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Small hydro projects, small hydro projects india, shp, mini hydro, micro hydro, Three hydro power projects of 2120 MW capacity in Jammu and Kashmir in joint venture between State Power Development Corporation (JKSPDC), National Hydroelectric Power Corporation (NHPC) and the Power Trading Corporation of India (PTCI), have been cleared !!



                                                           TABLE OF CONTENTS



























"Hydropower (Large, Small and Pumped Storage) in India, Market Outlook to 2025, 2013 Update - Capacity, Generation, Regulations and Company Profiles” is the latest report from GlobalData, the industry analysis specialists that offer comprehensive information and understanding of the hydropower market in India. The report provides in depth analysis on global renewable power market and global hydropower market with forecasts up to 2025. The report analyzes the power market scenario in India (includes thermal conventional, nuclear, large hydro and renewables) and provides future outlook with forecasts up to 2025. full report



Small hydro is the second largest renewable energy contributor to electricity production in India (after wind). From about 1500 MW end of 2002, by end of 2010 the installed capacity had grown to about 2800 MW, growing at a CAGR of about 8% for the period.


Total available potential

Estimated potential - 15,000 MW

Identified 15,384 MW through 5718 sites (Average 2.7 MW per site)


Exploited potential

Installed capacity is 3421.51 MW (13.3% of total) as of Aug 2012

Projected capacity

ü  Target capacity addition in 11thplan (2007-12): 1488 MW

ü  Installed capacity grew from 2403 MW in 2009 to 3421.5 in 2012. (CAGR of 12.5% and 9% from 2004-2009). Expected to grow even faster, at 13% for 2010-15.


Government incentives

ü  PPAs with attractive tariffs

ü  Capital subsidies

ü  Exemptions from taxations and duties

ü  No techno-economic clearance is required for projects up to Rs.250 crores ($40 million) investment

ü  17 States have so far announced their policies to invite private sector to set up SHP projects.

ü  Over 2600 MW capacity SHP sites offered/allotted to private sector by the States to set up SHP projects

ü  MNRE has created special facilities for SHP performance testing



Small hydro investment in India grew significantly since 2008 - Rs. 2425 crore in 2009 and Rs. 2645 crore in 2010 (about 15% of total RE investments), compared to just Rs. 617 crore in 2007



ü  Delays and long timelines for approvals

ü  Long distances between generation stations and consumption centers lead to poor efficiency of transmission and distribution

ü  Geological and social uncertainties

ü  Regulatory challenges


Cost of power generation

Rs. 2-3/kWh. This cost includes O&M costs, insurance, depreciation, and loan repayment costs











Oil major ONGC is showing interests in participating in hydel power projects by expanding the scope of the ONGC-Tripura Power Company Ltd 


ONGC Tripura Power Company Ltd is a joint venture between ONGC, Infrastructure Leasing and Financial Services Limited (IL&FS) and the Government of Tripura for implementation of the 726.6 MW CCGT thermal power project at Palatana in Tripura to supply power to the power deficit areas of the north-eastern states. After the meeting, Bahuguna asked the power department toprepare a blue print for all those power projects which has received clearances from the union ministry of forests and environment.

He asked them to hold another meeting with ONGC officials for the development all these projects.

Faced with acute paucity of funds, Uttarakhand has been trying to attract private players in the hydropower sector by offering joint ventures with Uttarakhand Jal Vidyut Nigam, the state-run power generation company. The sector received a severe jolt after the Centre scrapped several big hydel projects including NTPC’s 600 MW Lohari Nagpala project on Bhagirathi river on environmental and religious grounds. more


Sources within NHPC sat  that the Corporation has turned down the proposal of the J&K state government to return Salal, Uri and Dulhasti Hydroelectric Power Projects to the state on the depreciated cost. more  22 may12


Steady growth in small hydro power; however significant challenges remain..." ICRA



While India‘s total installed capacity for small hydro power (SHP) units reported a significant increase from 1,909 MW as in March 2006 to 3,300 MW as in January 2012, thereby taking up SHP‘s share of the country‘s total installed renewable energy (RE) capacity to almost 15%, considerable potential1 still remains untapped across States with favourable SHP potential.

The low utilisation of the country‘s SHP potential is attributable to several factors, including: challenges in setting up plants in difficult and remote terrain; delays in acquiring land and obtaining statutory clearances; inadequate grid connectivity; and high wheeling and open access charges in some States.

SHP plants have certain inherent advantages: they generate "clean energy" at a competitive cost; they have features that make them suitable for peaking operations; they are less affected by rehabilitation and resettlement (R&R) problems vis-à-vis large hydro power plants; they can meet the power requirements of remote and isolated areas; and they use mature and largely indigenous technology.

Recent amendments to grid code augur well for SHP plants
In the matter of grid integration, the recent amendments in Grid Code are a positive for SHP plants with less than 10 MW capacity. As per the amendments, renewable energy power plants including SHP plants with installed capacity of less than 10 MW (excluding higher capacity SHP plants and nonfossil fuel based cogeneration plants) will be treated as ��-MUST RUN‘ power plants and will not be subjected to ��-merit order dispatch‘ principles. Also, the allowed variation of up to ( /-) 30% of the schedule and the burden of applicable Unscheduled Interchange (UI) charges to be shared among system users on an all-India basis and not on project developers and permission to fine-tune schedules (based on the forecast) as close as three hours before the actual generation should facilitate further integration of SHP projects. source

The risk of there not being enough water in the stream — the ‘hydrology risk’ — is the “single largest risk” that a small hydro project faces, says a study of the rating and analysis agency, ICRA.


The study went into the question of why small hydro projects — projects of less than 25 MW capacity — have not been happening on a scale consistent with the potential in India. It found out that after ‘hydrology risk’, the risk of ‘containment of capital cost’ was the second biggest stumbling block.

As of January 2012, there were small hydro projects (SHPs) of a total capacity of 3,300 MW in the country, as against the estimated potential of 15,384 MW. It is estimated that half the potential exists in Himachal Pradesh, Uttarakhand, Jammu & Kashmir and Arunachal Pradesh. But, surprisingly, most of the SHPs (26 per cent by capacity) are in Karnataka.

Mr S. Chandrasekhar, Managing Director, Bhoruka Power, a company that owns 150 MW of SHPs, agrees with ICRA on ‘hydrological risk’. He notes that while there is sufficient data on water flows in large rivers, there is practically no such data on flows in the smaller rivers and streams, where typically a SHP might be put up.

“We have to adopt the ‘synthetic model’”, Mr Chandrasekhar told Business Line, referring to the water-flow data arrived at by taking rainfall statistics and making adjustments to it. The ICRA report also noted that, on the other hand, the recent amendments in the Indian Grid Code would give a fillip to the construction of SHPs. Basically, the grid code says that SHPs must be “treated as ‘must run’ under merit order despatch”, which means that the utilities should buy the power the SHPs generate even if lower cost electricity is available from other sources. source



NHPC Limited (formerly National Hydroelectric Power Corporation) is an Indian electric utilities company that was incorporated in the year 1975 with an authorised capital of Rs 2,000 million and with an objective to plan, promote and organise an integrated and efficient development of hydroelectric power in all aspects.

Later on NHPC expanded its objects to include other sources of energy like Geothermal, Tidal, Wind, etc.


At present, NHPC is a schedule 'A' Enterprise of the Govt. of India with an authorised share capital of Rs 1,50,000 million.

In 2009-2010 NHPC made a profit after tax of Rs 2,090 crores (Rs 20.9 billion). An increase of 94 per cent than the previous year profit of Rs 1,050 crores (Rs 10.5 billion).

NHPC is among the top 10 companies in India in terms of investment. Department of Public Enterprise, Government of India recently conferred prestigious Miniratna status to it.

Small hydro is the development of hydroelectric power on a scale serving a small community or industrial plant. The definition of a small hydro project varies but a generating capacity of up to 10 megawatts (MW) is generally accepted as the upper limit of what can be termed small hydro


Small hydro can be further subdivided into mini hydro, usually defined as less than 1,000 kW, and micro hydro which is less than 100 kW. Micro hydro is usually the application of hydroelectric power sized for smaller communities, single families or small enterprise.

Small hydro plants may be connected to conventional electrical distribution networks as a source of low-cost renewable energy. Alternatively, small hydro projects may be built in isolated areas that would be uneconomic to serve from a network, or in areas where there is no national electrical distribution network. Since small hydro projects usually have minimal reservoirs and civil construction work, they are seen as having a relatively low environmental impact compared to large hydro.

Small hydro is often developed using existing dams or through development of new dams whose primary purpose is river and lake water-level control, or irrigation. Many companies offer standardized turbine generator packages in the approximate size range of 200 kW to 10 MW. These "water to wire" packages simplify the planning and development of the site since one vendor looks after most of the equipment supply. Since non-recurring engineering costs are minimized and development cost is spread over multiple units, the cost of such systems is improved. While synchronous generators capable of isolated plant operation are often used, small hydro plants connected to an electrical grid system can use economical induction generators to further reduce installation cost and simplify control and operation.



Hydro Power Project Classification                            

Hydro power projects are generally categorized in two segments i.e. small and large hydro. In India, hydro projects up to 25 MW station capacities have been categorized as Small Hydro Power (SHP) projects.  While Ministry of Power, Government of India is responsible for large hydro projects, the mandate for the subject small hydro power (up to 25 MW) is given to Ministry of New and Renewable Energy. Small hydro power projects are further classified as

Class Station Capacity in kW
Micro Hydro Up to 100
Mini Hydro 101 to 2000
Small Hydro 2001 to 25000

SHP qualified for CDM benefits


* Small Hydro Power Project



*  Small Hydro in Tamilnadu

  • Small hydro is the third largest renewable energy contributor to electricity production in TN (after wind and biomass).
  • Estimated potential – 659.51 MW through 197 sites for small hydro in Tamil Nadu
  • Installed capacity is 94.05 MW as of Nov 2011. In addition, 6 more projects totaling 33MW is in the process of getting commissioned.
  • TANGEDCO has also proposed to establish small hydroelectric projects of capacity less than 25 MW   in the run of river scheme with total capacity of 110 MW.
  • A number of mini/micro hydro projects are being set up in remote and isolated areas. A number of tea garden owners are also setting up micro hydel projects to meet their captive requirement of power.
  • All SHPs that are currently in operation are state owned and there is only one small hydro project of 350kW capacity that is a private sector investment.
  • Organizations such as the Water Mill Associations, cooperative societies, registered NGOs etc., are being encouraged to install watermills in their areas for electricity generation to meet small scale electrical requirements of villages.
  • Source TNERC Paper?t=b3R8bTRqcGdrfDAKCuVULag0x-UfS6e6_pMw  Additional information about small hydro in tamilnadu is given here.

Small Hydro Power Programme

Small Hydro Power ( SHP) Programme is one of the thrust areas of power generation from renewable in the Ministry of New and Renewable Energy.  It has been recognized that small hydropower projects can play a critical role in improving the overall energy scenario of the country and in particular for remote and inaccessible areas. The Ministry is encouraging development of small hydro projects both in the public as well as private sector. Equal attention is being paid to grid-interactive and decentralized projects.

Aim:    The Ministry’s aim is that the SHP installed capacity should be about 7000 MW by the end of 12th Plan. The focus of the SHP programme is to lower the cost of equipment, increase its reliability and set up projects in areas which give the maximum advantage in terms of capacity utilisation.

Potential: An estimated potential of about 15,000 MW of small hydro power projects exists in India. Ministry of New and Renewable Energy has created a database of potential sites of small hydro and 5,415 potential sites with an aggregate capacity of 14,305.47 MW for projects up to 25 MW capacity have been identified



CESC Ltd, an RP-Sanjiv Goenka Group company, has acquired two hydroelectric power projects of India Bulls group totaling 146 mw in Arunachal Pradesh


CESC has acquired the entire equity shares ofPachi Hydro Power Projects Ltd and Papu Hydro Power Projects Ltd, both belonging to India Bulls Group.

Pachi Hydro is a special-purpose vehicle established to undertake the 56 mw Phangchung Hydro Electricity Project in East Kameng district of Arunachal Pradesh. The 90 mw Papu Hydro Electricity Power Project is also located in East Kameng district, Arunachal Pradesh.

CESC at present has undertaken a 90 mw hydel power project in Arunachal Pradesh in West Sian district. The project is under development and will be built across Siom River near village Jarong.

CESC's plans in hydroelectric project now totals 236 mw. At present, CESC has a total thermal power generation capacity to 1225 MW. Two coal-based thermal power stations of 600 mw each are under construction at Chandrapur, Maharashtra and Haldia, West Bengal. The Chandrapur project is expected to be commissioned next year. more


“Power demand has gone up this summer compared to previous years. The average demand is between 2,700 to 2,800 MW currently in the state, which is much higher than OERC (Odisha Electricity Regulatory Commission) approval of 2,635 MW,” said P K Pradhan, commercial director with Gridco.  May 2012


The Arunachal Pradesh government has signed a number of MoUs with private firms under the public-private partnership model for as many as 13 hydro-power projects in the two districts, seven on the Lohit and rest on its tributaries. "We are not against tapping hydro-power potential as a national asset for revenue. But the process of signing MoUs under the PPP is faulty," Khapriso Krong, a former minister residing in Tezu, says. 

The public hearing for Lower Demwe, the first project in the cascade arrangement, had its share of problems. Residents complain that not everybody was given a chance to raise their objections. more








Small hydro sector should be given status of zero/nominal duty under GST, says FICCI



*  Maharastra state government aims to increase the power generation through private small hydro power (SHP) projects from the present 9 megawatts (mw) per year to 30 megawatts


“Nearly 53 megawatts of power has been generated by the SHP projects in the last six years. We want to achieve an annual target of generating 30 megawatts, in the next five years’ span,” Modak said.

The bureaucrat was speaking at the seminar on “Implementation of Hydro Projects through private participation” held at the Institution of Engineers Hall in Shivajinagar on Tuesday.

According to him, nearly 150 SHP projects will be working towards power generation in this period, out of which 50 projects have been installed and 50 are in the pipeline. Modak cited the problems of land acquisition, delay in issuing licence and other issues that act as barriers in the SHP projects.

“By accelerating the private projects of power generations and simplifying the licensing process, we aim to achieve our target efficiently. The Maharashtra government’s hydro policy 2005 through which SHP projects are being constructed and completed by private entrepreneurs is also helping in achieving the objective,” he said. source



MNRE Report 


Small Hydro Project development during 12th Plan

1.     Capacity addition in major potential States during 11th Plan period
2.     Allotments made by the States to private sector and overall expected capacity addition.
3.     Targets of capacity addition during 12th Plan


Level of subsidy for SHP projects during 12th Plan for

1.     Government Sector projects
2.     Private Sector projects
3.     Support for R&M of old projects
4.     Any new area for support by MNRE

Policy issues in developing Private Sector projects

1.     How to reduce implementation time for projects.
2.     Clearances required for SHP projects and how to simplify the procedures
3.     Creating Data base of private sector projects
4.     Monitoring of private sector projects
5.     Collection of generation data

Strategy for developing micro hydel projects / watermills

1.     Review of existing MNRE scheme
2.     Suggestions for enlarging scope of micro hydel / watermill projects
3.     Considering funding livelihood activities with watermills
4.     Strategy for financing micro hydel projects (community model)
5.     Involvement of private  sector to  set up  micro hydel  projects  as  social responsibilities

R &D areas in SHP

1.     Launching of Standards for small hydro
2.     Hydraulic turbine test laboratory at AHEC, IIT, Roorkee
3.     Development of model projects using different velocity turbines
4.     Collection of catchment based hydrological information
5.     Standard designs for micro hydel projects
6.     Design of second generation watermills

1.      The   Minister   for   New   and   Renewable   Energy   took   a   meeting   with   the   Ministers–in-Charge of renewable energy of all the North Eastern States on 2nd July, 2011. The NE States were of the opinion that MNRE subsidy for SHP projects is extremely low and it should be 90% of the actual project cost rather than based on normative cost. The suggestions made in the meeting have been incorporated in the report of the Sub-Group.

Hydro Power in India

2.          Hydropower represents use of water resources towards inflation free energy due to absence of fuel cost with mature technology characterized by highest prime moving efficiency and spectacular operational flexibility. Out of the total power generation installed capacity in India of 1, 76,990 MW (June, 2011), hydro power contributes about 21.5% i.e. 38,106 MW. A capacity addition of 78,700 MW is envisaged from different conventional sources during 2007-2012 (the 11th Plan), which includes 15,627 MW from large hydro projects. In addition to this, a capacity addition of 1400 MW was envisaged from small hydro up to 25 MW station capacity. The total hydroelectric power potential in the country is assessed at about 150,000 MW, equivalent to 84,000 MW at 60% load factor. The potential of small hydro power projects is estimated at about 15,000 MW. While Ministry of Power in Government of India deals with large hydro projects, the responsibility of small hydro power development rests with Ministry of New and Renewable Energy.

Small Hydro Power Situation Analysis

3. The estimated potential of power generation in the country from small / mini hydel projects is about 15,500 MW. Out of this potential about 50% lies in the States of Himachal Pradesh, Uttarakhand, Jammu & Kashmir and Arunachal Pradesh. In the plain region Maharashtra, Chhattisgarh, Karnataka and Kerala have sizeable potential. State-wise details of the potential are given at Annexure. Small hydel projects normally do not encounter the problems associated with large hydel projects of deforestation and resettlement. The projects have potential to meet power requirements of remote and isolated areas. These factors make small hydel as one of the most attractive renewable source of grid quality power generation. The MNRE has taken a series of steps to promote development of SHP in a planned manner and improve reliability & 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 efficient designs of water mills for mechanical as well as electricity generation and setting up of micro hydel projects for remote village electrification.

4. The SHP programme in India is now by and large private investment driven. 23 States have announced their policies to invite private sector to set up SHP projects. CERC had issued guidelines for determining tariff of power generated from SHP projects and SERCs, in their respective States, are deciding issues relating to tariff and other conditions. Generally, the projects are economically viable and private sector is showing lot of interest to set up SHP projects. The viability of these projects improves with increase in capacity of the project. Most of the States with reasonably high SHP potential are now interested in allotting the projects to the private sector for implementation and operation. Since SHP projects have reasonably good economic   viability,   a   number   of   financial   institutions   and   banks   are   ready   to   finance   these  projects. Accordingly, a major part of capacity addition and exploitation of SHP potential in future is expected from private sector projects. With a capacity addition of 1400 MW (target for the 11th Plan), the total installed capacity from SHP projects would be 3375 MW at the end of 11th Plan. One of the major limitations of small hydro project is long implementation time and statutory clearances associated with the projects. There is a need to systematically address issue of minimizing implementation time for SHP projects. A number of hilly States are interested in developing micro hydel projects and watermills for electrification of remote areas. Tea / Coffee garden owners and NGOs have also shown interest in installing micro hydel projects.

II        Growth So Far

5. The subject of small hydro between 3 to 25 MW was transferred from Ministry of Power to the Ministry of New and Renewable Energy in November, 1999. Prior to this, the Ministry was dealing with SHP projects up to 3 MW. In the year 2000, the total installed capacity of small hydro projects (up to 25 MW) was 1275 MW. There has been an increase of about 150% in the installed capacity in the last 10 years. A continuous and steady growth can be seen in the SHP sector. During the 9th Plan, a capacity of 269 MW was added. This had increased to 536 MW during the 10th Plan and it is expected that it would reach to 1400 MW during the 11th Plan. The average capacity addition of 55 MW per year during the 9th Plan has increased to 280 MW per year during the 11th Plan.

6. During the first four years of the 11th Plan, 119 Small Hydro Power projects aggregating 1066 MW capacity have been commissioned both in the commercial & State Sector and projects aggregating to about 350 MW are expected to be completed during 2011-12. The Ministry has supported 146 SHP Projects in the Government sector aggregating to 353 MW capacity. 292 private sector SHP projects with an aggregate capacity of 1486 MW have been set up. The total installed capacity of small hydro projects, as on 30th June, 2011, is 3105 MW and projects of about 1192 MW are in various stages of implementation. State-wise details are given at Annexure. Micro hydel projects and watermills have also shown a renewed interest in last 3-4 years. The State of Uttarakhand has launched a programme for systematically developing watermills. About 600 water mills have been installed during the first four years of the 11th Plan.

7. The Ministry has made two area specific projects mainly focusing on small / micro hydel projects. One project is being implemented to electrify / illuminate 1058 border villages of Arunachal Pradesh. This project involves completion of 45 on going and 107 new small / micro hydel projects. The 2nd project is ‘Ladakh Renewable Energy Initiative’ wherein 30 small / micro hydel projects are being set up in Leh and Kargil districts.

III      Analysis of growth in 11th Plan period

8 .       The total installed capacity of SHP projects at the beginning of the 11th Plan was 1975 MW from 602 projects. 1066 MW capacity has been added against a target of 1050 MW in the first four years of the current Plan. This year, about 350 MW is expected to be achieved. The target of 1400 MW for the 11th Plan is expected to be achieved in full. The financial allocation for the small hydro programme for the 11th Plan was of Rs. 700 crore. The year-wise details of funds provided during the Plan Period, including funds for the Special Package for the Arunachal Pradesh project is as follows:




Target (MW)

Achievement (MW)

Allocation (RE) (Rs. in Crore)

Expenditure (Rs. in Crore)





















Total in first 4 years of 11th Plan








(as on 30.6.11)



(as on 30.6.11)

9. An evaluation of SHP schemes was carried out during 2008-09 by MITCON, Pune. The study had recommended continuation of schemes under SHP programme and subsidies for both public and private sector projects. After taking into consideration suggestions of the evaluation study, modified schemes were announced for micro hydel projects up to 100 kW and water mills in February, 2009 and for other components in November, 2009.

10. The implementation of SHP projects is governed by the State policies and the potential sites are allotted by the State Governments to private developers. The process of allotment of sites by the States and statutory clearances including land acquisition, forest clearance, irrigation clearance etc. takes long time. The implementation of project is also affected due to difficult terrain and limited working season. The other problem relates to inadequate evacuation facilities and transmission links. The project monitoring system is not adequate in the States.

11. The scheme to support of micro hydel and watermills was revised in February, 2009. After this, there has been considerable interest of State like Uttarakhand, J&K, and Karnataka to take up this activity.     The Ministry had sanctioned about 1500 watermills of which more than 600 watermills have been already installed. Tea and Coffee garden owners are also showing interest in directly implementing micro hydel and watermill projects.

12.       During the 11th Plan, the Ministry has stepped up its efforts towards regularly interacting with all potential States, developers and monitoring of projects. Meetings at the level of Minister and Secretary have been held to resolve the issues. The States have been asked to draw specific plan for systematically harnessing SHP potential and increase the pace of implementation of projects. It is suggested that basin wise plan to evacuate power from SHP projects should developed in the State so that the projects do not encounter problem of evacuation of power when they are completed. The transmission links and evacuation facilities should be closely linked with the progress of SHP projects.

IV       SWOT analysis


13.       Electricity generation from hydro projects is inflation free due to absence of fuel cost. It involves mature technology with very high prime moving efficiency and operational flexibility. Small hydro projects normally do not encounter the problems associated with large hydel 
projects of deforestation and resettlement.         The projects have potential to meet power requirements of remote and isolated areas. These projects have the potential to turn around economic activities in villages and remote areas. These factors make small hydro as one of the
most attractive renewable source of grid quality power generation. The SHP programme in the country is now private sector driven. The projects are viable and 23 States of the country have policies in place towards private sector participation to set up SHP projects. The country has good manufacturing base and almost all equipment requirements are indigenously meet. The technology to generate power from SHP projects is fully mature in the country and the equipment normally has efficiency of more than 85%. The capacity utilization factor in the projects could be as high as 95% subject to availability of water in river / canal. The electricity generating watermills have proved to be quite useful in providing electricity to the owner of the watermill. In some cases, they have also shared electricity with some more houses. The
electricity is also used for providing various services to the villages.


14.       Water being State subject, the SHP projects are governed by the State policies and the potential sites are allotted by the State Governments to private developers. The projects involve time consuming process for allotment of sites by the States and statutory clearances including land acquisition, forest clearance, irrigation clearance etc. The projects have relatively longer gestation period in completing the projects due to difficult terrain and limited working season. In addition, the location of the projects is remote and evacuation facilities for power generated from projects are very weak.


15.       The estimated potential for power generation from small hydro projects in the country is over 15,000 MW. So far only 19 per cent of the identified potential in the country has been exploited. There has been an increase of about 150% in the installed capacity in the last 10 years. A continuous and steady growth can be seen in the SHP sector. The average capacity addition of 55 MW per year during the 9th Plan has increased to 280 MW per year during the 11th Plan. The States of Arunachal Pradesh, Himachal Pradesh, Jammu & Kashmir and Uttarakhand have highest potential for development of small hydro. All the four States have policy to invite private sector to set up SHP projects. The State of Karnataka has allotted 300 projects of about 2000 MW, Chhattisgarh has allotted 70 projects aggregating to 685 MW, Maharashtra has allotted 41 projects of 135 MW and the State of Odisha has allotted 29 SHP projects of 369 MW to the private sector. These States can contribute a lot in providing opportunities to harness this potential.


16.       Hydro rich States are normally self-sufficient in power generation capacity. Maximum generation from hydro projects is during monsoon months and this is the time when power requirement is comparatively less. Hence the States may be reluctant to sign long term PPAs with the developers. Setting up of SHP projects does have some impact on environment as these projects interact with water and land. SHP projects are normally set up in hilly areas. The land required to set up project may have some trees or forest cover. Hence, the project would require compulsory afforestation and forest clearance. Water of the river / canal is also diverted for a limited distance to generate electric power and hence this may also have some impact on the environment. Aquatic life (fish etc) may also have some impact of the project. This apart, the activity during construction of the SHP project would also have impact on the environment. Sometimes SHP developers do face objections from the local community. Normally, the issues relate to land, employment of local people and contribution towards local area development. Time taken in obtaining various clearances at the State level, transfer of land, forest clearance, availability of reliable hydrological data, timely creation of suitable power evacuation facilities are the main issues which require streamlining and attention of the State Government for faster development of SHP projects. If these are not timely addressed, they can be threat to the growth of SHP sector.

V         Recommendations for Policy

a) Capacity Addition during 12th Plan

 17.      The Sub-group reviewed the progress and growth in the SHP sector during 10th and 11thPlan, status of prospective sites allotted to private sector in major  States, policy provisions in various States including RPO and REC etc. The Sub-group recognised and recommended that:

(i)       A large part of capacity addition of SHP projects during 12th  Plan would comefrom private sector projects. The Ministry should review State Policies to ensure that the momentum of private sector participation in SHP is not lost.

(ii)      In last 3-4  years, most of the projects have come up in HP, Punjab, Karnataka,and Maharashtra. There is a need to encourage more States and bring them on board for developing more Government / Private sector projects. Focus is to be given to J&K and Uttarakhand in North, Tamil Nadu and Kerala in South, M.P and Chhattisgarh in Central and Sikkim and Mizoram in North East of India.

(iii)     State   wise,   year   wise   targets   should   also   be   fixed   in   SHP   Programme   with identification of projects likely to be commissioned in following 3-4 years. This should be done in consultation with States and project developers.

(iv) Project wise monitoring should start at State as well as MNRE level.

(v)      The Ministry may consider registration and on- line submission of capital subsidy applications for private sector projects.

Subsidy for SHP projects during the 12th Plan

18      MNRE subsidy is playing very important and catalectic role in covering risk and making SHP projects economically viable. The sub-group recommended that the MNRE subsidy should be continued in the 12th Plan also. In this regard following has been recommended:

(i)       There has been an increase in cost of SHP projects. From Rs.6.5 to Rs.7.0 crore per MW in the year 2008-09, it is now in the range of Rs.7.5 to Rs.8.5 crore per MW.   Keeping this in view, MNRE subsidy may be increased by 25%.

(ii)      In the current MNRE scheme, the subsidy for incremental MWs is extremely low. This should be increased to Rs.1.0 crore per MW for government sector projects and Rs. 50 lakh per MW for private sector projects.

(iii)     In  the  meeting  taken  by  the  Minister  (NRE)  with  Power  /  RE  Ministers  of  all North Eastern States, a strong apple was made to give 90% subsidy for SHP projects in NE States based on actual project cost rather than normative cost of projects. However, keeping in view the likely financial implications, it was suggested that this may be made applicable for projects up to 2 MW capacities in NE States.

(iv)     The   scheme   for   renovation   and   modernisation   of   old   SHP   projects   may   be modified. The States should be encouraged to undertake the work in a joint sector / PPP mode. The Ministry’s scheme should also be applicable to this route as the objective should be to maximize generation from existing projects.

(c)      Potential Assessment

21.       The Sub-group noted that MNRE has constituted a working group to start the work of reassessing SHP potential in the country. The sub-group was of the opinion that this is an important step for systematically harnessing SHP potential in future. To accomplish this task the
Sub-group recommended:

(i)       The Ministry should earmark some funds for this activity during 12th plan
(ii)      To start the work, some specific areas and States may be selected for pilot work.
(iii)     Possibilities of undertaking environment impact assessment along with potential assessment may be explored.
(iv)     GIS techniques and modelling may be necessary for this work.
(v)      Hydrological information may also be collected from on-going SHP projects for validation of modelling of potential.
(vi)     The Ministry may extend financial support to States for undertaking this work.
(vii)    MNRE    may    consider    creating    Regional    centres    for    small    hydro    potential assessment and identification of potential sites.

(d)     Micro Hydel projects and Water Mills

19.       The Sub group recommended that the scope of micro hydel and water mill scheme of the Ministry should be enlarged. Micro hydel projects up to 250 KW should be covered under the scheme. The water mill support should also include support for economic activities. In this regard it was recommended that:

(i)       The current level of Subsidy may be increased by about 25%
(ii)      Tea   /   coffee   garden   owners,   NGOs,   Educational   institutions   may   be   directly supported under the scheme. 
(iii)     Private   sector   SHP   developers   may   be   asked   to   set   up   micro   hydel   projects exclusively to meet power requirements of villages. The scheme should support this activity.
(iv)     The scheme should  also support canal / river based velocity turbine projects or any other innovative idea. The financial support may also be extended to turbine manufacturers, in case they are interested in setting up 1 or 2 demonstration projects.

VI      Likely capacity addition during 12th Plan

20.      The sub-group felt that a capacity of 2000 MW can be added during the 12th plan period,

However, with some aggressive steps, facilitating time bound clearances and close monitoring, a capacity addition of about 2500 MW can also be achieved. For micro hydel and water mills the sub- group recommended a target of 250 micro hydel projects aggregating to 25 MW and 2000 water mills for the plan period. The Sub-Group recommended following year wise targets for the programme:


Sl. No


Physical Target



350 MW



400 MW



400 MW



450 MW






2100 MW

VII     Areas for Research and Development support and approach thereof

21.      The      Sub-Group      discussed      in      detail      research      and      development      activities      and Manufacturing base for equipments used in SHP projects in the country. It was noted that the current manufacturing capacity is of about 1500 MW per year with in all the manufacturers. About 70% of the capacity is used for export. All major equipment manufacturers of Europe are represented in India. Small hydro is technically matured sector with an experience of over 100 years.         The    equipment    used    in    small    hydro    projects     is     normally    over    80%    efficient.

Advancements in the sector are of the nature of technical up-gradation.    The control systems in  SHP projects have seen a good advancement in the last 10 – 15 years. The electric / electronic controls are now small and more reliable with higher degree of automation. These are being achieved by the manufacturers through a mix of indigenous efforts and to some extent through technical collaborations.

22.      The   Ministry   is   supporting   R&D   activity   in   this   sector   mainly   to   create   testing   and

standardization facilities. A set of 31 standards / manuals/ guidelines are being developed by AHEC, IIT Roorkee on various aspects / components of SHP projects. These would lead to more reliable and cost effective SHP projects. On-site testing facilities have been created to facilitate performance testing of SHP stations. The Ministry has made this mandatory for availing subsidy. A real-time digital simulator has been set up at AHEC to provide training to SHP operators. Now, a hydraulic turbine test laboratory is being set up which would act as an independent test laboratory for various turbine models and would also help in testing new designs of hydraulic turbines.

i.     The sub group noted that the work of preparing 31 Standards/ guidelines by AHEC is now   near   completion.   It   was   recommended   that   this   work   should   be   completed   by December, 2011.
ii.     The Ministry should support development of velocity turbine and extra low head turbines for canal / river based micro hydel projects.iii.     A plan to optimally utilise the hydraulic turbine laboratory being set up at AHEC should be drawn.
iv.     Keeping in view the developments in low head turbines, AHEC should set up a test rig so hat facility of testing such turbines

VIII.        Requirement of Funds

23.      The    Sub-Group    made    a    broad    assessment    of    financial    requirements    for    the    SHP programmes. It was felt that there should be a planned and systematic approach for potential and resource assessment, for which funds should be allotted in the plan period. The Sub-group noted that there is a separate group looking in to financial requirements for developing transmission network for renewable energy projects. Taking in to consideration the funds required for Central Financial Assistance under various schemes of SHP, requirement under Arunachal Pradesh and Ladakh projects, the sub-group recommended following requirement of funds for the programme for the 12th Plan Period.


Sl. No


Financial Requirement (Rs. in crore)




100.00   ( Ar.Prd) 100.00   (Ladakh)



180.00 140.00 (Ladakh)













IX.           Areas for policy changes

24.           The sub-group recommended that MNRE should come out with guidelines which

should be mandatory for the States for systematically developing SHP potential including main parameters for deciding capacity of the project, minimum water requirement in the stream, local area development strategy etc.

i.     The  Ministry  should  start  activity  for  collecting  hydrological  information  with  the involvement of State Government with a view to develop future projects in minimum possible time.

ii.     The  procedure  for  obtaining  clearances  required   for  SHP  projects  should  be  made online and MNRE should support the States to get this implemented.

iii.     MNRE     should     assist     in     organizing     State     level     and     district     level     orientation programme to sensitize local authorities for the benefits of timely implementation of projects.

iv.     Small hydro power sector is faced with shortage of trained and skilled manpower at all levels. In view of vast potential and scattered sites across the mountain region of the country, there is a need to train manpower at different level by introducing courses at Diploma and ITI level.

X.       Action Plan

25.      The aim of the programme is to increase current rate of capacity addition of 300 MW per year to 500 MW per year in next 2-3 years and facilitate SHP developers to reduce implementation time of the projects. The will be achieved through close monitoring of implementation of projects, discussions with the States to streamline procedures, discussions with  the transmission corporations  in the  States  to  develop systematic plan of evacuation and also to encourage States like Arunachal Pradesh, Chhattisgarh, J&K, Kerala, Madhya Pradesh and Maharashtra to allot new sites to take up new projects. The gestation period to set up a small hydro project is about 4-5 years including time required for survey & investigation, DPR preparation, various clearances and construction of project at site. Following specific steps have been identified to achieve increase in rate of capacity addition from SHP projects:

  • State-wise identification of projects which are likely to be commissioned during next 2-3 years and the 12thPlan.
  • Strengthen monitoring mechanism in every potential State to monitor progress in these projects; identification of problems and re-dresser mechanism.
  • Quarterly review meetings by MNRE with States and SHP developers.
  • Project-wise feedback mechanism from the developers

26.       Any effort to accelerate capacity addition from SHP project done today would result the capacity addition only after 4 years or so. With a reasonable growth rate it is expected that this would go to about 450 to 500 MW per year in the 3rd / 4th year of the 12th Plan.

XI. Likely Social, Economic and Financial gains

27.       The small hydro programme has two distinct components. One, SHP projects in MW size capacity range, which are grid connected and normally developed by the State Government or by a private developer. These projects are instrumental in increasing installed capacity of 
power generation in the State and eventually overall capacity addition in the country. Apart from this benefit, where the project is being developed there is a series of socio-economic activity in the project area which helps in overall development. Since the power project is a 
permanent asset in remote area, it provides sustainable economic activity and employment opportunity. The other component of SHP programme is of decentralized power and energy generation through micro hydel and watermills. These applications have the potential of 
developing local entrepreneurs and meeting energy requirements of a village / community. A small / micro hydel project and watermills have the potential to provide sustainable economic strength to a village community.



(AS ON 30.6.2011)


Sl. No.



Projects Installed

Projects under Implementation


Total Capacity(MW)


Capacity (MW)


Capacity (MW)


Andhra Pradesh








Arunachal Pradesh
























































Himachal Pradesh








































Madhya Pradesh
















































































Tamil Nadu
















Uttar Pradesh
















West Bengal








A&N Islands

















Srinagar, June 14: Decks have been cleared for execution of three hydro power projects of 2120 MW capacity in Jammu and Kashmir in joint venture between State Power Development Corporation (JKSPDC), National Hydroelectric Power Corporation (NHPC) and the Power Trading Corporation of India (PTCI).
The Registrar of Companies, government of India, has formally okayed setting up of joint venture company - Chenab Valley Power Projects Pvt Ltd (CVPPPL) - under which three mega power projects - Pakal Dul (1000 MW), Kiru (600 MW) and Kawar (520 MW) - are to be executed. The certificate of incorporation was issued on June 13, 2011.
“We have received the certificate of incorporation for the new company. Work on the projects would be taken up soon,” chairman, Board of Directors, CVPPPL, MY Khan told Greater Kashmir.
The incorporation of the CVPPPL follows the promoters’ agreement among JKSPDC, NHPC and PTC India Ltd on December 31, 2010. Scheduled for completion in next six years, the projects are likely to cost more than Rs 15000 crore.
“We will be taking up execution of Pakal Dul first followed by Kiru and Kawar for which the global tenders will be invited,” said Khan.
The paid-up equity share capital in the company shall be contributed by NHPC, JKSPDC Ltd and PTC in the ratio of 49:49:2 respectively. “Of total power generated from the projects the share of state shall be 62 percent,” Khan said.
The state would have an assured share of about 1179 MWs of power with the first right of refusal for the remaining 941 MWs from the entire project, said a PDC official, adding it would to a greater extent address the power requirements of J&K.
Against the requirement of more than 1500 MWs the local power generation is around 750 MWs including 450 MWs produced from Baghliar-I. State regularly imports more than 750 MWs of energy from northern grid to meet its local energy requirements. The import has been constantly draining the meagre finances of the state. Last year JKs Power purchase bill had whopped up to Rs 2,500 crore and is expected to swell up to Rs 3000 for this financial year.
In May 2008, the state government had taken a decision in New Delhi in consultation with the Union Power Ministry to float the Chenab Valley Power Development Corporation (CVPDC), now rechristened as CVPPPL, to exploit Chenab basin water resources for power generation. The decision was taken at a meeting attended by the then Union Minister of State for Power, Jairam Ramesh, the then J&K Power Minister, Babu Singh, the then Secretary PDD, Sandeep Naik, and the then Resident Commissioner New Delhi, S V Bhave.
On October 10, 2008, MoU was signed between the NHPC, JKSPDC and PTC for setting up the joint venture company under the Companies Act 1956 to construct, commission and operate the power projects after obtaining approval from the Government of India and the Jammu and Kashmir Government.
On June 13, 2009, the state government ratified the MoU without any amendment. The approval was accorded under cabinet decision No. 168.
As per the MoU the JKSPDC would have a share of not more than 49 percent while the NHPC would have share of not less than 49 per cent in the new company. Several trade bodies, civil society groups and political parties had opposed this MoU clause. They argued that “not more than 49 percent” would mean the investment by the state-owned JKSPDC would be restricted to anything between zero and 49 per cent even as it would always find itself handicapped for want of money.
Pakal Dul project is to be constructed on river Marusudar in Warwan-Marwah area of district Kishtwar and is likely to cost Rs 5,511.83 crore. Kiru project is planned as a run-of-the-river scheme over Chenab river at a location 25 km upstream of Dulhasti in Kishtwar district at a cost of Rs 2381.92 crore. Kawar project is planned as another run-of-the-river scheme over Chenab river near village Padyarna in Kishtwar district at a cost of Rs 3386.11 crore.






Alternate Hydro Energy Centre, an academic centre of Indian Institute of Technology, Roorkee was established in the year 1982 and has celebrated 2007 as silver jubilee year.

AHEC has been providing professional supports in the field of Small Hydropower Development covering planning, Detailed Project Reports, Detailed Engineering Designs and Construction drawings, Technical Specifications of Turn Key execution/equipment Supply, Refurbishment, Renovation and Modernisation of SHP Stations, Techno-Economic Appraisal, R & D/Monitoring of Projects, Remote Sensing and GIS Based Applications. Technical support to over 25 different state and central government organizations for shp development has been provided. IPPs and financial institutions are utilizing its expertise support for their SHP development.

AHEC also worked for several projects related the conservation and management of water bodies.

AHEC has developed two new designs of water mills for grains grinding

A) Patent No. 230527  "A Horizontal Open-Cross Flow Turbine"B) Patent No. 231697  "A Water Mill Used For Grinding Grains"and for mechanical/electricity generation purpose for the hilly region of the country.

AHEC has been imparting training to the field engineers and technologists through short-term training courses to create trained human resource including of neighboring and developing countries in the field of renewable energy. AHEC offers a four semester Master of Technology (M.Tech.) course in "Alternate Hydro Energy Systems". AHEC also offers three elective subjects on Renewable Energy to bachelor of engineering students of the Institute. Ph.D. Programme is also offered by AHEC in the field of "Alternate Hydro Energy". A M.Tech. programme in "Environmental Management of Rivers and Lakesfully sponsored by Ministry of Environment and Forests, GOI is being offered since 2004 to the officers state / local / central government  organizations.

AHEC has signed a Memorandum of Understanding with Government of Uttaranchal, Bihar and Himachal Pradesh, Jammu & Kashmir to work as expert agency for the development of small hydropower in Uttaranchal. It has set up Instrumentation laboratory to provide independent performance testing of hydropower plants.

A real time digital SHP simulator has been established for training and design with the support from MNRE, Govt of India and UNDP under CCFII.

AHEC has been entrusted the task of conducting performance field testing and certification of small hydropower stations using latest performance testing equipments by the Ministry of New and Renewable Sources, Govt of India.Information booklet for Performance Testing of SHP Stations : A Guide for Developers, Manufacturers and Consultants, Dec 09

Real time digital simulator for small hydropower plants for training has been estabilshed at AHEC 

  1. Real Time Digital Simulator for Small Hydropower Plants (Download brochure pdf file)
  2. Training modules (Download brochures pdf file)
  3. Training schedule (Download brochures pdf file)

     4.     Film on Simulator
Attention: Hydropower Equipment Manufacturers, independent power producers, EPC contractors, consultants and others indenting to diversify into hydropower.
(html link)
Alternate Hydro Energy Center (AHEC), Indian Institute of Technology (IIT), Roorkee is in the process of establishing an international-level hydro turbine laboratory with the intention to setup design and validation facility in addition to conducting research in hydro turbines and other hydro mechanical equipments conforming to national and international standards. AHEC is already into on-site performance testing of small hydropower stations as per IEC 60041 and IEC 6116 and other international/ national standards.

Your suggestions on desirability and nature of such facility and its possible utilization by you are solicited.

For details with suggested format (pdf file) for response please visit site or the same can be obtained by post or e-mail from the office of the Head, Alternate Hydro Energy Centre, Indian Institute of Technology, Roorkee-247 667, Uttarakhand (India), Phone 01332-274254, 285213, Fax: 01332-273517, 273560, E-mail: or

Preparing the standards, guidelines for Small Hydropower (SHP) through consultative process. We invite the experts/field engineers, field managers to express their willingness to contribute in preparing such standards/guidelines/manuals (as attached)

Model Detailed Project Reports (DPRs) for rural electrification based on Small Hydro, Solar Photovoltaic and Biomass Gasifier Technology under different geographical and population condition are available. 

Model tender specifications for remote village electrification based on Micro Hydro Power, Biomass Gasifier and Solar Photovoltaic are available.(html link)





The Jammu & Kashmir State Power Development Corporation Limited



(From 2 to 100 MW Capacity)



PROJECT AWARD conditions

Project premium

Free power


SALE OF POWER AND ROYALTY ENERGY of Jammu & Kashmir State Power Development Corporation Limited


Obligations of the IPP in Jammu and Kashmir

Commercial Operation Date (COD)

Incentives for Early Commercial Operation of the Project:-


Monitoring and Supervision of the Project in J&K

Execution of Upstream and Downstream Projects in J&K


Usage of Forest Land in Jammu & Kashmir State

Environment Clearance


Obligations of the GoJK and Corporation


Upgradation of Roads and Bridges in GoJK

Undertakings of the GoJK Corporation

Undertakings of the IPP


IPP Event of Default

Remedies Available to the IPP in a small hydro project in J&K



BOOT Build Own Operate Transfer

COD Commercial Operation Date. This would mean the date

on which the project begins commercial operation.

Concession Period Concession Period shall mean 35 years of operation of

the project by the IPP from scheduled COD.

CPSU Central Public Sector Undertaking

CSR Corporate Social Responsibility

CTU Central Transmission Utility

DPR Detailed Project Report

EIA Environment Impact Assessment

EMP Environment Management Plan

PFR Pre feasibility Report

GoJK Government of Jammu and Kashmir

GoI Government of India

HEP Hydro Electric Project

IA Implementation Agreement

ICB International Competitive Bidding

IPP Independent Power Producer

The IPPs would include any Private Investor such as

Private Ltd. Company/Public Ltd. Company/Public Sector

Undertakings/ Partnership concern/ Sole Proprietary/Cooperative

Society /State Governments other than J&K or

any other Government or non Government entity or their

joint ventures or consortiums.

JKSPDCL Jammu & Kashmir State Power Development Corporation


JKSERC J&K State Electricity Regulatory Commission

JKPDD Jammu & Kashmir Power Development Department

JV Joint Venture

LADF Local Area Development Fund

MoU Memorandum of Understanding

NHPC National Hydroelectric Power Corporation.

O&M Operation and Maintenance

PPA Power Purchase Agreement

R&R Resettlement and Rehabilitation

RFP Request for Proposal

RFQ Request for Qualification

SHP Small Hydro Power Project

SDU State Distribution Utility



J&K Hydro Electric Project Devolopement Policy


In J&K, power generation from projects of 2 MW and above is the responsibility

of the State owned Jammu & Kashmir State Power Development Corporation

Limited (JKSPDCL). Transmission and distribution is directly with the GoJK, i.e.

JKPDD. JKSPDCL was carved out of JKPDD in 1989 and incorporated as a

Company in 1995 with the mandate to plan, execute, operate and maintain all

generating stations including such stations that existed at the time of creation of

the Corporation.

The installed capacity of 21 operational powerhouses of JKSPDCL is 929.70 MW

comprising of 754.70 MW of Hydel Stations with the largest being 450 MW

Baglihar HEP Stage I and 175 MW of Gas turbines. In addition, installed capacity

of the projects under operation with NHPC is 1680 MW from which free power to

the extent of 12 % of the installed capacity is available to the State.

 The details

of projects under operation in the State are at Annexure I:


At present the unrestricted demand in the State is 2425 MW while suppressed

demand is 1492 MW with scheduled curtailment. Thus there is a deficit of about

933 MW vis-a-vis even the restricted demand. However, this deficit does not

capture the grim situation adequately - the peak demand in the harsh winter

conditions surges up and that is precisely the period when generation from hydel

stations dwindles substantially due to lean discharge in the rivers. Consequently

the State has to rely mainly on the allocation from Central Power Stations and is

often forced to overdraw from the grid, attracting Unscheduled Interchange and

penal rates. 


Due to purchase of considerable amounts of power from the

northern grid and overdrawals under UI regime, the State suffers substantial

drain of its resources on this account. Harnessing of available hydro potential,

shall therefore, automatically result in improving of power situation in the State.

The demand pattern in the State comprises 35% domestic and 65% nondomestic



 On per capita basis, the State consumes 750 units

compared to 872 units in Himachal Pradesh, 706 units in Uttarakhand, 1506 units

in Punjab, 1208 units in Haryana and 671 units national average. Going by the

projected growth pattern, the power demand in the State is estimated to be

about 2600 MW in 2012-13 and about 5500 MW in 2025-26.


Government of Jammu & Kashmir, vide Govt. Order No. 211-PDD of 2003 dated

9.10.2003,brought out its Hydel Policy to encourage private sector participation

in development of Hydro Projects. 






In order to give further impetus to exploitation of hydel potential, the State

Government has decided to revise the State Hydel Policy of 2003 to fulfill the

following objectives:-

1. Expeditious development of available hydro power of the State.

2. Maximization of benefits to the State by meeting its power requirements

and giving a fillip to economic growth.

3. Provide employment opportunities to the people of the State.

4. Develop hydropower projects in an environment-friendly manner with

minimum dislocation of project affected people.

5. Provide for creation of social and development infrastructure of the local

area by hydro power developers and through the Local Area

Development Fund.

6. To accelerate the pace of hydropower development through private

sector participation by removing the implementation related difficulties of


7. To bring in the investment and associated efficiency from the private








                                    (Government order No: 211 - PDD of 2003 dated 09 - 10 - 2003)




1.1    Jammu & Kashmir has a hydropower potential of the order of 20,000 MW against which only about 1500 MW has been harnessed so far. The Government of Jammu & Kashmir (GOJK) has decided to encourage generation of power through small hydropower sources of energy and has framed a policy so that the development of this sector serves as an engine to achieve the objective of promoting the all-round development of the region.




2.1    This policy shall be in operation from the date of its publication as notified by the Government Order. All projects awarded under this policy will be governed by this policy for their entire duration.


2.2    All Hydropower projects / stations estimated to have an installed capacity of up to 25 MW and as notified by the Jammu & Kashmir State Power Development Corporation (J&KSPDC) from time to time shall be eligible under this policy. 


2.3    Jammu & Kashmir Government invites any non-GOJK agency to bid for identified projects for the development of this sector. These will be termed as Independent Power Producers (IPP). This would include any of the private sector entities, central power utilities, state governments or any other government entities and their joint ventures.




3.1    There shall be a pre-qualification by the GOJK of the bidders for the projects in the State based on (a) financial capacity to mobilize the required resources and bring in or raise their equity contribution; and (b) past experience with development, construction and operation of hydro projects or other power sector experience. The applicants will be graded and listed based on the balance sheets, annual reports and other reported evidence of financial and technical capacity. 


3.2    The weightage to be given to financial capacity, technical capability, past experience and other relevant attributes of the applicants, the sub-categories of these attributes to be evaluated and their inter-se weightage, the guidelines for evaluation and the passing score on attributes/in aggregate required for pre-qualification shall be specified in the bid documents inviting bids for pre-qualification. 




4.1    The projects available for development with indications of estimated capacities, and for which development of pre-feasibility studies is in progress shall be notified by the J&KSPDC from time to time.


4.2    The J&KSPDC will undertake to prepare the pre-feasibility studies in a time bound manner. The evacuation requirements including details of nearest sub-station will be specified in the pre-feasibility studies.


4.3    The projects shall be offered for a period of forty years from the date of the award at the end of which they shall revert to the Government of Jammu & Kashmir or extended further on mutually agreed terms, as per the decision of the Government of Jammu & Kashmir.


4.4    The private land, if any, required for the project shall have to be acquired by the IPP at their own cost. If it is Government land, it will be given on lease for a period of 40 years. All necessary assistance in this regard will be provided by the Power Development Department/Corporation. The construction of approach roads, water and power supplies etc. shall be the responsibility of the IPP.


4.5    In case of canal fall schemes, the availability of water in the canal will be subject to irrigation demand and the IPP does not have any right for additional water for power generation. The decision of Irrigation Department in this regard will be final and binding.




5.1    The projects shall be advertised in order to seek bids. 


5.2    Applications in response to the advertisement should be accompanied by a non-refundable draft of Rs.1.00 lakh only (Rupees One lakh) payable to Jammu & Kashmir State Power Development Corporation (J&KSPDC).


5.3    All bidders will be subject to pre-qualification as provided in paragraph 3. All pre-qualified bidders will be provided with the pre-feasibility studies prepared by the J&KSPDC.


5.4    Bids shall be invited for premium payable upfront to the Government of Jammu & Kashmir per MW in the case of each project/site, subject to a minimum threshold premium of Rs.2.00 lakhs only (Rupees two lakhs) per MW. Bids received beneath the threshold premium will be rejected.


5.5    Projects will be allotted to the bidder making the highest bid.


5.6    The successful bidder shall be required to deposit the premium/other amount due within a reasonable period of receiving intimation regarding his bid being successful. The exact time period shall be specified in the bid documents for invitation of bids. The successful bidder may be permitted to provide 50% of the bid amount in excess of the threshold as a bank guarantee encashable at the time of actual or scheduled financial closure, whichever is earlier.


5.7    If more than one bidder bids the identical premium per MW for any site/station, a gradation list based on pre-qualification criteria described above shall be the basis for allotment.


5.8    In case any project fails to attract any acceptable bid despite being bid out at least twice, the GOJK may consider allotting the site to a GOJK agency.




6.1    The IPP/ bidder can contract to sell power to any HT consumer within Jammu & Kashmir, to local grids within Jammu & Kashmir which are not connected to J&K PDD’s main grid, or to any consumer outside the state, or to the Jammu & Kashmir Power Development Department (J&K PDD).


6.2    Sales to the J&K PDD will be mutually negotiated.


6.3    All sales will be approved, as may be required, by the Regulator.




7.1    The infrastructure and facilities of J&K PDD will be made available to all IPPs for wheeling the generated energy.


7.2    Wheeling charges for wheeling the generated energy to third party consumers or outside the State will be as determined by the J&K PDD/J&K SERC. However, for those projects which are bid out prior to the determination of this rate by the J&K PDD / J&K SERC, the wheeling charge (for the entire concession period) would be 10% of net energy supplied at the interconnection point.


7.3    No wheeling charges are applicable in cases of sales to the J&K PDD, or to local grids within Jammu & Kashmir.


7.4    The J&K PDD will prepare a standard “wheeling and banking agreement draft” consistent with this policy statement. This will be made available prior to any bidding for projects.




8.1    The IPP shall be responsible for laying lines for connectivity to the nearest grid sub-station at the appropriate voltage which will normally be 132 KV or 33 KV depending on the capacity of the power station and the distance from the power station to the Grid substation.


8.2    The J&K PDD will determine the specifications of the evacuation facilities required, including the inter-connection point and voltage and the same would be specified in the project information document provided with the application form.


8.3    On specific request from the IPP, the J&K PDD will carry out the implementation of evacuation facilities at charges to be mutually negotiated.


9.    BANKING:


9.1    Developers can avail of the facility of banking of energy within a fixed period span of two months, which would be specified in the standard wheeling and banking agreement. The point of banking-in would be the inter-connection point at which the developer would feed in the energy into J&K PDD system.


9.2    The energy banked into the grid by the IPP shall be monetized at “the average pooled purchase price paid by J&K PDD” during the month of banking-in (into the J&K PDD system). The amounts so credited to the developer for the banked-in energy would be set off against the monetized value of the banked out energy. The monetization of the banked out energy shall be reckoned on the basis of the average pooled purchase price of electricity by the J&K PDD during the months of banking-out (of J&K PDD system). However, in addition, the loss incurred by J&K PDD on account of over-drawal during peak hours compared to input into the system during the peak hours will be compensated by charging the IPP the average differential between the rate for HT consumers in the State for peak and non-peak hours for the net overdrawal against peak power banked. 


9.3    The banked out energy shall be deemed to have been delivered at the inter-connection point. The developer would be required to pay the difference between monetized value of the banked-in and the banked-out energy and the peak period differential adjustment within a period of 30 days failing which a penal interest will be levied on the outstanding amount. Similarly, in case of a balance to the credit of the developer it shall be payable by J&K PDD within 30 days with a provision of penal interest on overdue settlement.


10.    DESPATCH:


10.1    Priority will be accorded for despatch into the grid by these IPPs ahead of merit order and any other source of supply, subject to any overall restrictions on the proportion of power that may be bought from such sources, which may be imposed by the Government/ Regulator in the interest of keeping the overall cost of power purchase within reasonable limits.


11.    ROYALTY:


11.1    On all projects governed by this policy, royalty payment for the first 15 years of operation would be exempted in all cases of sale of power outside the State or to the J&K PDD, or to consumers in rural areas not served or inadequately served by the concerned existing distribution license.


11.2    In case of sale to other parties or to J&K PDD after 15 years, a royalty of 12% of net energy wheeled (after deducting wheeling charges) or supplied shall be charged.




12.1    No entry tax will be levied by the State Government on power generation, transmission equipment and building material for projects.


12.2    Small Hydel Projects shall be treated as an industry and few incentives available to industrial units in backward areas shall also be available to these units including toll tax exemption. 


12.3    Income accruing from micro-hydel power project shall be exempted from income-tax as per the Government of India policy in vogue for backward areas.




13.1    Free transfer of shares will be permitted in the companies allotted projects as per the procedure laid down.




14.1    IPP shall prepare and submit the detailed project reports and all other information and make the necessary applications for obtaining the statutory clearances and approvals of the State and Central Governments and the Regulator (as applicable) after carrying out the required confirmatory surveys and investigations as per prevailing regulations/ norms within 32 months from the date of allotment.


14.2    The IPP shall be responsible for ensuring completeness of all submissions to concerned authorities. Failure to do so within the stipulated time frame shall be treated as non-compliance with the requirement stipulated in this paragraph.


14.3    The IPP shall achieve the financial closure within 12 months from the date of receipt of all statutory approvals and clearances given by the State and Central Governments. Financial closure would imply firm commitments for financing the entire project, with all pre-disbursement conditions having been fulfilled and the loan documentation being complete.


14.4    The project shall be made operational within 48 months from the date of receipt of all statutory approvals and clearances by the IPP.


14.5    The failure to reach any of the milestones mentioned above will result in automatic cancellation of the allotment of the site, and forfeiture of upfront premium amounts. No compensation would be payable to the IPPs in such instance.


14.6    Failure to reach the milestone as above would result in a liability to pay a penalty by the IPP to the GOJK, computed at the equivalent royalty revenue that would have been payable to the GOJK had the project met the milestone. In case the project enjoys an exemption from royalty in the initial years, the duration of royalty exemption would be reduced by the period of delay. 


14.7    The IPP may surrender the allotment back to GOJK if on completion of the DPR, within the stipulated time-frame, it has grounds to establish that the project is not techno-economically viable. On such surrender, the bank guarantee provided by the IPP in lieu of upfront premium would be released and any premium amount paid in excess of the threshold premium of Rs. 2 lacs / MW would be refunded to the IPPs by the GOJK.




15.1    The J&KPDD will be responsible for preparing the standard wheeling and banking agreement draft, determination of evacuation requirements and overseeing banking, despatch and royalty arrangements.


15.2    The J&KSPDC will be responsible for preparation of pre-feasibility studies, carrying out the bidding process and monitoring of the development of allotted projects/delivery as per time schedules.


15.3    The J&KSPDC will not participate in the bidding process. However, after the allotment, upon request from the IPP, the J&KSPDC may consider participating as a minority partner (with less than 50% shareholding interest) or perform certain tasks for the bidder on a consultancy basis. Such participation would be independently negotiated between J&KSPDC with the IPP and is not mandatory on the part of J&KSPDC.




16.1    Aspects of this policy that require regulatory approvals from the concerned Regulator would be subject to such approvals being given and would apply in the manner approved by the Regulator.




17.1    The applicant/IPP shall be responsible for carrying out due diligence with regard to his compliance responsibilities under various applicable Central/ State/other laws, rules and regulations, and ensure compliance with the same.




18.1    In the event of a dispute, the interpretation of these guidelines made by the Government of Jammu & Kashmir shall be final. In all such matters, to the extent practicable, an opportunity shall be given to the affected stakeholders to be heard before the Government takes any decision.

















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  • Joydeep
    Joydeep -

    S.NoStateTotal NumberTotal Capacity
    1Andhra Pradesh43104.43
    4Himachal Pradesh63271.25
    6Jammu & Kashmir217.5
    9Madhya Pradesh12.20
    13Tamil Nadu10.35
    15West Bengal56.45


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    mesyindia -

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