MP's first mini-hydel project to come up in 2011

Madhya Pradesh’s first private mini hydel project is likely to take shape in 2011 at Badi, Raisen district.

The state government had announced its mini-hydel power project policy in 2006. Barna Hydel Power Project Pvt Ltd is the first company to take interest in mini-hydel power projects in the state.

“The private company has signed a deal with the state irrigation department for the Rs 10 crore power project,” a government official said. The project will generate 1.9 Mw of power.

To tap mini-hydel power, the state government had in 2006 decided to rope in private sector for mini-hydel power projects. The state has a very thin contribution of 2.42 per cent to national mini hydel power generation of 1,693 Mw.

Named ‘Incentive Policy 2006 for Development of Small Hydro-Power Projects’, the project is a replication of Himachal Pradesh mini hydel power policy.

According to the policy, the mini hydel power projects are given exemptions like power cess and electricity duty even if the projects are used for captive power generation provided that their output stands at 80 per cent. Further, projects of 5 Mw-25 Mw will also be considered as mini hydel power projects.

The project can take shape in any form, independent or a joint venture. The government has added mandatory completion of the projects on build, own, operate and transfer (BOOT) basis.

The state electricity board and its distribution and marketing companies will have the first right to refusal on tariff fixed by state Electricity Regulatory Commission.

However, each power project will allow the state government to drawl ‘free power’ from a minimum 5 per cent to maximum 10 per cent of the total power generation.

“There are 6-7 private companies that have lined up for mini hydel power projects. The state government also offers exemptions from open access duty, water cess and 100 per cent banking facility on some conditions.