13 STANDING COMMITTEE ON ENERGY (20 15-16) SIXTEENTH LOK SABHA MINISTRY OF NEW AND RENEWABLE ENERGY Development and Status of Small Hydro Sector THIRTEENTH REPORT LOK SABHA SECRETARIAT NEW DELHI March, 2016/Phalguna, 1937 (Saka) TENTH REPORT 1 THIRTEENTH REPORT STANDING COMMITTEE ON ENERGY (2015-16) (SIXTEENTH LOK SABHA) MINISTRY OF NEW AND RENEWABLE ENERGY Development and Status of Small Hydro Sector Presented to Lok Sabha on 14.03.2016 Laid in Rajya Sabha on 14.03.2016 LOK SABHA SECRETARIAT NEW DELHI March, 2016/Phalguna, 1937 (Saka) 2 COE NO. 268 . Price: Rs. © 2016 by Lok Sabha Secretariat Published under Rule 382 of the Rules of Procedure and Conduct of Business in Lok Sabha (Sixteenth Edition) and Printed by ______________ 3 CONTENTS COMPOSITION OF THE COMMITTEE (2015-16)…………………… (ii) INTRODUCTION………………………………………………………… (iv) I Introductory 2 II Small/Mini-Hydel Potential 4 III Performance during the 11th and 12th Plan 7 IV Micro Hydel Projects and Water Mills 11 V SHP incentive schemes 14 VI Project on Electrification / illumination of all Villages along the 16 State border of Arunachal Pradesh VII Ladakh Renewable Energy Initiative 18 VIII National Mission on Small Hydro 22 IX Policy for SHP development & Private Sector SHP projects 25 X Alternate Hydro Energy Centre 28 Observations/Recommendations 29 ANNEXURES I State-wise details of the financial support/subsidy provided for 44 development of SHP (project-wise) during the last five years II Minutes of the sitting of the Committee held on 57 22nd September, 2015 III Minutes of the sitting of the Committee held on 60 16th October, 2015 IV Minutes of the sitting of the Committee held on 64 18th January, 2016 V Minutes of the sitting of the Committee held on 9th 67 March, 2016 4 TABLES Table No. Subject 2.2 State-wise potential, installed and under Implementation of SHP Projects (As on 31.08.2015) 3.2 Physical achievements vis-à-vis target of 11th Five Year Plan 3.3 Financial performance vis-à-vis allocation of 11th Five Year Plan 3.4 Proposed and actual allocation of 12th Five Year Plan 3.5 Physical targets and the achievements of the 12th Plan 4.5 State-wise installation of water mills 9.5 SHP projects set up through Private sector 5 COMPOSITION OF THE STANDING COMMITTEE ON ENERGY (2015-16) LOK SABHA Dr. Kirit Somaiya - Chairperson 2. Shri Om Birla 3. Shri M. Chandrakasi 4. Shri Ashwini Kumar Choubey 5. Shri Harish Dwivedi 6. Shri Deepender Singh Hooda 7. Shri Saumitra Khan 8. Shri Bhagat Singh Koshyari 9. Dr. Arun Kumar 10. Kunwar Sarvesh Kumar 11. Shri Sriram Malyadri 12. Shri R.P. Marutharajaa 13. Dr. (Smt) Pritam Gopinath Munde 14. Shri Jagdambika Pal 15. Shri Ravindra Kumar Pandey 16. Shrimati Krishna Raj 17. Shri M.B. Rajesh 18. Shri Vinayak Bhaurao Raut 19. Shri Gutha Sukender Reddy 20. @ Shri P.A Sangma 21. Shri Bhanu Pratap Singh Verma RAJYA SABHA 22. Shri V.P. Singh Badnore 23. Shri Oscar Fernandes 24. Shri Ram Jethmalani 25. Shri Javed Ali Khan 26. Shri Pyarimohan Mohapatra 27. Shri S.Muthukaruppan 6 28. Dr. K.P. Ramalingam 29. Shri Ananda Bhaskar Rapolu 30. Dr. Anil Kumar Sahani 31. Shrimati Viplove Thakur SECRETARIAT 1 Shri K.Vijayakrishnan Additional Secretary 2. Shri N.K.Pandey Director 3. Smt. L.Nemjalhing Haokip Under Secretary ____________________________________________________________________________ @ expired on 04.03.2016 7 INTRODUCTION I, the Chairperson, Standing Committee on Energy, having been authorized by the Committee to present the Report on their behalf, do present this Report on 'Development and Status of Small Hydro Sector'. 2. The Committee had extensive consultations with the Ministry of New and Renewable Energy and also undertook a site visit to M/s OREVA Small Hydro Power Project on River Curzon at Narmada, Gujarat. 4. The Committee focused on the potential and installed capacity, incentive scheme, issues and policy and hindrances relating to development of small hydro power. After the series of discussions and consultations, keeping in view the Government of India‟s ambitious renewable power mission of 1,75,000 MW by 2022, the Committee feel that there is a need to give greater importance/priority to mini/small hydro power projects, so as to supplement the generation/supply of power with the solar/renewable power generation. The observations/recommendations suggested by the Committee in this regard are given in the following chapter. 5. The Report was considered and adopted by the Committee at their sitting held on 9th March, 2016. 6. The Committee wish to express their thanks to the officers of the Ministry of New and Renewable Energy for their valuable assistance. NEW DELHI DR. KIRIT SOMAIYA 10th March, 2016 Chairperson Phalguna 20, 1937 (Saka) Standing Committee on Energy 8 REPORT PART I Narration Analysis I. Introductory 1.1 The Ministry of New and Renewable Energy (MNRE) has been allocated the business of micro/ mini/ small hydropower plants up to 25 MW station capacity. Electricity and electricity generated from hydro projects is a subject in the concurrent list, and subject of both the Union and State Governments. However, water being a subject in the State List, the Small Hydro Power (SHP) projects are governed by State policies. The decision of setting up SHP projects or its allotment is taken by the State Government. The expression of interests/ proposals/bids from private developers are invited by the State Government. The Techno-Economic Clearances (TEC)/ approvals for the SHP projects are provided by the State Government concerned. The MNRE have stated that they do not set up or allocate small hydro project. 1.2. However, the Ministry of New and Renewable Energy has been providing Central Financial Assistance to State Governments and the private sector to set up small / mini hydro projects. The Ministry is also organizing technical support towards survey and investigation, preparation of Detailed Project Reports (DPRs), project monitoring and training through the Alternate Hydro Energy Center (AHEC), IIT Roorkee. 1.3. According to the Ministry, the SHP programme in India now is largely private investment driven. Generally, SHP projects are economically viable and the private sector has been showing interest to set up SHP projects. The viability of these projects is normally directly proportional to the capacity of the project. Most of the States with reasonably high SHP potential have been interested in allotting the projects to the private sector for implementation and operation. 9 1.4 It has been reported that the total installed capacity of small hydro projects, at the end of the 11th Plan, was 3395 MW. This was achieved by adding an aggregate capacity of 1419 MW during 2007-2012. There has been a decline in the capacity addition from small hydro in the last two years. The cost of project has gone up and tariff given to the power generated from SHP projects is no more attractive and not supporting investments. The low rate of average pool power purchase rate in hydro rich States and non-sale of Renewable Energy Certificates in the open market are some of the other reasons for the declining interest in the SHP sector. For the year 2014-15, the target was 250 MW. During the year, SHP projects aggregating to a capacity of 187.15 MW (up to 31.12.2014) have been commissioned, both in the commercial and State Sector. In cumulative terms, 1019 small hydropower projects aggregating to 3990.90 MW have been set up in various parts of the country. In addition, 233 projects of about 747.66 MW are in various stages of implementation. 1.5 In order to revive the interest of the States and the private sector, the Ministry has revised its incentive scheme during the current year. The Ministry is providing financial assistance in the form of grants /subsidy under the following schemes / activities: i) Resource assessment and support for identification of new sites: ii) Scheme to support for setting up new SHP projects in the private/ co-operative/ joint sector, etc. iii) Scheme to support for setting up new SHP projects in the Government Sector. iv) Scheme to support for Renovation and Modernization of existing SHP projects v) Scheme to support for development/Upgradation of Water Mills (mechanical/ electrical output) and setting up Micro Hydel Projects (up to 100KW capacity). vi) Research & Development and Human Resource Development. 1.6 It has also been stated that small hydel projects normally do not encounter the problems associated with large hydel projects like deforestation and resettlement. The projects have potential to meet the power requirements of remote and isolated areas. 10 These factors make small hydel as one of the most attractive renewable sources of grid quality power generation. 23 States of the country have policies in place towards private sector participation to set up SHP projects. 1.7. The Ministry has been taking a series of steps to promote development of SHP and to improve reliability and quality of the projects. By giving various physical and financial incentives, investments have been attracted in commercial SHP projects apart from subsidizing State Governments to set up small hydro projects. The Ministry is giving special emphasis to promote use of new and efficient designs of water mills for mechanical as well as electricity generation and setting up of micro hydel projects up to 100 KW for remote village electrification. These projects are taken up with the involvement of local organizations such as the Water Mills Associations, cooperative societies, registered NGOs, village energy cooperatives, and State Nodal Agencies. 1.8. The Ministry has also reported that so far, 1047 small hydropower projects aggregating to 4146 MW have been set up in various parts of the country and 206 projects of about 591 MW are in various stages of implementation.