Reforms needed to speed up hydel power generation growth: ICRA

The Central government could sustain the growth in the hydro electric power development sector only if it tackled the problems facing the sector and also provided adequate compensation package to people displaced by these projects.

The Power Ministry's Eleventh Plan capacity addition target of 78,577 mega watt (MW) included new hydroelectric capacity of 16,553MW.

A report released by the rating agency ICRA highlighted the problems that were preventing the targeted growth from being achieved.

Setting up hydro power plants in high mountainous terrains caused difficulty as it involved clearing of forest tracts, under the nvironment and forests ministry.

Delay in providing these clearences arose on account of catchment area treatment, forest clearance, relocation of game reserves and displacement of local residents.

Six hydro projects with a total capacity of 7100MW in the Subansiri basin and two hydro projects with a total capacity of 1720MW in the Kameng basin were delayed due to issues related to the ministry of environment and forest and wild life issues respectively.

This apart, unavoidable hazards and circumstances, like floods and damage of equipment led to delay of such projects.

These could be minimised only by conducting detailed hydrological and geological studies based on recent data rather than very old ones, and by adopting new methods of investigation and construction equipment.

Inter state disputes also caused delays and according to an estimate, around 34 projects adding up to 6810MW, were held up due to inter state disputes on water sharing of a river basin.

Poor law and order situation of the states also caused some delays.

However the situation was not entirely bleak.

Obtaining funds had become easier with the increase in the number of investors and creditors.

The new Resettlement and Rehabilitation(R&R) Policy, 2007 and the New Hydro Policy, 2008, are providng a favourable environment than before to the developers, state governments and the local residents.

Sale of power by states with low demand could be a source of revenue for these states.