At a recent Power Line conference, R.K. Vishnoi, Chairman and Managing Director, NHPC Limited and THDC India Limited, talked about the current state of the hydropower sector as well as some of the major developments in this space. He also spoke about NHPC’s key upcoming projects, and future plans and targets. Edited excerpts…
India is the third largest power producer and consumer in the world. With its expanding economy, population, urbanisation and industrialisation, its power demand is increasing sharply. About a decade ago, the country was facing the challenge of meeting a peak demand of 125-130 GW, but it has come a long way, with around 240 GW of peak demand currently. This has been fuelled by population growth along with increasing electrification and per-capita energy consumption. While thermal capacity additions will continue to satisfy the growth in power demand, we are now also working on shifting the base load to green energy. The focus is on creating an arrangement from different sources, such that firm power is available round the clock.
India stands committed to reduce the emissions intensity of its GDP by 45 per cent from 2005 levels by 2030. For the decarbonisation drive, there is a need to increase the installation of renewable energy resources from the present levels of 72,312 MW of solar, 44,564 MW of wind and 46,880 MW of hydropower capacity. Although the share of solar and wind power in the total non-fossil power capacity is increasing exponentially, power from these resources is only available intermittently. Hydro has inherent capabilities to quickly ramp up or swiftly shut off generation. Solar and wind power must be supplemented with hydro to meet electricity demand fluctuations, in order to maintain grid stability. Hydropower projects, being clean, green and sustainable sources of energy, will be of paramount importance in our green energy mission. Hydropower projects are also essential for complementing solar and wind power, since solar and wind are intermittent in nature. Hydropower has a significant role to play in energy transition, as it provides clean and environment-friendly energy with a low carbon footprint. Hydropower is reliable and will be available at affordable rates in the long run through load balancing, frequency regulation, strengthening of grid resilience, grid integration with intermittent renewable energy sources, ancillary services such as voltage support and reactive power control, etc.
Hydropower development
The hydropower sector has moved very slowly in the last three to four decades, mainly because of its large development costs. Moreover, previously, the focus of the government was on fulfilling the power demand, which could be done quickly by adding thermal capacity. Now, however, the need of the hour is to shift towards green energy and add more and more hydro capacity. The government has recognised and designated hydropower as renewable energy, which has given a good push to the industry. As a tailwind, the Government of India is providing hydropower developers with funds for all expenditures on enabling infrastructure for hydro projects, such as roads, bridges and transmission-related works. In addition, the flood moderation component is separately funded by the government and does not form a component of energy tariff, thus making hydro energy more affordable for the end consumer. These policies have made hydro projects viable, and there is now a renewed interest in the sector.
Lately, the government has made a concerted effort in the Northeast Region. The hydro projects that were languishing for many years have been assigned to central public sector undertakings (CPSUs), which have greater technical competence and financial capacity to execute large projects. Implementing mega projects in the Northeast is no longer as difficult as it was 10 years ago. Today, accessibility, local administration support and law and order are extremely good. Accessibility has improved significantly, and one can reach any part of a north-eastern state or territory without any difficulty. There is extensive air connectivity and a splendid road network. The state governments are supporting developers and investors, and are helping them in land acquisition as well as in obtaining clearances and permissions.
India is moving at a fast pace for the development of pumped storage projects (PSPs). There is a potential of about 105 GW of on-river PSPs. Enthused by the favourable guidelines issued by the government, work is already in progress on 52 GW of PSPs. These energy storage projects have been taken up through CPSEs as well as through the PPP model. PSPs are essential for translating the vision of round-the-clock dispatch of green energy into reality. A pumped storage plant essentially requires two reservoirs – the upper reservoir and the lower reservoir. If one of them already exists, we need to build only the other one. Depending upon topographical limitations and other issues, the cost of constructing a PSP of 500 MW installed capacity is around Rs 80-Rs 85 million per MW. NHPC has signed MoUs for four PSPs in Maharashtra, two in Andhra Pradesh and one in Gujarat. We are also planning to do a PSP project on our own. THDC too has signed agreements with the Kerala and Karnataka governments for the development of PSPs. The maiden PSP of THDC India Limited will be commissioned in two months. This is the 1,000 MW Tehri PSP and shall be the country’s largest PSP apart from having the distinction of installing the country’s first variable speed reversible machine.
With the help of the government, long-term financing has now become feasible for the CPSEs. Hydro projects can repay their debt over 18-20 years, or even longer in some cases. With long-term financing, entities are able to rationalise tariffs by reducing the initial tariff, making projects viable. This will encourage generation companies to install and finance hydropower projects.
NHPC’s under-construction projects and future plans
NHPC has a total of 10 projects, with 10,500 MW of capacity, under construction (by itself or through its joint ventures). These will be completed in phases in the next three to five years. On its own, NHPC is executing three projects. Of these, the 2,000 MW Subansiri Lower in Arunachal Pradesh is near commissioning. The Subansiri Lower Project will be commissioned in the next three to four months, while construction activity has started on another mega project, namely, the Dibang Multipurpose Project (2,880 MW) in Arunachal Pradesh. Once commissioned, Dibang will be the largest hydro project in the country. We are also developing the 800 MW Parbati II project in Himachal Pradesh. The issues that these projects had been facing, forcing them to run into time and cost overruns, have been resolved. Issues such as contractual disputes, financing constraints of the contractors and other law and order problems have been addressed, leading to faster implementation. The construction of the projects is going smoothly, without any difficulties, and they will be commissioned as per schedule.
NHPC has another six projects, aggregating 3,634 MW of capacity, under construction through joint ventures and subsidiary companies. We also have six solar projects, aggregating 1,135 MW of capacity, at various stages of development. Moreover, five hydro-electric projects, namely – Teesta Stage-IV, Dugar, Sawalkot, Uri-I Stage-II, and Kirthai-II, aggregating 4,046 MW are under various stages of clearances. We are also working on the Siang Upper HEP, which is an ultra mega hydro project with 10,000 MW of capacity. NHPC will be adding 6-7 GW of pumped storage capacity by 2030-31. NHPC is also undertaking projects related to other renewable energy resources. The company is trying to integrate its solar energy generation with PSPs. Apart from this, hydro projects aggregating 8,964 MW of capacity are in the pipeline.
Overall, NHPC aims to be a 23 GW company by 2032 (by adding 16 GW of renewable energy in the next 10 years) and a 50 GW company by 2047 (by adding 43 GW of renewable energy in the next 25 years). We plan to undertake investments of Rs 800 billion by 2032 and Rs 3.6 trillion by 2047.