How to recharge the hydropower sector

On June 27, NITI Aayog notified its latest draft of the National Energy Policy. The draft policy proposes to bail out stranded large hydropower projects. The bailout is expected to consider close to 11,000 MW hydro projects. The new policy also suggests increase in the life of hydro projects from current 35 years to 60 years.

Given the Government’s power sector reforms agenda, the plan to revive the stranded projects is a positive sign. However, the revival strategy must address the underlying policy issues that triggered this emergency.

As of May 2017, India’s total generation capacity stood at 330GW, of which 44GW is from hydropower. Despite having significant hydro potential of 148GW, only 44MW (30 per cent) of the total potential is harnessed. The share of hydropower in the overall energy mix has been falling since 1962-63 when it stood at 51 per cent, against 13 per cent today.

The major reasons of low capacity addition lie in clearances delays, local issues (law and order problems, agitations, etc.), land acquisition, rehabilitation and resettlement and contractual disputes between contractors and companies.

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