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Small Hydro, Big Opportunity

Analysing how small hydro projects bring big business opportunities

Small Hydro Power (SHP) projects are done in small rivers streams or are enforced in the existing water infrastructure. SHP projetcs are mainly developed for generating power in the remote regions. Like solar and wind small hydro power can lead in the renewable energy segment as it has huge potential also due to its versatility in low investment prices it can turn as promising and economical energy solution for future power requirements.

Apart from being one of the major source for power how SHP projects can bring big business opportunities is a thing to watch and to take the small hydro projects ahead the government also need to boost the sector. To understand how SHP projects can bring big business opportunities, this article will describe about the same.

India’s SHP potential is 19,749 MW with 6,474 identified projects and Karnataka has the largest share of over 4,000 MW. Of these projects, a total of only a little over 1,100 MW are under implementation. Sharing his views on the growth of the small hydro power Neelav Samrat De, Asst. General Manager (Marketing & BD), ANDRITZ HYDRO Pvt. Ltd states, “Even though SHP comes under renewable energy and enjoys the benefits of renewable, however, we have not witnessed a considerable growth in this domain. Clearly, under the government’s ambitious renewable energy thrust, we see importance given to solar and wind and the least to SHP projects. Even though SHP is a very state related issue, where the state utilities through their renewable department give developer licenses, we as equipment manufacturers, have not witnessed the zest from state governments to put thrust in SHP projetcs, maybe barring Himachal Pradesh, where HIMURJA, the nodal state renewable agency, has in the recent past given developer licenses for over 750 SHP projects.”

Small hydro enjoys sops and tax benefits as it is under the renewable ambit. MNRE has implemented some commendable steps to encourage investors and developers to take up the SHP initiative as this caters primarily to the local population and does not get involved in issues of land acquisition, huge capital investments and other issues related to large sized hydro projects.

Briefing on how SHP projects can bring big business opportunities Neelav adds, “While looking back at the opportunities, SHP projetcs are a very good proposition for developers not only from the benefits of sops and lesser risks, but also from interests during construction, lesser project completion schedules and rebates. Also with the solar wave going the promising way, SHP projects also belonging to the same category would also see a push, as we in the industry anticipate. SHP projects are looking towards a push and we could probably be looking at a good opportunity in this segment in the coming months. Specifically, also with the MOP trying to push for the hydro sector’s revival, we are hopeful for SHP too.”
Dr. Rajib K Mishra, Director (Mkt. & BD), PTC India Ltd believes, SHP projects are generally required to supply both a local community and industry or to contribute to the distributed generation in regional or state electricity grid. Generally the SHP projects are without dams and pre-dominantly developed on streams with good hydrology on run-of-river scheme. The option of supplying power to remote hilly areas and townships can either be through long transmission lines or through generation at the point of consumption itself. The distributed generation for remote hilly areas are best suited for SHP projects. If we see the western countries and particularly hilly countries like Norway and Sweden, SHP projects with ownership of local community are pre-dominantly supplying power in remote areas. “In India the focus in recent past is adding capacities in thermal and renewable which are well integrated and are of higher scale. This was done to achieve larger targets and to cater to the needs of electricity in a much faster pace. But we cannot ignore the fact that the remote areas and hills are yet to be electrified and connected to the grid,” points out Dr Mishra.

Mishra adds, “There is a huge opportunity for developing such SHP projects in remote locations which can cater to local needs and can sell surplus power to the grid. This can be owned by local municipality or panchayats and can be on the franchise models as well. The participation of community and the women self-help groups for installing small hydro and supplying power to the local communities can equally be harnessed. So therefore there are many opportunities for small hydro projects that are not tapped.”

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