To boost hydro power generation, the government has approved a slew of measures including providing renewable energy status for large hydel projects and new funding provisions. Earlier, hydro projects up to 25 MW capacity were considered as renewables and were eligible for various incentives like financial assistance and cheaper credit. With the government’s decision, hydro projects above 25 MW can also avail the benefits.
The Cabinet decision has also paved the way for adding hydro capacities of about 45 GW to the renewable energy basket of existing 74 GW which includes solar, wind and small hydro. India is aiming 175 GW of renewable energy by 2022. With addition of large hydro to clean energy segment, India is poised to have 225 GW of renewable energy by 2022.
With the new measures, large hydro projects (LHPs) would be allowed back loading (reducing) of tariff after increasing project life to 40 years, increasing debt repayment period to 18 years and introducing escalating tariff of 2 per cent. At present, hydro power tariff is expensive than other sources. These measure would help rationalise the tariff by hydro power projects.
