Improving energy scenario with SHP projects

How SHP projects can play a critical role in improving the energy scenario

There is no denying to the fact that renewable power is the future. Global reserves of fossil fuel is depleting fast and its extensive usage in the last century or so has resulted into so much of greenhouse gas emission that we have reached to an inflection point of curbing the usage of those fuels and embracing renewable energy for all our basic needs–electricity, auto fuel, heating etc. World leaders have joined hands in this mission and few European countries have already reached its grid self-sufficiency with renewable power. India is one of the frontrunners in this global renewable energy drive with a massive capacity addition target of 175 GW by 2022. 100 GW of this renewable energy will come from solar power, 60 GW from wind, 10 GW from biomass and 5 GW from small hydro.

Hydro power projects are generally categorised in two segments i.e. small and large hydro. In India, hydro projects up to 25 MW station capacities have been categorised as Small Hydro Power (SHP) projects. While Ministry of Power, Government of India is responsible for large hydro projects, the mandate for the subject small hydro power (up to 25 MW) is given to Ministry of New and Renewable Energy. SHP projects are further classified as, micro hydro–up to 100 KW, mini hydro–101 to 1,200 KW and small hydro–2001 to 25,000 KW.

India has a history of about 110 years of hydropower. The first small hydro project of 130 KW commissioned in the hills of Darjeeling in 1897 mark the development of hydropower in India. Till the Independence (1947), the country had an installed capacity of 508 MW hydropower projects, mainly small and medium. A planned development of hydropower projects in India started only in the post-independent era. First 50 years after Independence saw a capacity addition of 85,019 MW, including 21,644 MW of hydropower stations, most of them were being large hydro. In the late 80’s, it was realised that the development of SHP projects potential has remain largely untapped as the focus was on large-scale power generation. In order to provide focused attention to small size projects, the subject of small hydro was brought under the preview of renewable energy. The decade of 90s saw a firm footing for the development of small hydro in India. A comprehensive programme for exploitation of its potential was built. Demonstration projects were supported throughout the country with new technical and engineering concepts to harness small, medium and high heads for SHP projects in hills as well as canals. Research, design projects and a dedicated center. Alternate Hydro Energy Centre (AHEC) at University of Roorkee (now IIT, Roorkee), to provide technical support to the small hydro sector were supported. A database of potential SHP projects sites on small rivers and canals was concurrently developed.

Ministry of New and Renewable Energy (MNRE) has been vested with the responsibility of developing SHP projects up to 25 MW station capacities. The estimated potential for power generation in the country from such plants is 19,749 MW from 6,474 sites and as on 31.01.2017, 4324 MW of small hydro power capacity has been harnessed across 1077 sites. Most of the potential is in Himalayan States as river-based projects and in other states on irrigation canals. The SHP projects programme is now essentially private investment driven. Projects are normally economically viable and private sector is showing lot of interest in investing in SHP projects. The viability of these projects improves with increase in the project capacity. The Ministry’s aim is that at least 50 per cent of the potential in the country is harnessed in the next 10 years. The below tables shows state wise hydro power potential in the country and capacity installed and projects under implementation as on 31.12.2015.

SHP projects installed capacity has steadily increased in the country over the years and every year there have been addition of approximately 300 MW of SHP projects in the country.

The government has a plan to add another 5 GW of SHP projects by the year 2022 to reach their overall ambition of 175 GW of renewable energy targets. This target of 5 GW is further split by various regions as – Northern Region (2,450 MW), Western Region (125 MW), Southern Region (1,675 MW), Eastern Region (135 MW) and North Eastern Region (615 MW). The present government is also planning to energies this sector further by bringing in more private sector investment to meet the above targets through a Tariff Based Competitive Bidding Process for grid connected SHP projects above 10 MW station capacities. The guidelines for the same are in the works and one expects this to be released soon in this year. There is also a discussion to merge the hydro (under Power Ministry) and SHP business (under MNRE) as one hydro entity by the government to facilitate and grow the hydro sector in India–one needs to see the impact of such a move on the SHP business.

SHP programme is also a focus area for MNRE. It has been recognised that SHP projects can play a critical role in improving the energy scenario in remote and inaccessible areas. The Ministry is encouraging development of small hydro projects both in the public as well as private sector. Equal attention is being paid to grid-interactive and decentralised projects. Under the SHP programme, the ministry provides Central Financial Assistance CFA) for:

• Resource assessment and support for identification of new sites
• Setting up new SHP projects in the private/co-operative/joint sector etc

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Setting up new SHP projects in the government sector
• Renovation and modernisation of existing SHP projects in the government sector
• Development/upgradation of water mills (mechanical/electrical output) and setting up Micro Hydel Projects (up to 100 KW capacity)
• Research & Development and Human Resource Development.

Industry experts have suggested various measures to help the growth of SHP sector in the country. These measures are like providing faster clearances by the state government and MOEFCC, consideration of revision of capital cost by CERC/SERC, offering PPAs at preferential tariff, providing transmission connectivity closer to SHP site, ensuring complete procurement of power.

Hydro is a renewable and clean source of energy. It is a proven, mature, predictable, highest conversion efficiency and cost competitive renewable energy source. It requires relatively high initial investment, but has the advantage of very low operational costs and a long life span, quick start and stop. It plays a key role in power systems due to its flexibility and reliability (peaking, ancillary services) and in the present scenario; its importance has further increased because of the large scale addition of variable renewable energy power in the form of solar and wind energy in the power system. Like solar and wind, the industry also expects a policy from the government to further propel the growth of hydropower in the country.

Author –
Rudranil Roysharma
GM & Head – Power and Oil & Gas Practice
Feedback Business Consulting Services Pvt Ltd