Several hydropower projects in India are witnessing significant overruns in both time and costs. Only 28 percent of the total hydropower potential in India – out of 148 GW has been developed so far, according to a report by PwC-Associated Chambers of Commerce and Industry of India (ASSOCHAM).
The slow pace of hydropower development is attributed to complex clearance and approval procedures, land acquisition issues, insufficient market depth and scope, and limited availability of long-term financing.
Despite the government opting for public-private partnerships for many of the projects, many still face impediments across various stages of a project development lifecycle. India has large hydropower reserves that are estimated to meet a demand of around 85 GW at a 60 percent load factor, but the total installed capacity of large hydropower projects (with a capacity greater than 25 MW) to date is only 41 GW, representing only 28 percent of the total potential.
The report stated, “Regional assessment of hydropower development shows that almost 75 percent of the total potential for hydropower development is concentrated in the north-eastern and northern regions. However, only 34 percent of the total potential in the northern and 2 percent of the potential in the north-eastern region has been developed till now.”
Varying risks and uncertainties challenge hydropower project development. Such projects need government support in terms of data availability, financing, and market support for efficient development. The report recommended that the government should further strengthen existing benefit sharing mechanisms to make locals and other affected people partners in hydropower development.
At the Power Ministers’ conference in Goa last year, Hydro power was granted renewable energy status. It was also decided that a separate renewable energy purchase obligation (RPO) should be set up for the hydro power sector with state incentives to meet RPO compliance.
India recently ratified the Paris Climate Agreement and established a goal of generating 40 percent of its electricity from renewable energy sources by 2030. Without tapping into Hydro, meeting the Paris Agreement goal will become very challenging.
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