Hydro plants keen on selling surplus power

Written by Preeti Parashar | Chandigarh, Feb 25 | Updated: Feb 26 2008, 07:56am hrs
Keen on selling surplus power to the states which have deficit of it, Small hydro projects (SHP) are demanding better incentives in respect of seeking open access for inter-state sale. While the open access policy is being promoted across the country, the SHPs have to bear the brunt of mounting transmission charges and losses of central transmission utility (CTU), making open access a non-starter for long term sellers.

Bringing forth the challenges faced by the SHPs at an interactive session with Bhanu Bhushan, member, Central Electricity Regulatory Commission (CERC) at CII, northern region head quarter, Pushpinder Singh representing Himachal Small Hydro Power Association suggested further usage of renewable sources of energy. Talking to FE, he said, "Over the last ten years only 10% of the renewable sources have been exploited for power generation. Since the SHPs are running on high risks facing challenges like escalating production cost, lack of infrastructure and evacuation of power, a greater holding by government and various regulatory commissions is essential. The only incentive available at present to the SHPs, up to 25 mw, is in the form of capital subsidy provided by Centre."

Singh further added, "The remunerative tariff provided by Punjab and Haryana for power generated from such SHPs holds no meaning as the transmission charges and losses of CTU add on to the financial burden. To make open access of power viable for the SHPs, there is a need to provide incentives for the sale of power by SHPs."

While CERC is proposing to rationalize the hydropower tariff from April this year, Bhushan suggested, "Alternatives for harnessing renewable energy for open access include sale to home state at SERC, sale to remote state at rates specified by SERC, sale to regional grids as unscheduled interchange, wheeling as captive generation to associate industries and sale of power to third parties."

Meanwhile the industry experts are also mulling upon creation of green exchange for power. Henry Dhaul, director general, Independent Power Producers Association of India expressed, "We are looking forward to some agencies who can collaborate with us to set up green exchanges. The SHPs should be exempted from levy of the unscheduled interchange charges so that the hydro power plants in power rich states of Himachal and Uttarakhand can supply power to other states under the open access policy. But a threat of 'no banking' in case of inter-state sale of power looms large over the power generators."

Padamjit Singh, advisor to Punjab State Electricity Board expressed his concern over regulatory uncertainty on open access policy. "The regulations which came into force in January 2004 have been amended time and again but the issues of long term open access have not yet been addressed," he said.