While hydropower, along with nuclear, is regarded as a cleaner source of energy, environmental and social concerns have impacted the sector's growth, since the projects are invariably located in environmentally fragile regions. With a little over 5,000 Mw added during the five-year period ending March 31, 2012, capacity addition in the sector could be lower than the 7,886 Mw added in the 10th Plan period. At 37,367 Mw, it is currently 22 per cent of the total 167,077 Mw installed capacity.
The country's biggest hydropower producer, government-owned NHPC, would not be able to meet its 3,000 Mw capacity target for the current Plan, says its chairman, S K Garg. And, the country's biggest power producer, NTPC, that had hoped to make it big in hydropower projects, has been forced to go slow. "We may not be very aggressive in hydro but we will continue to pursue it," says NTPC chairman Arup Roychoudhury.
He admits a need to re-examine the strategy for these projects. While NTPC's 600 Mw Loharinag Pala project in Uttarakhand has been scrapped, with the government declaring a 135-kilometre stretch of the ecologically sensitive Bhagirathi river as India's first dam-free zone, design problems have delayed its Kol dam project in HP.
Technical, social issues
Besides scrapping of projects in Uttarakhand and Arunachal Pradesh on environmental and religious grounds, faulty designs, technical issues and floods have delayed project construction. The Central Electricity Authority, technical regulator for the power sector, is currently reviewing the targets for the current and the next five-year Plan. "There are some hiccups but we do not anticipate big problems," says CEA chairman Gurdial Singh.
There has been an emphasis on adding hydropower capacity in the past decade. Especially so in states such as Himachal, Uttarakhand and the northeast, where hydropower is one of the few investment avenues that state governments can offer to industry.
But monitoring of the projects is poor. According to the South Asia Network on Dams, Rivers & People (SANDRP), a network of organisations and individuals working on water issues, the installed capacity of large hydro projects has increased at a compound growth rate of 4.35 per cent annually during 1991-2005, higher than all other power sub-sectors. But there is little attempt at a credible assessment of performance. "Unfortunately, project appraisals-from not only an environment and social but also technical angle-are poor," says Himanshu Thakkar, convener, SANDRP.
Thakkar notes generation from each installed megawatt has been almost continuously falling over the past 15 years. It was 3.97 million units per Mw of hydropower in 1994-95 but fell around 30 per cent to 2.87 million units in 2009-10. "Unviable projects, over-development, optimistic assumptions, siltation and inadequate maintenance are some of the reasons."
When a project is given techno-economic clearance, it is based on a promise that it will generate a certain number of units at design level, at 90 per cent dependability level. "Our analysis of all the hydropower projects show 89 per cent of the projects generate at below the design capacity. In fact, 50 per cent of the under-performing projects generate at below 50 per cent of design energy," says the SANDRP report.
According to Thakkar, a lot of unviable capacity is being put up and society is being made to pay for it. He says there is hardly any proper environment impact assessment and public hearing done before putting up projects. Project developers agree that local resistance can be overcome by following norms. "A certain amount of local resistance is normal but if your approach is transparent, then this issue can be tackled," says Rahul Kumar, chief financial officer and director, Jaiprakash Associates.
No clear solutions
With large scale submergence of land for creation of storage leading to displacement and protests by locals, state governments are going in for run of the river (ROR) projects. These involve diversion of the river into tunnels and then releasing the water again. During the lean season, such projects are not able to generate enough electricity, since they do not store water.
According to a CEA report, storage schemes provide the necessary regulation to increase power generation during a lean flow period and also provide flood moderation, irrigation and drinking water supply benefits. "ROR projects are generally less economical and result in higher power tariff," says the report.
During floods or the lean season, when there is less water in the river, a project like the 1,000 Mw Tehri power plant, one of the largest storage-based hydel units, can cause underperformance of projects further downstream especially if they are ROR projects. This defeats the purpose of hydropower projects meeting peaking demand.
Source - Business standard