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Several hydropower projects of over 13,000 MW witnessing time, cost overruns: report

LiveMint logoLiveMint 28-06-2017 Mayank Aggarwal

New Delhi: Although private participation in the hydropower sector has gained momentum, it still faces many impediments and several hydropower projects with a cumulative capacity of over 13,000 MW are witnessing significant time and cost overruns, says a new report release on Wednesday.

The report ‘Accelerating Hydropower Development in India for Sustainable Energy Security’ by PwC- ASSOCHAM also said that only 30% of the total hydropower potential of 149 GW in India has been developed so far and stressed that the role of the private sector is critical for promoting accelerated hydropower development. PwC is a consulting firm while ASSOCHAM (Associated Chambers of Commerce and Industry of India) is an industry lobby group.

The report said India is endowed with large hydropower reserves that are estimated to be capable of meeting a demand of around 85 GW at a 60% load factor, making it the fifth in the world in terms of usable hydropower potential.

“However, in spite of the abundance of these reserves, the total installed capacity of large hydropower projects (with a capacity greater than 25 MW) till date is only 45 GW, representing only 30% of the total potential,” added the report, while stressing that in comparison to global levels, the overall pace of hydropower development in India is well behind that of other hydro-rich nations.

The report pins the slow pace of hydropower development in the past to factors such as “complex clearance and approval procedures, land acquisition issues, insufficient market depth and scope, limited availability of long-term financing, existing models for sharing of hydro benefits.”

It also emphasised that although private participation in the hydropower sector has gained momentum in the recent past, it still faces many impediments across various stages of a project development lifecycle.

“Several hydropower projects, across the central, state and private sectors, with a cumulative capacity of over 13,000 MW are witnessing significant time and cost overruns,” it added.

“Accelerated hydropower development will play a critical role in supporting the Government of India’s renewable energy capacity target of 175 GW by 2022,” said Yogesh Daruka, who is partner -hydropower and resources at PwC India, while adding that for India to meet its commitments made during UN Climate Change negotiations under an additional 20 GW of hydropower capacity needs to be developed by 2030.

The report recommended that the government should further strengthen existing benefit sharing mechanisms to make locals/affected people partners in hydropower development.

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