Two-thirds of the Indian hydropower potential is yet to be used. There are opportunities for Norwegian companies in a wide range of areas.
With the seventh largest hydropower production globally, Indian hydropower segment offers a rich hunting ground for Norwegian hydropower stakeholders. Despite a capacity of 41 GW of installed hydro projects and an additional 13 GW under construction (details here), India is yet to make use of more than 2/3rd of its hydropower potential of 150 GW.
The structure of Hydropower in India is similar to that of Norway with a differentiation between large and small hydro projects (< 25 MW). However unlike Norway, India does not recognize large hydro projects as sources of renewable generation.
While the majority of large hydro potential are located in the Himalayan Range and North East India, Small Hydro Power (SHP) with an estimated potential of 20 GW is located in rivers, canals spread all over the country. Further it is reported that over 93 % of the total hydro potential of the north eastern India is yet to be tapped, primarily in parts of the Brahmaputra river basin.
Policy and regulatory Framework
Hydro Power is both a central and state subject with states (Counties) playing major role in the allocation of small hydro projects. The two nodal ministries, Ministry of Power and Ministry of New and Renewable Energy are responsible for the development of large and small hydro Projects respectively.
For the accelerated development of Small Hydro projects, Ministry of New and Renewable energy has initiated a national small hydro power policy and draft version has been issued as on date.
The policy measures taken by government to promote Hydro power include:
- Cost plus tariff regime for large projects with guaranteed return on equity of 14%. Click here..
- Setting up of dedicated fund to provide long-term finances to hydropower developers
- Tax holidays and exemption of import tariff for > 500 MW capacity
- Draft small hydro power policy released
- National Small Hydro Mission launched (more here…) and 24 States (out of 28) have policies for SHP by private sector
- Special Feed In Tariff, renewable certificates ( certificate of origin) and mandatory procurement obligation on utilities
Project Allocation Framework
Unlike competitive biddings for thermal projects, large hydro power Projects are allocated primary through project allocation/nomination route by state government after encompassing requirement for royalty if any. Small hydro ( less than 25 MW) are allocated more on competitive bidding with bid parameters being either free power or royalty to host state.
Focus on Small Hydro projects
Since India’s large hydropower potential falls in seismic zone 5, making them vulnerable to high-intensity quakes, India is currently focusing on exploiting its small hydro potential which has smaller gestation period, low investments, less R &R issues and low environment risks.
Declared as a priority area, SHP are targeted to add 5000 MW by 2022 with this yearly breakup:
- 500 MW in by 2017, 4,500 MW in the next three years.
- 1,000 MW addition through projects on canal drops, dam outlets and water outfall structures
- Set up 5000 water mills/micro hydro projects and local mini grids
- Focus regions identified as primarily North, South, North East and Central India
Opportunity Areas for Norwegian companies
- Retrofitting and renovation of hydropower projects. Indian government targets R&M of 100 + SHP to enhance generation by 30 – 35 %
- Leveraging Norwegian expertise in civil works, technology to develop projects in joint venture specially in challenging and seismic sensitive zone
- In addition to working as developer, there exist huge opportunities for Norwegian hydropower players in construction, maintainance and operation of hydro power projects.
- Solutions in areas of tunneling, dam construction, equipment supply and turnkey solutions.
- Solutions to Indian States / Ministry of New & Renewable Energy and other Institutional stakeholders in areas such as Environment Impact assessment, Kinetic Hydro solutions etc.
- Solutions in areas of satellite Information , GIS techniques and Modelling for assessment of hydro potential in light of technology advancements
- Setting up Manufacturing Capacity for Hydro TG and BoP in India under Make in India campaign. The current manufacturing capacity in India is close to 1500 MW with 70% used for export
- Technologies to set up low and ultra low head (below 3 m) SHP on canals, dam outlets and water outfall structures. Demonstration projects to be encouraged.
- Develop water mills, individual household systems & micro hydro projects in remote/ rural areas and integration with remote grids.
- Development and up-gradation of watermills and micro hydro projects (up to 100 kW) in the country.
- R & D projects for low head turbines, cumulative Impact assessment, enhancing project life, mini grid for hydro projects to be initiated
- Human Resource Development : multidisciplinary specialized courses in Hydro to be introduced
For market assessment, support and successful Market Entry contact:
Market Advisor, Innovation Norway in New Delhi