Incentives to stuck hydro power projects unlikely

The Centre is unlikely give any financial incentives to revive stuck hydropower projects, instead the government may bring out only new policy making mandatory purchasing of green power by electricity distribution companies.

To avoid financial implications, they decided to revisit the proposal and will give only other facilities like mandatory purchasing of power produced by hydro generating stations by electricity distribution companies, sources in the Union Ministry of Power said.

As per the draft hydro-power policy issued by the Ministry of Power, the government plans to provide Rs 16,709 crore support for 40 stalled hydel projects with 11,639 MW capacity and classify all such ventures as renewable energy.

The two main features of the proposed policy are-first is granting renewable energy status to all hydro power projects regardless of its size and second is to provide Rs 16,709 crore support for revive stalled 40 hydel projects.

At present, small hydro projects of up to 25 MW capacities are considered as renewable energy and such projects are eligible for various incentives by the government in terms of taxation, duties and also cheaper credit.

Projects beyond this capacity are not in this category and hence not entitled to the benefits.

The granting of renewable energy status to all hydro projects regardless of its size, would enable India to achieve clean power capacity of 225 GW by 2022, said the official in the ministry of new and renewable energy.

The proposal also says a Hydro Power Fund would be created under the power ministry for providing funds to the projects under the policy.

Besides, under Hydro Purchase Obligation (HPO) for hydro projects of over 25 MW capacity, the the discoms would be mandated to buy a proportion of power from these plants.

However the ministry plans to revisit the policy features to avoid financial implications, sources said adding that the government is keen on new policy to encouraging green energy.