Himachal Pradesh new approach to hydro could move 5,100 MW of capacity forward

The State Cabinet of Himachal Pradesh, India, approved amendments to the state’s hydropower policy intended to ensure about 737 stalled hydro projects with a capacity of about 5,100 MW can move forward.

During a May 8 meeting, Chief Minister Jai Ram Thakur approved amendments to “rationalize the rates of royalty to be applicable for allotment of new projects in view of the provisions of national hydro power policy and also keeping in view the provisions of bordering states of Uttarakhand and Jammu & Kashmir.”

In the case of the already allotted hydro projects, these amendments defer 12% free power for the first 12 years of operation. Power from hydro projects with capacity up to 10 MW will be mandatorily purchased by HPSEBL. And the generic tariff applicable to hydro projects with capacity up to 25 MW will be from the date of commissioning, not the date of the implementation agreement. Finally, wheeling/open access charges will not be levied for hydropower plants with capacity up to 25 MW, allowing the developers to sell power at competitive rates outside of Himachal Pradesh.

In addition to accelerating development of the above-mentioned 737 hydro facilities, the government says these steps make it possible to allot 300 projects with a capacity of 2,200 MW “for which there were no takers despite repeated advertisements under the old policy.” The government anticipates all of these steps will catalyze private investment in the hydropower sector by about INR700 billion (US$10.38 billion) over the next 10 years.

Another decision was made by the cabinet during this May 8 meeting that is applicable to hydro: Agreeing to allocate the 66-MW Dhaulasidh project on the Beas River in Hamirpur district to SJVN Ltd. to implement on a standalone, BOOM basis instead of a special purpose vehicle.

Himachal Pradesh has hydropower potential of about 24,000 MW. Projects under development in the region include 30-MW Deothal Chanju and 48-MW Chanju 3 in the Chanju River basin.

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