New Delhi: Power Ministry has finalised a policy for reviving 40 hydro power projects of 11,639 MW, provide support of Rs 16,709 crore and declare all large and small hydro projects as renewable energy.
Removing the distinction between large and small hydro plants would enable India to achieve clean power capacity of 225 GW by 2022.
At present, a hydro power project up to 25 MW is classified under renewable energy and is entitled to various incentives provided by the government.
“The policy for revival of hydro power sector was circulated to stakeholders in April this year for their their feedback in a month’s time. Now, the policy would be placed before Union Cabinet for approval anytime soon,” a source said.
Out of the 329.20 GW installed power generation capacity, 44.59 GW comes from large hydro projects (above 25 MW) and 57.26 GW from other renewable power generation capacities.
India has set an ambitious target of adding 175 GW of renewable energy capacity by 2022 which includes 100 GW of solar, 60 GW from wind, 10 GW from bio-power and 5 GW from small hydro-power (up to 25 MW capacity each).
Under the policy, the government will provide interest subvention of 4 per cent during construction for up to 7 years and three years after starting commercial operation to all hydro power projects above 25 MW.
It is proposed that the funding for this policy would come from coal cess or national clean energy fund or non-lapsable central pool of resources for Northeastern states for eight years till 2024-25.
A Hydro Power Fund would be created under the Power Ministry for providing funds to the projects under the policy.
The policy also provides for Hydro Purchase Obligation (HPO) for hydro projects of over 25 MW capacity. Under this the discoms would be mandated to buy a proportion of power from these plants.
However, this benefit would be available to those hydro power plants, which would be able to begin commercial operations after five years of notification of this policy.
The policy would also mandate Power Ministry to engage with bankers and financial institutions for modifying lending terms and conditions for hydro power projects.