solar and wind energy as a reliable source of energy storage. The competitiveness will depend on the level of mitigation of the financial, environmental and social risks involved in hydropower generation.
Measures to maintain the sustainability of hydropower and minimise risks will play a crucial role in determining the future of hydropower in India. Financial incentives, along with policy and regulatory support from the central and state governments, need to be developed and revised regularly to boost investor confidence in the segment. Long-term debt instruments spanning the lifetime of hydropower projects may also be promoted in the capital markets.
Environmental considerations may play the most significant role in mitigating risks and ensuring the longevity of hydropower projects in the coming years. To start with, incorporating changes in the planning and development process of new hydropower projects will be crucial. Environmental impact assessments of hydropower projects may be undertaken to identify potential risks and outline preventive measures for long-term sustainability. Early warning systems may be strategically positioned to initiate timely response in order to prevent damage and destruction due to natural hazards. Investment in modernisation and digitalisation of plants, along with refurbishment of major equipment such as turbines and generators may significantly improve plant flexibility, leading to enhanced safety. To address social concerns, policies that lay down well-defined parameters for benefit sharing, rehabilitation and access to resources must be established. Further, institutions governing such policies must be strengthened to promote greater harmony between developers and the local population. An integrated stakeholder approach in the planning stage may be adopted to prevent halts and backlash against projects in the future.
Hydropower also provides a medium for India to collaborate with its neighbouring countries for regional energy trade. India has already taken a step forward by allowing Nepal to trade on the IEX. This may be one of the most cost-effective ways to address energy scarcity and meet the growing demand. Cooperation may also enhance reliability of power due to diversification of power sources as well as distribution of risks. Furthermore, improved regional cooperation can enhance the overall socio-economic development in the region through improved connectivity and energy supply. This is, however, contingent on national policies and the geopolitical environment among the countries. Moreover, the Covid-19 pandemic has demonstrated the significant role that hydropower can play with respect to pumped storage. Pumped storage hydropower can address several issues faced by grid operators through better load management during periods of fluctuating demand. Therefore, a reviving impetus to hydropower can be expected, with a special focus on pumped hydro storage in the coming years.
