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  • India's ambitious renewable energy targets have renewed focus on one of the long-standing and promising power generation options - hydro power.

  • Aside from being a clean source of energy with low operating costs (almost half that of thermal power plants), hydro power projects offer other multiple benefits such as overload capacity, fast ramping, peaking support, storage capabilities and black-start capability, making them a perfect instrument for serving peak demand and achieving grid stability.

  • That said, to ensure that hydro power plays a facilitative role, a number of issues need to be dealt with. Capacity additions in the sector have been abysmally low. The year-on-year capacity addition performance has improved in the past two years with 1.5-1.6 GW being added in the last two fiscals; however, it still remains significantly low in comparison to thermal or renewables.

  • Almost all the under-construction projects, aggregating over 11 GW, are facing time and cost overruns. While environmental concerns, R&R issues, land acquisition problems, geological risks, etc. have led to time and cost overruns in upcoming projects, there have been generation performance issues with the existing ones (projects producing power at much lower levels than the design capacity).

  • Further, much of the hydro potential in hydro-rich states remains unexploited due to an unfavourable policy environment. Hydro's contribution to the country's generation mix has thus declined sharply and in 2016-17, was just around 10.5 per cent.
  • The government does recognise these challenges and is working on a number of measures to reinvigorate the sector. The amendments to the tariff policy have exempted hydro projects from competitive bidding and introduced a robust framework for ancillary services.

  • More recently, a bail-out proposal has been announced, which includes interest subvention for projects and the creation of a hydro power development fund. Further, a new hydro power policy is on the anvil, which aims to classify all hydro projects as renewable sources, irrespective of size, and introduce a hydro power purchase obligation for the states. The finalisation of the policy is expected to lift investor sentiment in the domestic market.

  • Meanwhile, as new investment opportunities in the domestic market are drying up, developers are showing a keen interest in alternative investment destinations, especially cross-border markets like Nepal and Bhutan. The issuance of cross-border trade guidelines have helped in this regard.

  • The industry, on its part, is also making considerable efforts to upgrade existing technologies, improve performance and reliability through O&M best practices, use advanced monitoring tools, controls and automation techniques, deploy more efficient turbine and generator designs, consider advanced methods for dam and tunnel construction, etc. These are helping the industry to cut down construction time and extend the life of existing projects.

  • The mission of this conference is to analyse the key issues, challenges, opportunities and outlook for the hydro power segment in India. The conference will also provide a platform to showcase new technologies, construction methods and noteworthy projects.  

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