Himalayan Small Hydropower Summit

(October 12-13, 2006), Dehradun

OVERVIEW OF SMALL HYDRO POWER
DEVELOPMENT IN INDIA
Dr. P. Saxena
Director Ministry of Non-conventional Energy Sources
New Delhi

ABSTRACT

For the 7-8% growth rate that India aspires for, its energy needs will increase correspondingly. The
economic growth calls for increasing use of energy and the challenge is to provide desired quality
power in a sustainable manner and at reasonable cost. There is a need to tap all possible sources of
energy to meet this challenge and Small Hydro Power (SHP) is considered as a reliable option. The
estimated potential of small hydro in the country is of about 15,000 MW. The aim is that out of the
total grid interactive power generation capacity that is being installed, 2% should come from small
hydro. The Indian SHP development programme received a new dimension and tempo after the
liberalization of economy and invitation to private sector for investment in power. Today the SHP
programme is essentially private investment driven. Electricity generation from small hydro is
becoming increasingly competitive with preferential tariffs and some other concessions. The
challenge is to improve reliability, quality and reduce costs. The focus of the SHP programme is to
lower the cost of equipment, increase its reliability and set up projects in areas which give the
maximum advantage in terms of capacity utilisation.

INTRODUCTION

Hydropower is a renewable, non-polluting and environmentally benign source of energy. It is perhaps

the oldest renewable energy technique known to the mankind for mechanical energy conversion as
well as electricity generation. Hydropower represents use of water resources towards inflation free
energy due to absence of fuel cost with mature technology characterized by highest prime moving
efficiency and spectacular operational flexibility. Hydropower contributes around 22% of the World
electricity supply generated from about 7,50,000 MW of installed capacity and in many countries, it is
the main source of power generation e.g. Norway – 99%, Brazil- 86%, Switzerland – 76% and Sweden
– 50%.

Power generating total installed capacity in India is of 1,27,056 MW, which includes 33,194 MW
from hydro. Despite hydroelectric projects being recognized as the most economic and preferred
source of electricity, the share of hydropower in India has been declining since 1963. The hydro share
declined from 50% in 1963 to about 26% in 2005. For grid stability the ideal hydro-thermal mix ratio
is 40:60. It is therefore, necessary to correct the hydro-thermal mix to meet the grid requirements and
peak power shortage. The Government of India has announced, in August, 1998 Policy on Hydro
Power Development, followed by 50,000 MW hydro-electric initiative in May, 2003. About 70% of
the population in India lives in rural areas. The rural energy scenario is characterized by inadequate,
poor and unreliable supply of energy services. Realizing the fact that small hydropower projects can
provide a solution for the energy problem in rural, remote and hilly areas where extension of grid
system is comparatively uneconomical and also along the canal systems having sufficient drops,
promoting small and mini hydel projects is one of the objectives of the Policy on Hydro Power
Development in India.

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SMALL HYDRO POWER PROJECT CLASSIFICATION

Hydro power projects are generally categorized in two segments i.e. small and large hydro. Different
countries are following different norms keeping the upper limit of small hydro ranging from 5 to 50
MW. In India, hydro projects up to 25 MW station capacity have been categorized as Small Hydro
Power (SHP) projects. Further, these are classified as:

Class Station Capacity in kW

Micro Hydro Up to 100
Mini Hydro 101 to 2000
Small Hydro 2001 to 25000

The Ministry of Non-Conventional Energy Sources, Government of India is assigned the business of
SHP up to this capacity.

SMALL HYDRO POTENTIAL

The World estimated potential of small hydro is of around 180,000 MW. India has as an estimated
potential of about 15,000 MW with perennial flow rivers, streams and a large irrigation canal network
with dams & barrages. Of this, 4,404 potential sites with an aggregate capacity of 10,477 MW have
been identified. State-wise details of the identified sites are given in Table 1. A comprehensive
resource assessment for all the renewable energy sources including small hydro and mapping of
potential sites/locations on a GIS platform is receiving utmost attention. The aim is to map renewable
energy potential in the country and bring it on a GIS platform with information necessary to take
investment decisions to set up projects. Models have been developed that takes into account the
regional flow duration curves, geological and seismological data, vegetation cover etc. for
identification of potential sites. Software packages have been developed incorporating regional
hydrological models to enable users to rapidly estimate the hydropower potential and other salient
features of potential sites.

SMALL HYDRO DEVELOPMENT

India has a century old history of hydropower and the beginning was from small hydro. The first hydro
power plant was of 130 KW set up in Darjeeling during 1897, marked the development of hydropower
in the country. With the advancement of technology, and increasing requirement of electricity, the
thrust of electricity generation was shifted to large size hydro and thermal power stations. However,
during the last 10-15 years there is a renewed interest in the development of small hydro power
projects due to its benefits particularly concerning environment and ability to produce power in remote
areas. Small hydro projects are economically viable and have relatively short gestation period. The
major constraints associated with large hydro projects are usually not encountered in small hydro
projects.

For the 7-8% growth rate that we aspire for, our energy needs will increase correspondingly. The
economic growth calls for increasing use of energy and the challenge is to provide desired quality
power in a sustainable manner and at reasonable cost. There is a need to tap all possible sources of
energy to meet this challenge and small hydro is considered as a reliable option. The Ministry’s aim is
that out of the total grid interactive power generation capacity that is being installed, 2% should come
from small hydro. This translates to 2000 MW capacity addition during 2002-2012. The Indian SHP
development programme received a new dimension and tempo after the liberalization of economy and
invitation to private sector for investment in power. Today the SHP programme is essentially private
investment driven. Electricity generation from small hydro is becoming increasingly competitive with
2
preferential tariffs and some other concessions. The challenge is to improve reliability, quality and
reduce costs. The focus of the programme is to lower the cost of equipment, increase its reliability and
set up projects in areas which give the maximum advantage in terms of capacity utilisation.

The installed capacity of SHP projects as on 31.3.2006 is 1826 MW from 556 projects. In addition,
203 SHP project with an aggregate capacity of 468 MW are under implementation. The State-wise
details are given at Table-II. The growth of capacity addition from small hydro projects during last
few yeas is on an average 100 MW per year. A capacity addition of 600 MW during 2002-2007 is
being envisaged through a mix of public and private sector projects, of this about 400 MW has already
been achieved during 2002-2006. Further a target of adding about 1400 MW from small hydro power
projects during 2007-2012 is fixed.

Most SHP capacity addition now is being achieved through private investment. State Nodal Agencies
for renewable energy provide assistance for obtaining necessary clearances, in allotment of land and
potential sites. The Electricity Act 2003 provides that the State Electricity Regulatory Commissions
would promote generation of electricity from Non-conventional sources by providing suitable
measures for connectivity with grid and sale of electricity to any person and also by specifying, for
purchase of electricity from such sources, a percentage of the total consumption of electricity in an
area. SERCs are now determining preferential tariffs for renewable electricity. 16 States have
policies in place for private sector participation. These states have offered sites with an aggregate
potential of over 2500 MW to the private sector. The tariff policy issued by GOI in January 2006 has
entrusted responsibility on the CERC to lay down guidelines for pricing non-firm power, especially
from non-conventional energy sources. Six SERCs from Andhra Pradesh, Madhya Pradesh,
Karnataka, U.P., Uttaranchal and Maharashtra have issued orders for determining tariffs. So far, over
120 private sector SHP projects with an aggregate capacity of about 500 MW have been set up mainly
in Andhra Pradesh, Karnataka, Himachal Pradesh, Punjab, Uttaranchal and Maharashtra.

The Ministry of Non-conventional Energy Sources has been providing subsidy for public sector as
well as private sector SHP. For private sector, subsidy is released after successful commissioning and
commencement of commercial generation from the project, to the Financial Institution (FI). The
subsidy is given for the purpose of offsetting it against the term loan provided to the developer. In
order to ensure quality, equipment used in projects is required to meet international standards.
Projects are also required to be tested for performance by an independent agency to receive the
subsidy. Various financial institutions namely, Indian Renewable Energy Development Agency
(IREDA), Power Finance Corporation (PFC), Rural Electrification Corporation (REC), are providing
loan assistance for setting up of small hydro power projects. In addition to these agencies, finances
are also available from IDBI, IFCI, ICICI, and some nationalized banks etc.

SMALL HYDRO( UP TO 25 MW ) SCENE

Overall Potential 15,000 MW

Identified Potential 10,477 MW (4,404 Sites)
Installed Capacity ( as on 31. 03.2006) 1826 MW ( 556 Projects)
Under Construction 468 MW (203 projects)
Target Capacity Addition – Tenth Plan 600 MW
( 2002-07)
Capacity addition during 2002-06 387 MW
Target capacity addition -11th Plan 1400 MW
(2007-2012)

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SMALL HYDRO IN HIMALAYAN REGION OF INDIA

Himalayan region in India stretches from Jammu & Kashmir, Himachal Pradesh, Uttaranchal
to the North-Eastern States. Almost the entire potential to set up small hydro power projects is of run
of river type and there are innumerous small and big streams where such projects can be set up. The
mountainous topography and snow covered hills are the source of many rivers with large number of
tributary systems having vast hydro electric potential. The region also has a characteristic of small
settlements along the tributaries where it is very difficult to extend conventional grid. In this scenario
small hydro power projects has unique relevance.

Most of the Himalayan regions states are now developing their hydro potential through public and
private sector participation. Till last fiver years or so most of the hydro power projects were set up in
the public sector and State Electricity Boards were responsible for such initiatives. However, in last
few years it has been realized that private sector participation is inevitable to harness this potential at a
faster pace. The State of Himachal Pradesh has taken lead in this direction and over 400 projects have
been offered for private sector implementation. Similarly, Uttaranchal, J&K and some North-Eastern
states are now encouraging private sector participation.

The Himalayan region has also utilized very small streams by setting up hundreds of micro hydel
projects to provide electricity to remote villages and hamlets. A number of NGOs have been active in
promoting such applications. Uttaranchal, Arunachal Pradesh and Nagaland have gained reasonably
good experience in setting up community based micro hydel projects. In J&K, 1000 micro hydel
projects are being set up by the Indian Army on boarder areas to electrify remote villages.

WATERMILLS

Water wheels, commonly known as `gharats', have traditionally been used in the Himalayan regions
for rice hulling, milling of grain and other mechanical applications. These water mills are normally of
very old design and work at very low efficiencies. It has been estimated that there are more than 1.5
lakh potential water mill sites in the country. New and improved designs of water mills have been
developed for mechanical as well as electricity generation of 3-5 kW. The Ministry is providing
Incentives for development and upgradation of water mills. Local organizations such as the Water
Mill Associations, cooperative societies, registered NGOs, local bodies, and State Nodal Agencies
are being encouraged to take up these activities. A number of NGOs are now propagating water mills
for electricity generation to meet small scale electrical requirements of villages. Uttaranchal has taken
a lead in setting up electricity generation watermills and over 300 such watermills were installed in
remote and isolated areas of the state. Nagaland has recently commenced setting up watermills/micro
hydel sets for rural electrification.

MANUFACTURING STATUS

India has a wide base of manufacturers of equipment for small hydro power projects. State-of-the-art
equipment is available indigenously. 10 manufacturers fabricate almost the entire range and type of
SHP equipment. Manufacturers capacity is estimated at about 250 MW per year. In addition, there
are about 5 manufactures that are producing micro hydel and watermill equipment.

STANDARDS FOR SMALL HYDRO

In order to ensure project quality/performance, the Ministry of Non-Conventional Energy Sources has
been insisting to adhere to IEC/International standards for equipment and civil works. The subsidy
available from the Ministry is linked to use of equipment manufactured to IEC or other prescribed
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international standards. Recently the Ministry has given an assignment to AHEC, IIT Roorkee to
revisit the existing standards and come out with standards/manuals/guidelines for improving reliability
and quality of small hydro power projects in the country.
TECHNICAL AND CONSULTATION SERVICES
Consultancy services in the field of small hydro projects are available from a number of Government /
private consultancy organizations. The Ministry is strengthening technical institutions to provide such
services. Alternate Hydro Energy Center’ (AHEC) at IIT Roorkee is providing full range of technical
services in the field of small hydro including survey and investigation, DPR preparation, project
design etc. On site testing facility has been created at AHEC to test SHP stations for their
performance. An SHP simulator is also being set up at AHEC which would provide hands on
experience to operators of SHP stations. The simulator would replicate all conditions of a hydro power
station and is expected to become operational by the end of 2006.
Table-I: State Wise Identified Small Hydel Sites upto 25 MW Capacity
S.No Name of State IDENTIFIED NUMBER Total
OF SITES Capacity
in MW

1 Andhra Pradesh 286 254.63

2 Arunachal Pradesh 492 1059.03
3 Assam 90 148.90
4 Bihar 92 194.02
5 Chhatisgarh 174 179.97
6 Goa 3 2.6
7 Gujarat 290 156.83
8 Haryana 22 30.05
9 Himachal Pradesh 323 1624.78
10 Jammu & Kashmir 201 1207.27
11 Jharkhand 89 170.05
12 Karnataka 230 652.61
13 Kerala 198 466.85
14 Madhya Pradesh 85 336.32
15 Maharashtra 234 599.47
16 Manipur 96 105.63
17 Meghalaya 98 181.50
18 Mizoram 88 190.32
19 Nagaland 86 181.39
20 Orissa 161 156.76
21 Punjab 78 65.26
22 Rajasthan 49 27.26
23 Sikkim 68 202.75
24 Tamil Nadu 147 338.92
25 Tripura 8 9.85
26 Uttar Pradesh 211 267.061
27 Uttaranchal 354 1478.235
28 West Bengal 145 182.62
29 A&N Island 6 6.40
TOTAL 4,404 10,477.34

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Table-II: State Wise Numbers and Aggregate Capacity of SHP Projects (Upto 25 MW)
Setup & Under implementation (as on 31.03.2006)

Sl. No. State Projects set-up Projects under Implementation

Nos. Capacity (MW) Nos. Capacity (MW)
1 Andhra Pradesh 57 178.81 9 13.90
2 Arunachal Pradesh 64 44.30 48 41.27
3 Assam 3 2.11 7 26.00
4 Bihar 7 50.40 7 9.50
5 Chattisgarh 4 11.00 2 8.0
6 Goa 1 0.05 - -
7 Gujarat 2 7.00 - -
8 Haryana 5 62.70 - -
9 Himachal Pradesh 55 132.08 8 28.75
10 J&K 30 109.74 7 7.31
11 Jharkhand 6 4.05 8 34.85
12 Karnataka 56 329.63 16 67.99
13 Kerala 14 84.62 7 57.75
14 Madhya Pradesh 8 41.16 3 24.20
15 Maharashtra 27 207.08 5 25.75
16 Manipur 8 5.45 3 2.75
17 Meghalaya 3 30.71 9 3.28
18 Mizoram 16 14.76 3 15.50
19 Nagaland 9 20.67 5 12.20
20 Orissa 6 7.30 7 40.92
21 Punjab 29 122.55 1 2.00
22 Rajasthan 10 23.85 - -
23 Sikkim 13 38.60 4 12.20
24 Tamil Nadu 12 77.70 2 7.90
25 Tripura 3 16.01 - -
26 Uttar Pradesh 9 25.10
27 Uttaranchal 76 75.45 37 23.01
28 West Bengal 22 98.30 5 3.80
29 A&N Islands 1 5.25 - -
Total 556 1,826.43 203 468.83