In a recent interview with Renewable Watch, Rajendra Prasad Goyal, Chairman and Managing Director, NHPC Limited, spoke about the performance of the hydropower segment, the company’s key operational and financial highlights, its upcoming projects, future plans and targets, as well as the top priorities going forward. Edited excerpts…
What is your assessment of the hydropower segment’s performance in the past year or so?
According to the National Electricity Plan (NEP) 2023, India’s total hydroelectric potential, in terms of installed capacity, is 148,701 MW. As of March 31, 2024, hydroelectric projects with an installed capacity of 46,928.17 MW are operational, and projects with a capacity of 16,737 MW are under construction.
During financial year 2023-24, hydroelectric power stations in India generated 133.97 BUs, as compared to 162.5 BUs in FY 2022-23. During this period, NHPC Limited contributed 21.78 BUs from its operating hydropower stations. As of April 30, 2024, hydropower accounted for approximately 11 per cent of India’s total power installed capacity.
What are the steps needed to accelerate the segment’s growth?
To accelerate the growth of the hydropower sector, the following key issues must be addressed:
Review of free power to state governments: The requirement for hydro projects to provide free power to state governments is undermining their financial viability. A comprehensive review of this policy is needed to ensure that it does not negatively impact the economic feasibility of these projects.
Grid/transmission line charges: Hydropower projects, as renewable energy sources, should benefit from zero transmission charges, similar to those offered to solar and wind projects. This will enhance the competitiveness of hydroelectric power.
Legal safeguards post-clearance: Developers often face legal challenges and National Green Tribunal issues even after receiving government clearance. For example, the construction of the Subansiri Lower Project was halted for seven years due to litigation. There needs to be a robust mechanism to protect developers from such post-clearance legal obstacles.
Review of water cess charges: Considering the non-consumptive use of water in hydroelectric projects, the water cess charges imposed by state governments should be looked into.
Support for pumped storage projects (PSPs): PSPs are essential for grid stability and energy storage. The government should classify PSPs as critical grid elements and provide funding through grid charges to facilitate their development and integration into the power grid.
What have been NHPC Limited’s key business and growth highlights in the past one year?
In FY 2023-24, NHPC Limited achieved several key business and growth milestones. The company generated 21,779 MUs from its power stations. The capacity index/plant availability factor stood at 77.6 per cent during this period, demonstrating consistent operational performance. NHPC’s revenue from operations reached Rs 84.05 billion (on a standalone basis). The profit after tax for the year was Rs 37.44 billion (on a standalone basis). Additionally, the company paid a dividend of Rs 18.58 billion to its shareholders, underscoring its commitment to shareholder returns. The net worth of NHPC for FY 2023-24 was Rs 372.69 billion.
What is the targeted capacity addition by NHPC in the next two to three years? What will be the projected share of hydro, renewables and thermal projects in the company’s future fuel mix?
By 2026-27, NHPC aims to increase its total installed capacity to 14,561.20 MW by adding 7,417 MW from hydro and solar power projects, including those developed through joint ventures and subsidiaries. This includes 5,394 MW from hydro projects through the commissioning of the 800 MW Parbati-II Hydroelectric Project (HEP) in Himachal Pradesh, the 2,000 MW Subansiri Lower HEP in Arunachal Pradesh, the 120 MW Rangit-IV HEP in Sikkim, and the 1,000 MW Pakal Dul, the 624 MW Kiru and the 850 MW Ratle HEPs in Jammu & Kashmir (J&K). Additionally, 2,023 MW will come from solar power projects through the commissioning of a 600 MW solar power project (SPP) in Khavda, Gujarat; a 300 MW SPP in Bikaner, Rajasthan; a 100 MW SPP in Kunta, Andhra Pradesh; a 200 MW SPP inside Gujarat State Electricity Corporation Limited’s (GSECL) Renewable Energy (RE) Park (Stage I) in Khavda, Gujarat; a 200 MW SPP inside GSECL RE Park (Stage III) in Khavda, Gujarat; a 50 MW floating solar project in West Kallada, Kerala; a 40 MW Ganjam SPP and a 300 MW floating solar project in the Rengali reservoir in Odisha; a 45 MW SPP in Madhogarh, Uttar Pradesh; a 100 MW SPP in Mirzapur, Uttar Pradesh; and an 88 MW floating solar power project by NHDC in Madhya Pradesh.
What are some of the significant projects currently under execution? How are these progressing?
At present, NHPC has 14 projects under active construction, with a total installed capacity of 10,442 MW. These projects include the 2,880 MW Dibang Multipurpose Project in Arunachal Pradesh, which is India’s largest hydroelectric project; the 2,000 MW Subansiri Lower HEP in Arunachal Pradesh and Assam; the 800 MW Parbati-II in Himachal Pradesh; the 500 MW Teesta VI and the 120 MW Rangit IV HEPs in Sikkim; and four HEPs in J&K totalling 3,014 MW.
Additionally, NHPC is developing renewable energy projects, with five projects currently under construction totalling 1,128 MW. These projects are spread across various states, including Rajasthan, Gujarat, Andhra Pradesh, Madhya Pradesh and Odisha.
The progress on these projects is quite satisfactory. We expect to commission the Parbati-II project in December 2024. The Rangit IV and Teesta VI projects in Sikkim are scheduled for commissioning in May 2025 and December 2027, respectively. The four projects in J&K are expected to be commissioned between September 2026 and December 2027. The coming years are poised to be significant growth years for NHPC.
What are some of the new opportunities being pursued by the company?
To expand its international presence, NHPC has signed two MoUs with Nepal. The first MoU, signed with the Investment Board Nepal in August 2022, involves developing the 750 MW West Seti and the 450 MW Seti River (SR6) HEPs. The second MoU, signed with Vidhyut Utpadan Company Limited in May 2023, focuses on the development of the 480 MW Phukot Karnali HEP.
In line with the shift towards clean energy and the evolving energy market, NHPC is diversifying its business portfolio to include the development of PSPs across India. It is pursuing the development of 10,090 MW of PSP capacity in various states. Key initiatives include:
Maharashtra: NHPC signed an MoU with the Department of Energy, Maharashtra government, on June 6, 2023, for developing PSPs along with renewable energy sources (solar, wind, hybrid, etc.).
Odisha: An MoU was signed with the Odisha government through GRIDCO Limited on June 23, 2023, to establish PSPs and renewable energy projects in the state.
Madhya Pradesh: NHPC has prepared the pre-feasibility report for the Indirasagar-Omkareshwar PSP (640 MW).
DVC partnership: NHPC signed an MoU with Damodar Valley Corporation (DVC) on July 20, 2022, to explore the formation of a joint venture for setting up hydropower and PSP projects.
Andhra Pradesh: An MoU was signed with Andhra Pradesh Power Generation Corporation Limited on August 23, 2023, to implement PSPs and other renewable energy projects (solar, floating solar and wind) in phases, with a 50:50 shareholding ratio.
Gujarat: NHPC signed an MoU with Gujarat Industries Power Company Limited on October 17, 2023, for the development of PSPs and renewable energy projects in the state.
ONGC collaboration: An MoU was signed with Oil and Natural Gas Corporation Limited (ONGC) on December 15, 2023, for cooperation in exploring and developing pumped hydro storage and other renewable projects across India.
Punjab: An MoU was signed with Punjab State Power Corporation Limited on March 14, 2024, for the development of hydro projects, PSPs and other renewable energy sources (solar, floating solar) in the state.
These initiatives highlight NHPC’s commitment to expand its renewable energy portfolio and support India’s clean energy transition.
What are your biggest priorities for NHPC Limited?
NHPC’s top priorities include the commissioning of major hydro projects – namely the Parbati-II HEP (800 MW) and the Subansiri Lower HEP (2000 MW); the commissioning of other under-construction hydro projects by subsidiaries, namely Rangit-IV HEP (120 MW), Pakaldul HEP (1000 MW), Kiru HEP (624 MW) and Ratle HEP (850 MW); and the commissioning of under-construction solar projects, namely 300 MW in Bikaner, Gujarat and 100 MW in Andhra Pradesh.
Another priority is to complete the restoration of the Teesta-V Power Station (510 MW) in Sikkim, which was damaged by devastating floods in the Teesta river on October 3 and 4, 2023. Additionally, obtaining timely clearance for projects in the planning phase, namely the Dugar HEP (500 MW), the Uri-1 Stage II HEP (240 MW), the Dulhasti Stage II HEP (260 MW) and the Sawalkot HEP (1,856 MW), is also a key focus area. These priorities underscore NHPC’s commitment to advancing its hydro and solar projects, ensuring timely completion and addressing critical restoration efforts.
What is your outlook for the power sector for the next few years and NHPC’s role in it?
The Indian government presented the following five “nectar elements” (Panchamrit) of India’s climate action at the COP26 held in Glasgow: reach 500 GW of non-fossil energy capacity by 2030; generate 50 per cent of its installed capacity from renewable energy by 2030; reduce total projected carbon emissions by one billion tonnes by 2030; decrease the emissions intensity of its GDP by 45 per cent from the 2005 level by 2030; and achieve net zero emissions by 2070.
According to the NEP 2023 notified by the Central Electricity Authority, India plans to increase its total installed capacity to 900 GW by 2032.
NHPC’s role
Commitment to clean energy: NHPC is dedicated to generating clean and green energy through renewable sources such as hydro, solar, wind and green hydrogen.
Existing capacity: NHPC, a premier hydropower utility, has commissioned 26 projects (hydro and renewable) across the country, with an aggregate installed capacity of 7,144 MW.
Current projects: NHPC (including its subsidiaries) is currently constructing 14 projects (hydro and renewable) with a total installed capacity of 10,442 MW.
Renewable energy implementing agency (REIA): Under a Ministry of New and Renewable Energy scheme, NHPC has been designated as an REIA and an intermediary procurer. This includes solar projects of 700 MW (320 MW in Bikaner and 380 MW in Jaisalmer) already implemented and 6,660 MW under development by various agencies.
Future aspirations: NHPC aims to add 16,348 MW to its existing installed capacity of 7,144.20 MW, envisioning a total of 23,000 MW from renewable energy sources by 2032.
Green hydrogen initiatives: NHPC is also taking steps forward in the development of green hydrogen technology, including a 25 kWe capacity pilot green hydrogen project in Leh and two pilot green hydrogen-based e-mobility projects in Kargil, Leh, and Chamba, Himachal Pradesh. These projects are expected to be commissioned by FY 2024-25.
Rooftop solar projects: NHPC has installed 4.08 MW of rooftop solar capacity across 25 locations. Further rooftop capacity additions are being carried out at various NHPC locations as identified and available.
Pumped storage hydro capacities: NHPC is pursuing the development of approximately 10,090 MW of pumped storage hydro capacities in different parts of the country.
These efforts underscore NHPC’s commitment to contributing significantly to India’s clean energy transition and aligning with the country’s climate action goal.
