The new policy also categorises hydro power as renewable energy, which would open the access to cheaper green financing from global institutions, which would result in cheaper tariffs.
For the better part of the last century, hydropower provided the impetus to the industrialisation of the country. However, from 1980s onwards share of hydropower in the overall energy matrix of the country has fallen rather sharply. Balraj Joshi, chairman and managing director, NHPC, shares his views with FE’s Anupam Chatterjee about how the country’s largest hydropower company plans to promote the conventional form of renewable energy. Edited excerpts:
Is the decline in hydropower share reversible? Do you think it is desirable?
In 1980, hydro provided around 40% of installed capacity which is now around 13% only. Under these circumstances, the current measures adopted by the government of India shall give new wings to the development of hydropower in the country. There has been accelerated development of solar and wind in the current decade. However, due to their intermittent nature, we need grid balancing capacity which only hydro can provide. By a conservative estimate, we will have to double our hydro capacity in the next decade. The positive impact of the decisions taken by the government shall be visible to all in the coming years.
Discoms were reluctant to sign long term PPAs with hydro units due to ‘high tariffs’, particularly in initial years. How can this challenge be overcome?
Now with recognition of large hydro projects as a renewable energy source, discoms have an added incentive for going for PPAs with developers of large hydro projects to fulfill their renewable purchase obligations. The Central Electricity Authority is also coming up with a separate hydro purchase obligation trajectory. The new policy also categorises hydropower as renewable energy, which would open access to cheaper green financing from global institutions, which would result in cheaper tariffs.
Combine it with the other measures like tariff rationalisation, budgetary supports for enabling infrastructure and flood moderation cost, hydro power tariffs will again look attractive.
What are NHPC’s plans in J&K?
J&K is an extremely important business area and we have already invested Rs 20,400 crore in that region. As of today, the region contributes 2,339 MW to our total installed capacity of 7,071 MW. We also have nearly 4,000 MW (800 MW Bursar, 850 MW Ratle, 1,000 MW Pakal Dul, 625 MW Kiru and 540 MW Kwar) of upcoming projects lined up in the area. Initiatives which bring prosperity and facilitates the growth of the region should be welcomed by one and all.
What gives you hope that work would commence at Subansiri during the current fiscal?
The legal issues surrounding it are coming to their logical ends. NGT while disposing off the petition had observed that the project is to advance the public interest. Our efforts in having consensus among all the stakeholders shall pave the way for restart of the project. We have already spent Rs 150 crore in downstream protection and Rs 320 crore in community development.
The success of this project is critical for the overall development of hydropower in the country and shall pace up the hydropower development in the entire northeast region, wherein lies the maximum untapped potential. As of now, we are absorbing the interest during construction part by taking a hit in our balance sheets, and not letting the tariffs increase. The stalling of construction has already increased its levelised tariff to Rs 5.86/unit in 2019 from Rs 1.93/unit in 2005.
What is currently the status of the company’s other stalled projects (2,880 MW Dibang, 1,400 MW Tawang, 515 MW Kotlibhel, 800MW Parbati-II)?
The Parbati-II project is in the active construction stage with excavation and other ancillary activities are going on. As far as Dibang is concerned, the Cabinet has already accorded approval to our proposal for pre-investment activities. The Kotli Bhel Projects shall be taken up after clearance by Hon’ble Supreme Court as it is in the Ganga basin. We have spent only Rs 230 crore yet on this project in making the detailed project report and buying land. For Tawang Projects we are in constant consultation with the all the stakeholders including local inhabitants and state government.