Power ministry forms committee to woo private participation in hydropower sector
This also comes at a time when hydropower generation has seen a decline of 12 per cent in the month of August compared with the corresponding month, last year, according to the ministry of power.
New Delhi: In a bid to seek more private sector participation in the hydropower sector, the ministry of power has formed a committee under Central Electricity Authority of India (CEA) to propose recommendations to the ministry.
“We want more players to bid for the contracts and we have set up a committee for that. CEA is heading the committee and we have asked them to give inputs on that,” said a senior official close to the development.
An email sent to the power ministry seeking comments on the composition of the committee and its specific Terms of Refernce remained unanswered.
This also comes at a time when hydropower generation has seen a decline of 12 per cent in the month of August compared with the corresponding month, last year, according to the ministry of power.
“Restructuring and financial destress remains a major issue for them and hence we have very few people who are able to come up and take up the contracts. We are trying to see how to encourage private sector participation and have more competition. The transmission sector was able to transform itself only after more competition was allowed and we want to mirror that for hydropower,” the official said.
According to experts, private sector remains reluctant due to various issues pertaining to project execution. “Developing a hydro-project is complex given factors such as hydrology, geology, clearances, approvals, R&R, high capex and long gestation- often leading to time and cost overruns,” said Debasish Mishra, Partner at consultancy firm Deloitte Touche Tohmatsu India.
At present, as many as 20 under construction hydro power projects totalling 6,329 MW are either stalled or stressed in the country and Rs 30,147.08 crore has been spent on them, former minister of coal, power, new& renewable energy and mines Piyush Goyal had said recently in a written reply in Lok Sabha.
In the current environment of power surplus, stressed assets in generation sector- neither private developers nor the banks will the risk appetite to take up investment in hydro sector,” Mishra added.
According to Niti Aayog’s draft energy policy, the think-tank has proposed a bail out of stranded large hydropower projects of around 11,000 MW capacity.
The government of India also aims to add 1,305 Megawatt (Mw) of additional hydropower generation capacity in the current financial year out of which 305 MW expected from the private sector while 266 MW has already been commissioned.
Source: energy.economictimes.indiatimes
