Hydroelectricity is clean energy and its generation is not linked to issues concerning fuel supply, especially the price volatility of imported fuels. It enhances our energy security and is ideal for meeting the peak demand. Its share has gradually declined. Therefore, thermal generation, which should generally be used for base load operation, is also being used to meet peaking requirements. This leads to non-optimal utilisation of economic and perishable resources.

Only about 17% of vast hydel potential of 1,50,000 MW has been tapped so far. Countries like Norway, Canada, Brazil have all been utilising more than 30% of their hydro potential wherease India and China have lagged far behind as can be seen in the table below.

Therefore, exploiting the vast hydro potential has been provided extra thrust in the capacity addition plans and has been accorded high priority in our power development plans. In order to improve the themal-hydro mix following measures have been undertaken:

The Union Ministry of Power has taken several steps to accelerate capacity addition from hydro-electric projects. These include:

The policy measures undertaken to accelerate hydro power development inter-alia lay emphasis on basin-wise development. World Bank assistance for survey, investigation and preparation of DPRs of the projects in Sutlej and Ravi basins is being considered.

The CEA in consultation with the States, Department of Space, Ministry of Environment & Forests, CWC and Geological Survey of India, has initiated a basin wise ranking study of all the balance hydro sites with a view to identify those hydro projecdts which could be taken up first so that hydro power development is taken up in a appropriate sequence. The objective of the study is to optimally utilise the potential of feasible hydro projects in the country over the next few decades.

With the objective of reducing the time and cost overrun of hydro projects which has largely taken place on account of poor and hasty investigation and non-availability of proper infrastructure in terms of access roads and land, the Govemment has recently introduced a three stage process for development of new hydro electric projects in the Central Sector. The three Stages are:

In terms of the guidelines of three stage clearance and delegation of powers approved in consultation with Ministry of Finance and Ministry of Environment & Forests, the Ministry of Power has been authorised to sanction expenditure of Rs. 10 crores on survey, investigation and preparation of feasibility report for new hydro-electric projects. Expenditure upto Rs.50 crores can be incurred on the preparation of DPR, pre-construction activities and land acquisition subject to approval by a Committee of PIB based on the site clearance from Ministry of Environment and Forests and after the commercial viability of the project has been established. Proposals involving expenditure above Rs.50 crores would require approval of PIB/CCEA.

VI CENTRAL GOVERNMENT INCENTIVES /FINANCES AVAILABLE

In order to provide a greater thrust for speedy development of hydro power sector, the new hydro power policy was announced by Govt. of India (Ministry of Power) in August, 1998, which recognized the role of Ministry of Non-conventional Energy Sources (MNES), Govt. of India in this sector. Accordingly the subject matter of SHP projects upto 25 MWs has been transferred to MNES from Ministry of Power w.e.f. 29th November, 1999. The incentives provided by MNES Govt. of India under its SHP policy 2002-03, interalia, are as under :

Subsidy scheme for setting up of commercial SHP Projects upto 25 MW station capacity by Private, Joint Sector and others.

In addition to the above, IREDA which is the financial arm of the MNES, Govt. of India established to promote, develop and finance renewable energy technologies and provides funding for development of SHP for setting up commercial SHP projects upto 25 MW station capacity by Private, Joint Sector & others on the following financial terms :