Cabinet may consider new hydro power policy this month


“The Ministry of Power had finalised the policy and sent to the Ministry of Finance for vetting before placing it for Cabinet approval,” an official in the Ministry of Power told DH. 

There are two main features in the new policy — first is granting renewable energy status to all hydro power projects regardless of size, and second is to provide Rs 16,709 crore support to revive stalled 40 hydel projects. 

At present, small hydro projects of up to 25 MW capacities are considered as renewable energy and such projects are eligible for various incentives by the government in terms of taxation, duties and also cheaper credit. Projects beyond this capacity are not in this category and hence not entitled to the benefits.

The granting of renewable energy status to all hydro projects regardless of its size, would enable India to achieve clean power capacity of 225 GW by 2022, said the official. 

“If we give various benefits to developers of big hydro projects on the line of renewable energy like solar or wind energy, the hydel power tariff will also come down and it would become more competitive in the market on the line of wind energy or solar,” said the official. 

Currently, the hydro sector has around 42,000 MW installed capacity and there is a plan to add another 30,000 MW to 35,000 MW in the next 12 to 13 years. To expedite the capacity addition, the government may give some incentives to the developers, said the official, adding that the government is working on it.

The proposal also says that a Hydro Power Fund would be created under the Power Ministry for providing funds to the projects under the policy.

Besides, under Hydro Purchase Obligation (HPO) for hydro projects of over 25 MW capacity, the discoms would be mandated to buy a proportion of power from these plants.

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