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Cover Story | May 2018

"The government should extend solar-like incentives to hydro projects"

<span style="font-weight: bold;">MM Madan, Chairman (Hydro &amp; Tunnelling Group), National Council on Power (ASSOCHAM) <br /> <br /> Where are we heading in terms of hydro projects in India?</span><br /> It is a tough question to answer. At present we, from the hydropower fraternity, have requested the Government of India to come up with a new hydropower policy. So far, hydropower is a dead sector. There are no new projects. Some of the projects with the private sector are not at all coming up. And, there are a lot of delays in the government sector projects. <br /> <br /> <span style="font-weight: bold;">What are possible reasons for projects getting delayed? </span><br /> The projects are not getting clearances at all. If you see, a number of hydro projects are with the Central Electricity Authority (CEA) for clearance. About 70 to 80 per cent of the announced projects are stuck with the Ministry of Environment and Forests, since environmental clearance is there, but forest clearance is not there. Every project is stuck for want of forest clearance. If the government is keen, then why is every project facing a bottleneck? There has to be some policy that encourages project completion. The government has to see that projects get completed in a timely manner. <br /> <br /> For energy needs, where hydropower is required, only hydro can serve the purpose and not solar. There has to be a balance; solar can be a dependent power only during the daytime. During rainy, stormy or cloudy days, solar will not be effective. During evening peak hours, solar power production is zero. Solar tariff is going down and it does not appear to be viable for the developers. The thermal sector has its own issues and pollution is one of the significant challenges. So hydropower sector should be considered more seriously. <br /> <br /> <span style="font-weight: bold;">India, on one hand, is facing challenges in developing hydro projects. On the other hand, it is investing considerably in developing projects in Bhutan. Your take on this? </span><br /> Yes, why is the question? It means there is a system in place in that country. The announced projects are commissioned on time. The clearances are in place for the projects in Bhutan. If hydro projects can be implemented in another country, why not here? Hydro is the only power project that offers a life of 100 years or more. Water is free of cost. One need not pay pollution tax as in the thermal sector. Solar panels will create problems going forward; even storage batteries will create issues. Once the life of these products is over, managing waste would be a headache. <br /> <br /> <span style="font-weight: bold;">What are your recommendations for the government?</span><br /> As an industry, we have presented our points to the government. For example, we have asked for incentives that are extended to the solar power segment to be given to hydro too. In turn, hydropower can be supplied at a cost between Rs 2 and 3 per unit. We are also seeking longer repayment periods for loans of hydro projects, with a lower interest rate.<br /> <br /> <span style="font-weight: bold;">What are the major challenges faced by hydro developers?</span><br /> Getting environmental and forest clearances, acquiring free power clause land and finding funding are some of the major hurdles faced by hydropower developers. The SEBs are not ready to sign PPAs. Everyone is talking about Rs 2.50, which is not a viable rate at all. Despite all these odds, people are ready to go for hydro projects. <br />
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