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Cover Story | May 2017

Sunset Detour

Once at the forefront of power generation in India, today hydro power has fallen far behind. We take a look at what ails the sector and the possible solutions to restore its former glory.

India ranks fifth in hydropower capacity in the world. But, this power source currently accounts for only 12 per cent of the total generation in the country. Also, various issues like those of water-sharing disputes, environment concerns, rehabilitation and resettlement (R&R) issues, land acquisition problems, clearance and approval delays, inadequate technical, financial capability of developers, and inadequate power evacuation infrastructure, etc, still remain.

These issues result in a declining share of hydropower in India's electricity mix - e.g., a drop by almost 30 per cent in the last 40 years. For example, in Arunachal Pradesh, of 120 MoUs (40,141 MW), most projects were at a standstill.

India at present is more dependent on fossil fuels to power its fast growing economy. Compared to developed nations India has not fully explored its hydropower potential and its share in the generation mix is very less when compared to other conventional sources. To ensure energy security, GoI is also likely considering large-hydro under renewable energy, which is an appreciable move.

Policy
Hydropower development is challenged by varying risks and uncertainties, and needs government support in terms of data availability, financing, market development, etc., for efficient development. Sustainable growth in the sector can be channelised through an efficient governance framework by adopting a suitable policy framework, sector-specific strategies, and simple and transparent processes.

Acknowledging the need of the hour, GoI has undertaken a number of initiatives in the recent past. A result of this is increased financial allocation, along with other non-financial support, and initiation towards establishing dedicated hydropower development fund to improve investment attractiveness of the sector.

However, the various ministries, state governments and departments must be on the same page and the present framework needs to be reviewed for both the government and private parties in order to have substantial development.

Challenges
As India continues to expand its generation capacity across energy sources, there are several challenges to set up hydro projects in the country. Some that a developer faces in setting up a hydroelectric plant are long gestation period of construction on account of various reasons, environmental issues, R&R problems, gap between investigations and field realities, etc.

We do have a number of successful stories on the hydroelectric projects but we also have large projects which have taken several years to get completed. Moreover, due to the capital intensive nature of hydro, there is a challenge finding a balance between bankability and affordability.

Moreover, the provision of free power to the state, irrespective of the technical parameters, affects the financial viability of projects, especially of those with a low load factor. This makes projects even more costly and tariff becomes almost unsustainable. Technical challenges are the most critical bottleneck for the commissioning of hydropower projects, as demonstrated by projects scheduled to be commissioned within the 12th Five Year Plan. Construction time is highly influenced by the unpredictable nature of geological and climatic conditions. Furthermore, most of the hydropower projects are located in remote Himalayan areas which do not have adequate transmission infrastructure.

Once there is clarity on the policies for hydro power and encouragement for developers and manufacturers, demand is bound to rise for electro-mechanical equipment. As such players are not having any hurdle with regard to technology and can provide optimum techno-commercial solutions for upcoming hydro projects in India.

However, the concept of mega power project policies for large sized projects should also be revisited for new upcoming projects where concessions for taxes and duties may be considered by the authorities.

Technology
'The Indian power sector has been advancing on the technological front with the trend moving more towards usage of efficient machineries with very low maintenance,' feels Tomohiko Okada, Managing Director, Toshiba India Pvt. Ltd (TIPL).

Geological issues are the biggest problem and have delayed the timely completion of projects in recent years. Technological capacity augmentation thus emerges as a priority. The central government agencies should be notified about probable project sites well in advance and adequate geological data, including seismic mapping and hydrological data, prior to handing over the project to the developer.

The hydropower plant operators also require technical capacity upgradation, especially for older plants. Most of the plants with more than 30 years of operational life work on a lower automation level which hampers productivity.

The most common technology used for hydro is run-of-the-river power plants that is used mostly for small hydro projects (SHPs) with capacity less than 25 MW. These plants are normally used to cover the base load. For large hydro the most common technology used is the pumped storage technology that uses reservoirs to store water, and generate power with the differential height between the upper and lower reservoirs. This is again available for electricity generation at peak load times. To date, much of India's SHPs potential remains untapped.

'SHPs work best in the Indian scenario as it does not have the associated issues and a great share of the value chain benefits local economies. It has the lowest electricity generation prices of all off-grid technologies, and has the flexibility to be adapted to various geographical and infrastructural circumstances,' explains Mahesh Paranjpe, Chief -Hydro, Tata Power.

SHPs have truly gained popularity in India mainly due to less gestation period and investment. About 50 per cent of the small hydro potential lies Arunachal Pradesh, Uttarakhand, Jammu and Kashmir and Himachal Pradesh and significant potential has been identified in the regions of Maharashtra, Chhattisgarh and Karnataka.

Turnaround
Growth in hydro power segment has declined. Developers are facing the problems of land acquisition, clearances related issues, PPAs, tariff issue and funds constraints. But there is optimistic that these issues will be resolved by the government and developers.

'For a turnaround, it is imperative that the power purchase planning in a country cannot be based on the current power tariffs alone and it is important that the future scenario also needs to be considered by discoms,' feels Paranjpe.

In view of the same, all stakeholders need to consider an appropriate mix of hydro in portfolio of purchase of bulk power by a discom for better security. Also, at present, the government is stressing on enforcement of Renewable Purchase Obligation (RPO) with a view to encourage renewable sources that are restricted to SHPs that are smaller than 25 MW).

At the same time several investors had shown interest in setting up merchant hydro plants and have been awarded contract through competitive bidding basis. It is therefore necessary that power from these projects are sold on regulated basis i.e. the tariff should also be determined by the Regulatory Commission under Section 62 of the Electricity Act. Besides, infrastructure should be built in time and satisfactorily monitored by the state and central authorities for timely completion of the hydro projects.

Future in India
According to CEA - the power ministry's planning wing - a total of 75 projects have been approved since 2002-03 with a total installed capacity of 39,562 MW across India. Of these, nearly 42 projects with a total installed capacity of 26,638 MW are yet to be taken up by the developers for construction even after getting an appraisal from the commission.

These projects are held up due to difficulties in securing environment and forest clearance. Also, due to an increase in time and cost overruns, many private players have exited their projects and public sector companies are clinging on to the hope of securing approvals.

'However, it is heartening to note that the government is committed to remove roadblocks in the path of the wind and hydro power sectors to fuel growth after focusing on solar energy for the past two years. This will help in attracting more investments and will provide boost to the sector,' feels Paranjpe.

-JOCELYN FERNANDES

Case Study: THDCIL
THDCIL operates the 1,000 MW (4x250 MW) Tehri HPP and the 400 MW (4x100 MW) Koteshwar HEP. The Tehri HPP is running at its full capacity since commissioning of all four Units in 2006-07, and the plant generated 3101 MU for FY2015-16, against design energy of 2797 MU.

Reasons for delay in implementation of the Tehri HPP:

  • THDC took over the project from Irrigation Department in 1989.
  • Opposition by local people and Dharnas on various occasions.
  • Govt. ban on shifting of population of old Tehri Town till decision on Rehabilitation in May'1996.
  • Review of technical aspects and other information relating to safety of Tehri Dam in June'1996.
  • Delay in Rehabilitation and Resettlement.
  • Formation of new state (Uttarakhand).
  • Review of Environmental and Rehabilitation aspects of Tehri Dam by Prof. Hanumantha Rao Committee during 1996-97.
  • Review of seismic safety of Tehri Dam by the Committee headed by Dr. Murli Manohar Joshi constituted in April'2001.
  • Delay in achieving required MDDL due to stay by High Court in AugÆ05 on PIL against closure of T2 Tunnel.

Contribution to the economy
- 1 per cent increase in production of electricity in the nation contributes to 1 per cent increase in GDP.
- The electricity produced by Tehri HPP and Koteshwar HEP is provided to nine beneficiaries of northern region viz. Uttarakhand, Uttar Pradesh, Haryana, Himachal Pradesh, Delhi, Punjab, Jammu and Kashmir, Chandigarh and Rajasthan.
- THDCIL is earning profit since first year of commercial operation of Tehri HPP i.e. 2006-07 -a part of which is paid back as dividend to shareholders- GoI and Govt of UP.
- A part of the profit earned by THDCIL (2% of PAT) is earmarked for CSR and Sustainability activities in non lapsable CSR and Sustainability fund.
- 12 per cent of Power generated from Tehri HPP (1000 MW) and Koteshwar HEP (400 MW) is provided Free of cost to the Home State of Uttarakhand.
- The company pays taxes on purchase of goods and services, creates direct and indirect employment and stimulates the local economy.
- Tehri Project will also play an important role for the development of surrounding areas and in improving the quality of life by providing employment opportunities and additional source of revenue in the form of fishing, tourism, water sports etc for which GoUK is taking initiatives.

Tehri Rehabilitation Status
The rehabilitation of Tehri project was implemented by Uttarakhand with funds provided by THDCIL. The rehabilitation has been completed. Total 5,291 urban families and 5,429 rural families were rehabilitated whereas 3,810 partially affected families need not to be relocated.

THDCIL released Rs 102.99 crore against full and final settlement for completion of R&R works of Tehri Project. The total cost of R&R as of now is Rs 1,484 crore. Additionally, to address grievances from Project Affected Families, a Grievance Redressal Cell is in place.

Source: THDCIL

SHPs In India
Hydro power is the world's most widely used form of renewable energy. It is clean, sustainable and emission-free. Of this, typically 1-25 MW capacity plants are categorised as small hydro plants (SHPs).

In India, the estimated untapped potential for power generation from SHPs is about 20,000 MW, i.e. 25 per cent of additional capacity expansion planned for next 10 years. It is one of the focus areas of power generation since it requires low investment and is one of the most appropriate renewable, clean and green alternate energy sources to meet increasing energy demands.

Automation of SHPs
Implementation of an automation system in SHPs improves their productivity and operational efficiency. It is the best answer for eliminating the above described issues encountered in manually controlled units. All relevant information, alarms and events related to the process and control system hardware are made available at one place and this drastically enhances operator effectiveness in taking swift and prompt action and helps utility owners to effectively monitor the operation of multiple facilities from one place.

Other benefits include improved diagnostics, easier maintenance and thereby reduction in down time, reduction in manpower and efficient utilisation of available manpower is another positive outcome.

Control and protection systems in SHPs have seen considerable advancements in the recent years. The latest state-of-the art SCADA and easy to use PC-based HMI (human machine interface) systems offer many benefits to hydro power plants. Microprocessor-based digital control system with the associated high performance controllers and high density input/output hardware has drastically reduced the space required for installation of the automation system. The control hardware is rugged, reliable and is easy to maintain with online replacement feature. The old hardwired systems has given way to software configurable DCS Systems utilising powerful function control blocks and libraries. User friendly and efficient engineering tools support application and HMI development.

Current status in India
More and more of the new power plants now have state-of-the-art products and systems for automation with centralised PC-based supervisory control, monitoring and data acquisition. While these plants have started reaping the benefits of advanced technology, more remains to be done to harness the full potential of the latest automation technologies and also extend this to older plants. Renovation and modernisation of old small hydro power projects is seen as one of the most effective way to increase the reliability of power generation within short time and low investments.

In India, total installed capacity of hydro power plants is approximately 40,000 MW and out of which 50 per cent are SHPs, equipped with old controls. There is a need to modernise these plant to enhance their performance, improve productivity and increase reliability.

Though the modernisation has been taken up in selected plants, the progress on this front has been found very slow.

Source: ABB India

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