India will mitigate China's threat with Siang project: NHPC Chairman & MD

For the last few years, the government has given a lot of emphasis to hydropower projects and pumped storage solutions through policy push and incentives, said NHPC Chairman & MD

Hydropower is back in the reckoning after the recent policy push from the Centre to make it a reliable balancing power source as India adds more renewable energy. NHPC, the state-owned hydropower major, is betting on this and is hopeful to finish large hydro projects of strategic importance such as the one in the Siang Valley in Arunachal Pradesh. It is also building solar and wind projects that will be hived off in a subsidiary and potentially listed as well, said R K Chaudhary, chairman & managing director NHPC, in an interview with Shreya Jai in Faridabad.

 

What is the status of current and upcoming projects of NHPC? 

For the last few years, the government has given a lot of emphasis to hydropower projects and pumped storage solutions through policy push and incentives. We have nine hydro projects hydroelectric projects (HEP) under construction totalling 9.3 gigawatt (gw). Out of these, few projects such as Parbati-II HEP (0.8 GW) will be commissioned in March this year.  

Further, we are planning to commission three units of Subansari lower project totalling 0.75 Gw by April 2025. Rangit-IV (0.12 Gw) is also planned to be commissioned by end of this year. Teesta-VI in Sikkim and four projects in Jammu & Kashmir are under fast pace of construction and we are hopeful these projects will commission in stipulated time.  Apart from this, we have five projects of around 4.04 Gw under different stages of the clearances and six projects of around 5.5 Gw, which are under survey & investigation stage. 

NHPC and three other hydro PSUs were given 13 projects in Arunachal Pradesh, what is their status? 

The 13 projects totalling 14 Gw have been allocated to us along with SJVN, NEEPCO, and THDC. Out of these, the Kamala hydroelectric project (HEP) of 1.7 Gw and Subansiri upper HEP of 1.6 Gw were allocated to us. We have acted very fast on these and have submitted the detailed project report (DPR). We have set the target to float the tender for civil works for Kamala by March and for Subansiri by July-August. 

 Has the work on the Siang Valley hydro projects caught pace after recent threats from China? 

Siang Valley comprises two projects – Siang upper multipurpose project is 11.2 Gw, and the lower is 2.7 Gw. The upper project is strategic because China is constructing projects in the Sang Po River (the Tibetan part of the Siang River). It was not much of a threat until China recently announced the Motong dam project at the great bank of the Sang Po River worth 60 Gw. They also plan to divert the water of the project during non-monsoon months for irrigation and other purposes. India has to plan to mitigate the threats from the project. The plan is to keep the height of the dam at 280 meters and keep the topmost part empty. This is being done to absorb any intentional release of water from the Chinese side through the Motong dam. The dam will have the ability to absorb up to 9.2 billion cubic metres (BCM) of water. This will protect the downstream area from the floods. For the non-monsoon months, it is feared that China will divert the water of the Siang River, thereby impacting the ecology and living conditions of the area. So, the plan is that at the fag-end of the monsoon period, we will fill up the reservoir up to its ‘full reservoir level’. We will release this water gradually and keep the river always alive. The irrigation and ecology would not be impacted. Power generation from this project is a by-product. Flood and drought control is the main purpose of the Siang upper project. NHPC will execute the project. According to the PFR, the cost of the project is Rs 1.40 trillion, excluding the cost of land and R&R. The construction timeline is estimated to be 10 to 12 years. 

What is the risk-reward ratio for NHPC in this project? 

At the national level, as the country is moving towards energy transition, 11 Gw of hydropower will act as a balancing source. This project alone has the potential to generate profit worth Rs 5,000 crore. 

NHPC is diversifying into various segments including renewable energy through its role as REIA, and rooftop solar under government schemes. What is the business outlook? 

As a renewable energy implementing agency (REIA), our target is 10 Gw per year and we are on track. We have almost awarded 16.6 Gw of RE projects through REIA. The only challenge is we do not get quick responses from the state-owned power distribution companies (discoms) for signing power sale agreements. We have requested MNRE to impress upon discoms to assess their load requirement and sign PSA. Recently, the Centre has selected NHPC as the BIA — battery energy storage implementing agency, and we have been given a target of 15 Gwh. We have written to various state governments and got overwhelming responses from Gujarat, Kerala, Rajasthan, Andhra, and Uttar Pradesh. The requests total up to 10 Gw. Additionally, through our subsidiary NHPC Renewable Energy Ltd (NREL), we are executing projects under the PM Suryaghar Muft Bijli Yojana. 

Any plans to list NREL? 

Currently, we have been assigned the CPSU scheme of 1 Gw and the government has also entrusted us with identifying the potential of floating solar. Whatever is the RE business capex of NHPC, once all of it is commissioned and operationalised, then NHPC will put all projects in the NREL basket. The target is to complete 1 Gw capacity. After a year of commissioning, they will be part of the NREL basket. Thereafter, we will hive off NREl and plan its listing.

 

Areas of interest for NREL will be floating solar and even grid-connected solar power projects. For instance, we have signed an MoU with the Bihar government for developing 1 Gw solar projects. We have sought land from them. Another area of interest would be Leh, Ladakh. 

By 2030, what is NHPC aiming to achieve? 

By 2032, we plan to be a 23 Gw company and by 2040 we are going to be a more than 50 Gw company. This figure will only go up as we add more RE capacity. 

What is your capex plan for the next financial year and capex growth trajectory for the next five years? 

This year around Rs 11,762 crore capex is planned. Last year, we met 80 per cent of our planned  10,857 crore capex. We will maintain our capex in this range. For the next ten years, we have a capex plan of Rs 1 trillion.