Hydro policy may link free power with project progress
The Centre is considering a new hydro power policy that may link free power from a project to host states to the progress of the projects, offer annuity to project-affected families on early completion and devise other measures to lower project costs and tariffs. The proposal says stagger free power entitlement to host states, budgetary support for enabling infra around new hydro projects and waiver of inter-state transmission fees for 18 years.
The development of hydro power and pumped storage plants assumes greater importance and significance to ensure peaking and balancing power for the grid as the country targets a renewable capacity of 500 GW. India currently has 48 GW hydro capacity, with a potential for total 145 GW generation. The government is targeting 70 GW capacity by 2030. Hydro projects are usually in remote locations and at times face law and order issues, rehabilitation-resettlement difficulties and geographical surprises, resulting in time and cost overruns. Time and cost overruns can raise tariffs from new hydro projects up to Rs 8 per unit but with these measures the government believes a Rs 4.5 per unit price may be possible.