Details of Measures approved:
- Large Hydropower Projects to be declared as Renewable Energy source (as per existing practice, only hydropower projects less than 25MW are categorized as Renewable Energy).
- Declaring Large Hydropower Projects (HPO) as part of non-solar Renewable Purchase Obligation (RPO).
- Tariff rationalization measures including providing flexibility to the developers to determine tariff by back loading of tariff after increasing project life to 40 years, increasing debt repayment period to 18 years and introducing escalating tariff of 2%.
- Budgetary support for funding flood moderation component of hydropower projects.
- Budgetary support for funding cost of enabling infrastructure i.e. roads and bridges.
Need for Measures:
- India is endowed with large hydropower potential of 1,45,320 MW of which only about 45,400 MW has been utilized so far. Only about 10,000 MW of hydropower has been added in the last 10 years.
- The hydropower sector is facing challenges due to which the share of hydropower in the total capacity has declined from 50.36% in the 1960s to around 13% in 2018-19.
- DISOMS are reluctant sign Power Purchase Agreements (PPAs) Hydro Power due to higher tariff, particularly, in the initial years. One of the reasons for high tariff of hydropower is the loading of cost of flood moderation and enabling infrastructure in the project cost.
- In this backdrop, the decision has been taken to adopt measures to promote hydropower sector including providing budgetary support for flood moderation cost and enabling infrastructure cost and tariff rationalization measures to reduce tariff and thus the burden on the consumer.
