Content
A. Overview of Power Sector
B. Hydro power scenario in India
C. Major Challenges
D. Action plan for Revival
. 1
Installed Capacity(MW) of India
(as on 31/01/2019 by CEA)
Thermal 2,23,027 RE
21%
Nuclear 6,780
Hydro
Hydro 45,399 13% Thermal
64%
RE 74,082
Nuclear
Total 3,49,288 2%
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RE capacity (MW) in India
(as on 31/01/2019 by CEA)
Small
Small Hydro 4,517 Hydro
6%
Solar
Wind 35,138 34%
Wind
Bio Mass 9,213 47%
Solar 25,212
Bio Mass
13%
Total 74,082
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Capacity Addition vis a vis Generation
• Generation CAGR of 5.7% could have been achieved with CAGR of 5.7% in installed
capacity i.e. with a capacity of 217159 MW as against 269588 MW.
• Thus 52419 MW capacity has been unutilized . Assuming average installation cost of 5 Cr
/MW , an investment of Rs 2,62,147 Cr is idling
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Accelerated RES Capacity Growth Rate
RES Capacity (GW) Target
175
72.0
30-Sep-18 31-Mar-22
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PLF of coal based stns. reduced to 60%
89.4 86.3
84.8
78.6 76.8
71.9 70.6
56.2 60.0
54.3
NTPC Central State Private Overall
FY 07 FY 18
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Indian energy mix by 2032
Capacity by 2032 (GW)
India Energy
Barclays
KPMG WEF (2016) Outlook
(2015)
(2015)
Fossil (Coal + Gas) 413 440 440 536
Solar + Wind 315 250 224 355
Hydro 65 90 85 52
Nuclear 24 30 24 11
Other RE 17 10 20 -
Total 834 820 793 954
Source: KPMG
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MNRE action plan by 2022
60 GW from Hydro
175 GW from other RES
100 GW of Solar
60 GW from Wind
10 GW from Biomass
5 GW from Small Hydro
8
Factors Affecting Energy choice for fresh capacity
addition
24x7 Power Supply
Domestic Affordability Environment
Grid Stability
Reserves/ Cost/Kwh sustainability
Potential
Energy Security
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1
0
Relative Positioning of Various Options
for India
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1. Coal
Reserves (Billion Tonnes)
87% of the coal is thermal coal
As on 1.4.2014
Annual coal production is ~0.6 BT
Criteria Status Score
(Max-25)
Proven Reserves R/P ratio >200 years @current rate 25
Affordability (cost/unit) < Rs. 2.50 at pit head 25
Environment Sustainability Medium - Green house gas emission 15
Grid Stability High-24x 7 Reliable Power supply 25
Relative Score out of 100 90
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2. Hydro
Potential 150,000 MW
R anki ng St ud y
Ranking Study 107,000 MW The largest potential estimated is 38% in the
North Eastern Region followed by 36% in the
Northern Region.
Hydro Initiative 50,000 MW
Criteria Status Score (Max-
25)
Proven Reserves 150,000 MW 15
Affordability (cost/unit) Higher Fixed Cost; nil fuel cost 25
Environment Sustainability High 20
Grid Stability Sufficiently High / Suitable for peaking 25
Relative Score out of 100 85
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3. Nuclear
Criteria Status Score
(Max-
25)
Proven Reserves Meager Uranium, but vast thorium 5
Affordability Slightly higher due to high capital 10
(cost/unit) cost
Environment High 20
Sustainability
Grid Stability High (24x7) reliable power 25
Relative Score out of 100 60
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4. Solar MW
Criteria Status Score
(Max-
25)
Proven Reserves Unlimited 25
Affordability High (incl. Storage) 15
(cost/unit)
Environment High 25
Sustainability
Grid Stability Low due to infirm and intermittent 10
nature
Relative Score out of 100 75
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5. Wind
Criteria Status Score
Proven Reserves 65,000 MW 20
Affordability Slightly higher 15
(cost/unit)
Environment High 25
Sustainability
Grid Stability Low due to infirm and 10
intermittent nature
Relative Score out of 100 70
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Relative Score of Fuel Options
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Relative Ranking of Fuel Options
Coal is going to be the main stay fuel
Solar & wind has huge potential, but grid stability is a concern
Coal stations Flexibilization challenge for RE integration
Hydro power is the solution
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Recent Environmental commitments
Commitments thru INDC’s (Intended Nationally Determined
Contributions)
–Kyoto Protocol
–Clean Development Mechanism (CDM)
–Paris Agreement
RE and Hydro development
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Need for development of hydropower in India
Grid-balancing services (Ancillaries Services)
–Provisioning of peaking support
–Quick and black start capability
–Frequency and voltage support
–Spinning reserves
–India taking peaking support from Bhutan…
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Need for development of hydropower in India
Supporting large-scale Renewable Integration
–Hydropower in Norway is supporting large-scale integration of
wind power in Denmark
Back down in Solar and Wind plants?
–Wind farm curtailment in Tamil Nadu
20
Hydro power scenario in India
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Hydro power scenario in India
Decline of Hydro Power Share
(%) of Hydro Share
50.00 45.69
(%) of Hydro Share in Total Installed
45.00 41.20 41.80 40.60
40.00 36.76
33.96
35.00
28.77
30.00 25.24 25.01 26.19
25.00
Capacity
19.51
20.00
13.52
15.00
10.00
5.00
0.00
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Hydro Potential in India
India is blessed with immense amount of hydro-electric potential and ranks 5th in terms of exploitable
hydro-potential on global scenario.
Indus
Basin/Rivers
23%
Probable Installed Capacity Brahmaputra
(MW) 44%
Indus 33,832
Ganga
Ganga 20,711 14%
Central India 4,152
Southern
Southern 23,941
16%
Brahmaputra 66,065
Central India
Total 1,48,701 3%
Source: CEA 23
Hydro Potential in India: Growth so far…
Only 30% of the identified potential has been exploited so far
68% (of 8,928 MW) in Western region
Only 2.13% (of 58,971 MW) in North-Eastern region
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Stalled Hydro Projects
other reasons Developer
7% withdrawn
Environment and 4%
Forest Clearance 23,424
issues
Env. and
other reasons 1,846 Forest
Clearance
Developer issues
1,190
withdrawn 89%
Total 26,460
Source: CEA
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Barriers to hydropower development in India
Enabling Land
infrastructure acquisition
7% 8% Geology,
hydrology and
topography
21%
Critical
Contractual
electrical and
disputes
mechanical
19%
works
11%
Local issues, Delays in
law and order clearances
problems 14%
20% Source: PwC
26
Challenges / Roadblocks in Hydro Power
Issues in Project Development Insufficient market
Life Cycle depth and scope
Road blocks
in Hydro
Power
Safeguards Issues
Financing & Risk Sharing
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1. Issues in Project Development Life Cycle
Hydropower planning and project allocations
Water, a state subject: Consent
Different Upfront money
Integrated river basin development plan?
Project approvals
CEA, GSI, Hydel Civil Design Electorate, Hydrology
Directorate and Inter-State Matters Directorate
complex, time consuming and expensive
Land Acquisition
State Govt
Reliable land records
Enabling Infrastructures
power evacuation
(Lower Subansiri, the transmission cost @ Rs10000 Cr)
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2. Insufficient Market Depth and Scope
No Difference between Peak and Non Peak Tariff
Limited Ancillary Support Incentive
Only Frequency control
Meagre FRAS
Negligible Pumped Storage
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3. Safeguards issues
Safeguards acting as deterrent to the development of Projects
–R&R
–Climate, Biodiversity
–Environmental & Forest Clearances
–PIL
–NGT
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4. Financing and Risk Sharing
Project financing and viability issues
High capital cost
Long Gestation period
Long Term Debt
High Risk premium
Risk-sharing profile of hydro projects
Geological, Topographical and Hydrological
Cost Plus: Higher tariff
Unsecure PPA: High Risk
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Action Plan
Safe Guard Strengthening & Governance Enablers
Enhanced Benefit sharing
Action
Plan
Increased Market Development
Development of & Investment
Pumped Storage Facilitation
32
1. Governance Enablers
Declaring all hydropower irrespective of size as RE, New Policy
Creation of a Hydro Power Development Fund (HPDF): Interest Subsidy
Cost of enabling infrastructure to be shared by Govt
Power evacuation and associated infrastructure: Green Energy Corridor
Integrated river basin development and project allocation procedures
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2. Market Development & Investment Facilitation
Differential tariff structures for peak and off-peak tariff
Ancillary services market to include spinning reserves, voltage regulation, black start,
etc.
Separate hydropower purchase obligations (HPOs)
Bundling of energy from variable renewable sources with hydropower
Streamlining of land acquisition and clearances processes : PPP Model
Land record data with DPR
NGT in the environmental and forest appraisal committees
Deferment of free power for the initial years
Amendment in tariff norms: Life 35 to 40-45 years
Financing policies for hydro projects for long term debt
Reduction in Risk premium by more equity part
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[Link] Development of Pumped Storage
‘Natural’ power battery: RE integration
Environmentally friendly: toxic and polluting Li-ion and lead acid batteries
Higher capital cost, but cheaper w.r.t entire project life cycle
Necessary Guidelines
Incentives for the development of pumped storage
Pumped storage hydroelectric schemes in China:
– 40 GW of pumped storage capacity by 2020
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4. Safeguard Strengthening & Enhanced Benefit
sharing
Responsible and sustainable hydropower development
Optimal benefit sharing with all stakeholders
Nepal, provides a mechanism for locals to become active ‘co-investors’,
thereby enabling developers to obtain a ‘social license’
Society’s acceptance
36
Conclusion
Hydro power is the key for integration of
ambitions RE capacity addition plans.
Favourable Policy is the need of the hour to
revive Hydro Sector.
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