The Ministry of Power is in the process of finalising a new hydro power policy that could lead to its recognition as a renewable source of energy. The proposed policy seeks to blur the difference between large and small hydro power plants. Given the dire condition of the hydro power sector with nearly all under construction projects delayed and/or stalled, the policy is aimed at reviving the projects and expedite their construction. To this end, the government has also proposed a Rs 160 billion hydro power development fund that will help restart stalled projects.
The cross-border electricity trade guidelines aim at promoting economic growth among all South Asian Association for Regional Corporation (SAARC) countries. The guidelines were issued by the Ministry of Power in consultation with the Ministry of External Affairs in December 2016. Electricity shall be traded at Indian power exchanges under term ahead and intra-day/contingency contracts, the quantum of which shall be prescribed regularly.
Key reasons for delays include time taken for approvals and clearances, slow pace of work at the site, sites often being inundated by floods, agitation against the project by the affected population, financial issues as well as poor geology.
Considering the cost overruns of delayed and stalled projects, investments required for concurred projects as well for those under survey and investigation stage, a total investment of Rs 1,737 billion will be required for the realisation of the total hydro power capacity. The magnitude of this investment is likely to increase with further delay in the execution of these projects.
Considering the inherent variability of solar and wind power and the country’s need to go green, the grid-balancing act will have to be increasingly taken over from coal by hydro power, making its development essential for the Indian power system. Hydro power plants have the ability to be quickly ramped-up, especially in the case of pumped storage hydro power plants. Unfortunately, India has only nine of these plants developed so far.
The financing sentiment in the hydro power sector has been quite damp in the past two years with no major financial closure being reported. Stressed projects and assets have led to mergers and acquisitions in the sector as companies are looking to sell assets to reduce the burden of debt.
The data sources in this report is both primary and secondary. The primary data is obtained from sources such as related ministries, industry experts, private companies, Conferences organized by us for the related sector etc. The secondary sources include annual reports of companies, industry associations, paid databases, web sites, etc. The analysts and researchers combine the information from these primary and secondary sources with their industry expertise to synthesize the data presented in the report. Surveys and interviews are also conducted for this research. For the surveys, Interviews with key players and relevant people in the sector are mainly conducted. They are mostly via telephonic as well as personal interviews.
Section I: Market Overview and Outlook
- Executive Summary
- Sector Size and Growth
- Key Recent Developments
- New Hydro Power Policy
- Other Policy and Regulatory Developments
- Costs and Tariffs
- Delayed and Stalled Projects
- Cross-border Initiatives
- State Initiatives
- Future Outlook
- Analysis of Existing Capacity
- Generation Performance Analysis
- Renovation and Modernisation
- Pipeline of Upcoming Projects
- Analysis of Upcoming Capacity
- Analysis of Delayed Projects
- Key Projects Under Execution
- Upcoming Project Profiles
- Central Public Sector Units
- State-owned Gencos
- Independent Power Producers