Tucked away in the picturesque Hemmige village, about an hour’s drive from Mysore, is Bhoruka Power’s 4.5 megawatt Madhavamantri Power Plant. Like most hydro power plants, this too is nestled in nature's lap and produces 25 million units of power a year.

Set on the banks of the Cauvery, the plant, one of the company’s 17 small hydro power (SHP) stations across Karnataka, is a run- of- the- river project. An anicut (a diversion structure) set across the river helps create a differential in the water flow; the resultant energy helps move the turbines.

A shaft connects the turbines to a generator and as the turbines move, so does the generator — thereby producing power. The power generated is then transmitted to the local grid and supplied to the nearby areas. Meanwhile, the water flows out and rejoins the river. Karnataka is among the leading SHP-potential States in the country. Uttarakhand and Himachal Pradesh are the other two. Around 43 per cent of the country’s SHP potential lies in these three states. In India, plants with a capacity of up to 25 MW are classified as small hydro. From 1,275 MW in 2000, India’s SHP capacity has tripled to 3,940 MW (as on October 2014). But this still represents a scant fifth of its total potential. Led by the private sector, SHP capacity additions progressed at a fast clip during the first decade of the 2000s. However, the interest of private players has waned over the past few years. That apart, in the case of Uttarakhand, with the 2013 disastrous floods in the State being linked to large-scale hydro power development, no new projects are being approved in compliance with a Supreme Court order.

Not-so-small problems

So, why has the enthusiasm of private players dimmed? There are many reasons for this. “The entire process –- from choosing the area for the plant to getting clearances from both the Centre and the State to signing power purchase agreements – takes quite sometime. Earlier, it would take about three-and-a-half to four years to get the clearances. This has now got stretched to five years,” explains S Chandrasekhar, MD, Bhoruka Power. He, however, feels that the situation has improved with the government’s new online project clearance system.

Also, with only the large rivers in the country being properly mapped, hydro power producers have to rely on insufficient data on water geography and rain flow on the other rivers. Also, even as project costs have gone up, the feed- in- tariffs given to SHP producers by the state electricity boards are no longer attractive. These tariffs, which are based on a cost plus return model are set by the respective State electricity regulatory commissions. According to Chandrasekhar, generation- based incentives, similar to those in the wind power sector, would help incentivise small hydro power producers.

Generating interest

In fact, to bring back private sector interest in small hydro projects, this year the government released a draft document on the National Mission on Small Hydro where it identified some of these challenges and offered some solutions. And with good reason too, for SHP plants have many advantages to offer.

The most obvious, of course, is that they are a source of clean energy. Also, even though the initial cost of setting up an SHP plant (₹8.50- 9.50 crore per megawatt) exceeds that of a thermal plant (₹4.8- 7.2 crore), with no fuel requirements, the running cost turns out to be much lower. “Today the small hydro power tariff in Karnataka is ₹4.19 per unit, whereas thermal power, assuming the plant has a linkage with Coal India, would cost around ₹3.80 a unit. It would be much higher for an imported coal- based plant. What you need to do is to look at the cost of power over the entire lifespan of a plant. So, while electricity from a SHP plant would be priced at ₹4.19 for 20 years, thermal power tariffs will be revised as coal costs go up over the years,” explains Chandrasekhar.

All is not well

These advantages notwithstanding, SHP plants in India have had their share of troubles too. So, while one would like to believe that SHP plants do not come with the problems associated with large hydro power plants — submergence of areas and displacement of people — that has not always been so.

Faulty project implementation in many cases has led to some unintended consequences. “Unlike large hydro power projects, SHP plants are exempt from an Environment Impact Assessment, but this needs to change,” says Parineeta Dandekar, Associate Coordinator, South Asia Network on Dams, Rivers and People, an environment organisation. Further, as pointed out in a report by the Centre for Science and Environment, the cumulative impact of all SHP plants implemented on a river can be serious. The report calls for conducting a study on the carrying capacity of a river basin and looking into the impact on the entire river length before allowing additional projects.

In sum, India needs to vigorously tap the potential of small hydro plants but only after assessing the impact and sufficient due diligence.