Disparity in hydro power policy affecting speedy implementation of projects

Disparity in hydro power policy affecting speedy implementation of projects
“The state governments should adopt a system to balance in allotting projects between CPSUs and IPPs for faster development of hydro projects,”  said  P C Pankaj, CMD, NEEPCO
NEEPCO, the pioneer in the power sector in the country, provides almost 60 per cent of the energy requirement of the North-East India. The organisation, which is constantly expanding its domain of expertise to cope up with the changing environment, plays an important role as a contributor for capacity addition programs. In an interview with EPR, Mr Pankaj discusses about the overall power industry as well as the growth plans for the hydro and thermal sectors. Edited experts:
What is your opinion on the power sector in the country?The overall prospect of the power sector is inspiring. There is a strong correlation between GDP growth and power demand. Increase in GDP results means increase in the demand for power. In order to meet the ever-increasing demand of power in the country, Indian power sector is relentlessly working for capacity addition programs. In the concerted efforts for capacity addition in the country, NEEPCO plays an important role as a contributor.
What are the key roadblocks for Indian power sector, and what are the ways to resolve them?Most of the hydro projects in the states have been allotted to various agencies which don’t have enough experience of working in the Himalayan region. It seems financial capabilities of these agencies are also not very strong. Perhaps these are the main reasons for which we have not seen much development in the hydro power sector in the recent years, especially in the North-East India, which harbours more than 50 per cent potential of the country. Since water is a state subject, and allotment of hydro projects are decided by the state government, they should formulate a transparent system for allotting hydro projects. They should adopt a system to balance in allotting projects between CPSUs and IPPs for faster development of hydro projects.
There are considerable delays in environment and forest clearances which is also a hindrance toward development of power sector. There should be proper coordination in the concerned ministries and departments for fast-track clearances of hydro projects. Shortages of fuel like coal and gas are also hindering the Indian power sector. The mining of coal should be allocated to the efficient companies through transparent system.
Lack of proper road transportation system to access the project site or to transport over dimensional consignments is also a big bottleneck in the North-East India. A concerted effort for timely infrastructure development is to be initiated before allotting the hydro projects for development. Law and order situations in some of the states are also not very conducive for which projects are getting delayed. In recent times, it is seen that most of the projects are suffering because of contractual ambiguities. Ministry of Power, Government of India has taken initiative to formulate standing bidding document (SBD) to sort out such issues.
What are the issues that concern your organisation?There is a disparity between the hydro power policy adopted by the state governments and the hydro power policy of the central government which is affecting the speedy implementation of projects. A level-playing field for CPSUs vis-a-vis the private sector is required in the Hydro Power Policy 2008 adopted by the Government of India, so as to enable the CPSUs to pay upfront premium for allotment of new projects as per the stipulation of the state governments.
Another serious issue is payment of Net Present Value (NPV) in addition to the compensatory afforestation. There will be severe impact on the commercial viability of mainly storage-based hydro power projects, involving large forest land. Electricity being a subject in the concurrent list, and because of the risks involved in the emerging scenario, in the long run, CPSUs may lose out to competitors from the private sector, as they have the flexibility to adapt to the norms laid by the respective state governments, unlike CPSUs which are governed by statutory guidelines.
What about the R&D and CSR activities?In pursuant to the guidelines of the Government of India for CPSEs to earmark a portion of the profit for R&D and sustainable development (SD), we have opened one R&D cell in April 2011. We have also formulated the water conservation policy. During 2011‑12, the corporation has spent about Rs.3.08 crore under CSR CD activities, particularly in education, health, sports, infrastructure development and other community needs. Furthermore, we have been maintaining our sustained endeavour for the quality and maintenance of international standards.
What are the new initiatives taken by NEEPCO?The projected energy requirement of the North-East India by 2021-22 stands at 22,421 MU with the peak demand touching 3,905 MW. With this potential and opportunity at hand, NEEPCO can emerge as the leading power producer in the region. We have an ambitious growth plans for which preliminary investigation for several projects in the hydro and thermal sectors has already been taken up. With the pool of skilled manpower, mainly drawn from that region, NEEPCO has a substantial advantage over other players in the field to harness and exploit the vast potential of the region.
NEEPCO is also geared up to diversify in areas of consultancy and joint ventures in project development. It is also planning to spread its wings outside of the North-East India. By upgrading technologies and adopting newer methodologies, NEEPCO is constantly expanding its domain of expertise in the industry to cope up with the changing environment.
Plants under operationNEEPCO operates three hydro stations and two thermal power stations. The first plant Kopili Hydro Electric Power Plant in the North Cachar Hills district of Assam was commissioned in March 1984. This plant has two reservoirs and comprises of three power stations which were commissioned in three stages, totalling 275 MW with an annual generation of 1,550 MU. The biggest plant commissioned by NEEPCO so far is 405 MW Ranganadi Hydro Electric Power Plant in Arunachal Pradesh. This is also the biggest power plant operating in the North Eastern region. The annual generation from this plant is 1,510 MU. The 75 MW Doyang Hydro Electric Plant in Nagaland was commissioned in June 2000. The 291-MW gas-based power plant in Assam commissioned during March 1995 to March 1998 is by far the biggest gas-based plant in North Eastern Region. This plant was declared “Centre of Excellence” in 2002 by the Government of India. NEEPCO has also commissioned 84 MW Agartala Gas Turbine Power Plant in Tripura in February 1998. This is an open cycle plant with four gas turbines. NEEPCO is in the process of converting this plant into a combined cycle plant by installing two steam turbines of 23 MW each.
Projects under construction At present five projects, totalling 916 MW, is under construction. Out of this 770 MW is hydro power and 146 MW is thermal. The hydro projects are 600 MW Kameng, and 110 MW Pare in Arunachal Pradesh and 60 MW Tuirial in Mizoram. The two thermal projects are 100 MW Tripura Gas Based Project and 46 MW Combined Cycle AGTP extension project in Tripura.
Solar initiativesNEEPCO has ventured into solar power generation and is in the process of setting-up two solar power projects in Tripura and Assam. Detailed Project Report (DPR) for 5 MW Solar PV at Monarchak, Tripura has been completed and process for obtaining investment approval is in progress. Feasibility Report (FR) for one 2 MW scheme in Assam is completed.

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