India’s hydro generation in 2019-20

In 2019-20 power generation from India’s large hydropower projects[i] was 11.26% of total electricity generation in India. In 2016-17, for the first time in independent India’s history, power generation from large hydropower projects in India fell below 10% of total electricity generation and remained below 10% for the next three years: 2016-17, 2017-18 and 2018-19. This calculation is based on actual generation (measured as Million or Billion Units[ii]) as reported by Central Electricity Authority (CEA) and not installed capacity (measured in Mega Watts).

As per the just released figures for the year ending on March 31, 2020, the power generation from large hydropower projects (CEA only reports large hydro generation) in 2019-20 was 155.97 BU, when total power generation in India (including renewables generation of 138.32 BU, but excluding Bhutan imports of 5.81 BU) was 1385.12 BU, hence hydropower generation in 2019-20 was 11.26% of total electricity generation. The hydropower generation proportion to total electricity generation was 9.90% in 2016-17; 9.68% in 2017-18 and 9.84% in 2018-19. Two major reasons for the increase in % are: surplus SW Monsoon during 2019 and reduced overall generation first due to economic slowdown and then lockdown following Covid 19 crisis.

Diminishing returns, Declining proportion However, power generation from hydropower projects continues to show diminishing returns, as has been the story close to three decades now, see the trend-line in graph below where we have plotted MU electricity generated per MW hydro installed capacity over the years.

Similarly, the proportion of hydropower in overall electricity generation continues to show declining proportion, slight increase in 2019-20 notwithstanding. Some of the major reasons for this declining proportion of hydropower generation are: diminishing generation of existing hydropower projects in India[iii] (see the graph above) and large hydropower projects becoming more and more unviable[iv]. As the then power minister of India stated in the Parliament[v], at least 15 large hydro projects (NHPC chief says 40 HEPs need bailout package, see below) with capacity close to 6000 MW remains stranded in India.

A direct fall out of this could be seen in the capacity addition trends, see the chart below, where we can see the flattening of the graph in latest years. The capacity addition that was 7028 MW in 1999-2004 and 8553 MW in 2004-09 has fallen to 2464 during 2009-2014 and 4875 MW during 2014-19. In the latest three years (2017-20) capacity addition has been 1221 MW.

The Govt continues to push large hydro On March 8, 2019, on the eve of India’s general elections, the Union Government declared a slew of additional subsidies for hydropower projects, but this seemed more for political economy reason, as also suggested by the timing of the announcement, just before the model code of conduct came into force on March 11, 2019. There are many other attempts being made to flog the unviable hydropower projects with various kind of manipulations, illegalities and violations. Just a couple of instances are narrated below.

• On March 12, 2020, the second stage forest clearance was issued to 2880 MW Dibang multipurpose project in Arunachal Pradesh. Shockingly a day before that, on March 11, 2020, Cement Corporation of India entered into MoU[vi] with NHPC for supplying cement for the Dibang Project. It may be noted here that CCI comes under Ministry of Heavy Industries and Mr Prakash Javdekar happens to be, both the minister of heavy industries and Environment and Forests. And it is MoEF that issues the forest clearance! Earlier on July 17, 2020, The Cabinet Committee on Economic Affairs, chaired by the Prime Minister, approved[vii] Rs 1600 Cr for “pre-investment activities and various clearances” of the project.
• On April 23, 2020, based on a flawed and compromised study by Wildlife Institute of India, the Forest Advisory Committee considered forest clearance for the 3097 MW Etalin project, also in Dibang Valley in Arunachal Pradesh, following approval by the FAC sub committee of which WII person was also a member! However, Bharat Rohra, the Chief Executive Officer of Jindal Power Ltd, the company that is developing the project in Joint Venture with Arunachal Pradesh state government, agreed on May 7, 2020 that the project is unviable[viii]: “In the current situation, the project doesn’t look like an attractive investment in view of the huge investment. Further, it is a large project and we feel we’ll struggle to find long-term buyers for the entire capacity but policy support from the government can make the project viable and draw investors.”
• The Union Govt has proposed[ix] amendment to Electricity Act of 2003, suggesting among other changes, Hydro purchasing obligation norms on the lines of renewable purchasing obligation norms. But the amendment is getting flak from all quarters including states, electric engineers and experts. The Discoms, suffering from severe financial troubles, are unlikely to accept additional burdens in the name of hydro purchasing obligation norms.

None of these are going to help the cause of large hydro projects. The government needs to understand that even these additional subsidies for the already over subsidized hydropower sector is not going to help make them viable. When solar and wind power is available at price below Rs 3 per unit, why is there attempt to push large hydro whose cost is universally over Rs 5-6 per unit or more.

In conclusion India needs to pay attention to optimizing generation from existing hydro and explore the possibilities of installing hydro projects at 97% of India’s existing large dams where there is no hydro component. We also need to first manage our peak hours’ power demand and optimize generation from existing hydro during peak hours, only after assessing and addressing the social and environmental impacts of peaking hour power generation from large hydro projects in a democratic way. Else we will be destroying more rivers and their biodiversity and livelihoods of people dependent on such rivers, while throwing more money into the pockets of consultants, contractors, equipment suppliers, cement companies and other vested interests. The Ministry of Environment and Forests and its Expert Appraisal Committee on River Valley Projects too needs take this opportunity to improve their pathetic environmental governance rather than keep pushing more clearances for projects through corruption, manipulations and violations.

SANDRP (ht.sandrp@gmail.com)   

END NOTES:

[i] Projects with installed capacity above 25 MW as projects with installed capacity below 25MW are called small hydro.

[ii] One Unit equals one Kilowatt hour, which is the power generated when 1 KW of installed capacity runs for one hour. The units are actually consumable and provide the correct picture of power available for consumption.

[iii] For details see: https://sandrp.wordpress.com/2017/02/07/diminishing-returns-from-large-hydropower-projects-opportunity-for-a-pause/

[iv] Even NHPC chief agrees they are unviable currently, see: http://economictimes.indiatimes.com/opinion/interviews/government-bailout-is-required-to-revive-the-hydropower-sector-km-singh-cmd-nhpc/articleshow/59122447.cms

[v] See for example: http://powermin.nic.in/sites/default/files/uploads/LS05052016_Eng.pdf

[vi] https://energy.economictimes.indiatimes.com/news/renewable/nhpc-signs-pact-with-cci-to-meet-dibang-projects-cement-requirements/74587066

[vii] https://pib.gov.in/PressReleasePage.aspx?PRID=1579129

[viii] https://www.bloombergquint.com/global-economics/jindal-to-seek-investors-for-3-3-billion-india-hydel-project

[ix] https://economictimes.indiatimes.com/industry/energy/power/states-may-soon-get-hydro-power-purchase-targets/articleshow/75135313.cms