India to Submit Draft Policy for Small Hydel Projects by Mid-September
The Indian government plans to submit a draft policy for small hydroelectric projects to the Finance Ministry's Expenditure Finance Committee by September 15. The policy will maintain a capital expenditure-based model and introduce a new incentive framework. It focuses on projects with capacities below 25 MW, managed by the Ministry of New and Renewable Energy. India's small hydel sector has been operating without dedicated support since 2017, despite an estimated potential of 21 GW across 7,133 sites. The policy aims to clarify private sector roles in various aspects of small hydel projects. India's hydroelectric capacity is projected to grow from the current 42 GW to 67 GW by 2031-32.
*this image is generated using AI for illustrative purposes only.
The Indian government is set to take a significant step in promoting small hydroelectric projects, with plans to submit a draft policy to the Finance Ministry's Expenditure Finance Committee by September 15, according to government sources. This move comes as part of India's efforts to boost its renewable energy capacity and provide round-the-clock power in remote locations.
Key Points of the Proposed Policy
- Continuation of Capex-based Model: The new policy will maintain a capital expenditure-based model, acknowledging the long gestation period typical of hydel projects.
- Revised Incentive Structure: The policy aims to introduce a new incentive framework to attract more participants to the sector.
- Focus on Small Projects: The Ministry of New and Renewable Energy will handle policy for projects with capacities below 25 MW.
Current Scenario and Potential
India's small hydel sector has been operating without a dedicated support scheme since September 2017, when the previous policy expired. The country's estimated potential for small hydel projects is substantial:
| Aspect | Details |
|---|---|
| Total Potential | 21.00 GW across 7,133 sites |
| Mountain Regions | Nearly half of the potential sites |
Existing Support Measures
While the new policy is being formulated, several support measures are already in place:
- Tariff rationalization
- Extended project life to 40 years
- 18-year debt repayment periods
- Budgetary support for enabling infrastructure
Private Sector Involvement
The upcoming policy is expected to clarify roles for private players in various aspects of small hydel projects, including:
- Feasibility studies
- Financing
- Storage
- Distribution
Future Outlook
India's hydroelectric capacity is projected to see significant growth:
| Period | Capacity |
|---|---|
| Current | 42.00 GW |
| Projected by 2031-32 | 67.00 GW |
This new policy for small hydel projects is part of India's broader strategy to enhance its renewable energy portfolio and ensure power supply to remote areas. By addressing the unique challenges and opportunities in the small hydel sector, the government aims to unlock the untapped potential of these projects and contribute to the country's sustainable energy goals.
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