Impetus on Renewable Power Generation in India: Evaluating Hydro Power Business Context

Renewable Energy in India – Well positioned for next phase growth

India has been on a remarkable growth momentum post the GoI took initiative to push it from being on the nominal side to be on the leading power capacity additions source. Though, certainly arguable whether the thrust on all facets of renewable energy has been same post 2014 but at the same time the intent in terms of ramping up the capacity cannot be denied. Building grounds from the thrust, solar power seems to be the biggest beneficiaries in the country which has also managed to attract global attention both in terms of participation as developers and suppliers. The growth registered under solar power has opened up the renewable sector as more lucrative for investments and capacities are being planned on an up scaled manner for wind, biomass and small hydro plants in India. One of the major reasons behind the definitive thrust to the pace of enhanced solar capacity additions has been fall in the tariff levels which have tanked to sub-INR.3/kWh levels pushing solar business case in the country.

 

 

Cost parity in focus for India w.r.t to generation sources

Not only the developments in technology but also the necessary push in terms of building an apt regulatory and policy environment by GoI has seen fast paced additions from renewable power and that too with much lowered effective LCOE. The announcements to reintroduce the  accelerated depreciation in the renewable sector has been a positive coupled with eased duty structures and availability of viability gap funding (VGF) have further boosted the case for renewable sector in India. Further, creation of a separate infrastructure development fund by GoI has enabled the thrust on to an escalated sentiment for adding the RES capacity especially from solar power in the country. Another, advantage of RES is the life-cycle cost being less than the conventional one’s which is being more preferred.

 

 

Growth of Hydro Power – Global & Indian Perspective

Hydropower capacity continues to grow in South and Central Asia. The region added a total of 1,315 MW in 2016, and announced a number of policy and infrastructure changes that could accelerate development. The Indian Government began discussions in 2016 to extend the scope of renewable energy to include hydropower stations with capacities greater than 25 MW. At present, only hydropower plants of up to 25 MW are classified as renewable. The change would help meet the country’s renewable energy target of 175 GW by 2022. In addition, it would enable hydropower projects to attract more capital, and free up existing projects to sell power (distribution companies must purchase a certain quantity of renewables).

 

 

 

 

 

 

 

India’s Capacity Addition in 2016 in Hydro Power

India commissioned several hydropower projects in 2016, with total capacity of 703 MW. These include: the final 40 MW unit of four installed at the Teesta Low Dam; 36 MW Chanju 1, a run-of-river project in the northern Himachal Pradesh state; the first 30 MW unit of four at the Pulichintala hydroelectric project; and 8 MW Pathankayam, a small run-of-river project in Kerala. The Lower Jurala project, meanwhile, added 160 MW (the final four turbines), bringing its total capacity to 240 MW. The National Hydroelectric Power Corporation (NHPC) in India revealed plans to rehabilitate and upgrade  the 180 MW Baira Siul hydropower plant. NHPC is also in the process of developing a unique project, combining floating PV with pumped hydropower storage. This will be located at the Koyna hydroelectric project in the Satara district of Maharashtra, and will have a total capacity of 600 MW. An initial feasibility study showed positive signs for the future development of tidal lagoon power in the  gulf of Khambhat.

*The views expressed in this article are solely those of enincon perspectives and do not necessarily represent those of Enincon LLP.

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