Rs 132,000 Crore Needed For Hydel Projects

The government will have to invest Rs 132,000 crore in 22,000 mw of hydel projects over the next 10 years to maintain the current hydel-thermal ratio of 25:75. While the plant load factor in thermal stations has hovered around 60 per cent, hydel generation per mw of installed capacity has fallen to 30-45 per cent from 50-55 per cent during the 1950s. This apart, the share of hydel in total generation is also declining.

These two trends are alarming: the hydel-thermal mix of 25:75 is well below the prescribed 40:60.

The hydel power policy announced lays emphasis on reviving the flagging sector. The key features of the policy are creation of the Power Development Fund, formation of a central committee to asses increases in cost overruns of projects and differential tariff for power from hydel projects.

The package ensures mobilisation of resources for the hydel sector and also provides much-needed incentive for flow of investments into the sector.

The differential power tariff provides higher returns for power during peaking periods and a reduction during off-peak times, keeping total tariff at the same level. The special committee will ensure that projects do not get stalled due geological risks.