Large hydro projects get ‘renewable energy’ status

2 min read
  1. The government has introduced a slew of measures for the hydropower sector. The measures come at the time when the share of hydro-power in the total capacity in India has declined from 50.36% in the 1960s to only around 13% in 2018-19.
  2. The major measure has been the declaration of large Hydropower Projects (LHPs) as Renewable Energy source. At present, only small hydropower projects (SHPs) i.e. those up to 25MW are categorized as Renewable Energy.
  3. The government has also allowed LHPs sell renewable energy certificates under non-solar Renewable Purchase Obligation (RPO) to discoms. Discoms are required to either purchase specified proportion of renewable energy or buy renewable energy certificates in lieu of that. Accordingly, the Hydro Purchase Obligation (HPO) as a separate system will be commissioned within non-solar RPO to cover LHPs. At present, SHPs are already covered under non solar RPO.
  4. Renewable Purchase Obligation (RPO) is a mechanism by which distribution companies, captive power plants and other large electricity consumers are obliged to purchase a certain percentage of power from renewable energy sources.
  5. The government has also approved funding for enabling infrastructure like roads and bridges of Rs 1.5 crore per MW for projects up to 200 MW and Rs one crore per MW for projects above 200 MW. 
  6. Further, LHPs have been allowed back loading (reducing) of tariff after a) increasing project life to 40 years, b) increasing debt repayment period to 18 years and c) introducing escalating tariff of 2%.