ABSTRACT
India is endowed with an enormous economically exploitable hydro potential of 84,000 MW at 60% load factor. Only 26% of this has been developed/ under development and cleared by Central Electricity Authority (CEA). Further, share of hydro capacity to total, has steadily declined from 50.6 % on 31.03.63 to 24.3 % at present. This is undesirable for economic operation of a power system. Also, India is facing a severe peaking power shortage, for which hydro power is ideally suited. This necessitates to give new impetus to development of hydro power.
Prior to Independence, most of hydro projects in India were in private sector. Thereafter, priority shifted to Central and State Sectors. Like many other countries, electricity sector in India has also undergone major modifications including institutional reorganization, introduction of new rules, privatization of the sector. To bring additionality to resources for capacity addition, Government of India in 1991 formulated a policy to encourage greater participation by independent power producers (IPPs). Additional incentives were given for hydro development. Many IPPs concluded memorandum of understandings (MOUs). Guidelines were issued for setting mega power projects in November, 1995 (revised in November, 1998). International Competitive Bidding (ICB) route was brought to bring more transparency in selection of IPPs. “Policy on Hydro Power Development” was formulated in August, 1998.
