Content

A. Overview of Power Sector

B. Hydro power scenario in India
C. Major Challenges
D. Action plan for Revival

. 1
Installed Capacity(MW) of India
(as on 31/01/2019 by CEA)

Thermal 2,23,027 RE
21%

Nuclear 6,780
Hydro
Hydro 45,399 13% Thermal
64%
RE 74,082
Nuclear
Total 3,49,288 2%

Copyright © 2016 Your Company All Rights Reserved. 2

RE capacity (MW) in India
(as on 31/01/2019 by CEA)
Small
Small Hydro 4,517 Hydro
6%
Solar
Wind 35,138 34%

Wind
Bio Mass 9,213 47%

Solar 25,212
Bio Mass
13%
Total 74,082
Copyright © 2016 Your Company All Rights Reserved. 3
 Capacity Addition vis a vis Generation

• Generation CAGR of 5.7% could have been achieved with CAGR of 5.7% in installed
capacity i.e. with a capacity of 217159 MW as against 269588 MW.
• Thus 52419 MW capacity has been unutilized . Assuming average installation cost of 5 Cr
/MW , an investment of Rs 2,62,147 Cr is idling
Copyright © 2016 Your Company All Rights Reserved. 4
Accelerated RES Capacity Growth Rate
RES Capacity (GW) Target
175

72.0

30-Sep-18 31-Mar-22

Copyright © 2016 Your Company All Rights Reserved. 5

PLF of coal based stns. reduced to 60%

89.4 86.3
84.8
78.6 76.8
71.9 70.6
56.2 60.0
54.3

NTPC Central State Private Overall

FY 07 FY 18

Copyright © 2016 Your Company All Rights Reserved. 6

Indian energy mix by 2032
Capacity by 2032 (GW)
India Energy
Barclays
KPMG WEF (2016) Outlook
(2015)
(2015)
Fossil (Coal + Gas) 413 440 440 536
Solar + Wind 315 250 224 355
Hydro 65 90 85 52
Nuclear 24 30 24 11
Other RE 17 10 20 -
Total 834 820 793 954
Source: KPMG
Copyright © 2016 Your Company All Rights Reserved. 7
MNRE action plan by 2022
60 GW from Hydro

175 GW from other RES

100 GW of Solar
60 GW from Wind
10 GW from Biomass
5 GW from Small Hydro

8
Factors Affecting Energy choice for fresh capacity
addition

24x7 Power Supply

Domestic Affordability Environment

Grid Stability
Reserves/ Cost/Kwh sustainability
Potential

Energy Security

Copyright © 2016 Your Company All Rights Reserved. 9

1
0

Relative Positioning of Various Options

for India

Copyright © 2016 Your Company All Rights Reserved. 10

1. Coal
Reserves (Billion Tonnes)
87% of the coal is thermal coal
As on 1.4.2014

Annual coal production is ~0.6 BT

Criteria Status Score

(Max-25)
Proven Reserves R/P ratio >200 years @current rate 25
Affordability (cost/unit) < Rs. 2.50 at pit head 25
Environment Sustainability Medium - Green house gas emission 15
Grid Stability High-24x 7 Reliable Power supply 25
Relative Score out of 100 90
Copyright © 2016 Your Company All Rights Reserved. 11
2. Hydro
Potential 150,000 MW

R anki ng St ud y
Ranking Study 107,000 MW The largest potential estimated is 38% in the
North Eastern Region followed by 36% in the
Northern Region.
Hydro Initiative 50,000 MW

Criteria Status Score (Max-

25)
Proven Reserves 150,000 MW 15
Affordability (cost/unit) Higher Fixed Cost; nil fuel cost 25

Environment Sustainability High 20

Grid Stability Sufficiently High / Suitable for peaking 25
Relative Score out of 100 85
Copyright © 2016 Your Company All Rights Reserved. 12
3. Nuclear
Criteria Status Score
(Max-
25)
Proven Reserves Meager Uranium, but vast thorium 5
Affordability Slightly higher due to high capital 10
(cost/unit) cost
Environment High 20
Sustainability
Grid Stability High (24x7) reliable power 25
Relative Score out of 100 60
Copyright © 2016 Your Company All Rights Reserved.
13
13
4. Solar MW

Criteria Status Score

(Max-
25)
Proven Reserves Unlimited 25
Affordability High (incl. Storage) 15
(cost/unit)
Environment High 25
Sustainability
Grid Stability Low due to infirm and intermittent 10
nature
Relative Score out of 100 75
Copyright © 2016 Your Company All Rights Reserved. 14
5. Wind
Criteria Status Score

Proven Reserves 65,000 MW 20

Affordability Slightly higher 15

(cost/unit)
Environment High 25
Sustainability
Grid Stability Low due to infirm and 10
intermittent nature
Relative Score out of 100 70

Copyright © 2016 Your Company All Rights Reserved. 15

Relative Score of Fuel Options

Copyright © 2016 Your Company All Rights Reserved.

16
16
Relative Ranking of Fuel Options
 Coal is going to be the main stay fuel
 Solar & wind has huge potential, but grid stability is a concern
 Coal stations Flexibilization challenge for RE integration
 Hydro power is the solution

Copyright © 2016 Your Company All Rights Reserved. 17

Recent Environmental commitments
 Commitments thru INDC’s (Intended Nationally Determined
Contributions)
–Kyoto Protocol
–Clean Development Mechanism (CDM)
–Paris Agreement
 RE and Hydro development

18
Need for development of hydropower in India

 Grid-balancing services (Ancillaries Services)

–Provisioning of peaking support
–Quick and black start capability
–Frequency and voltage support
–Spinning reserves

–India taking peaking support from Bhutan…

19
Need for development of hydropower in India

 Supporting large-scale Renewable Integration

–Hydropower in Norway is supporting large-scale integration of
wind power in Denmark

 Back down in Solar and Wind plants?

–Wind farm curtailment in Tamil Nadu

20
 Hydro power scenario in India

Copyright © 2016 Your Company All Rights Reserved. 21

Hydro power scenario in India
Decline of Hydro Power Share
(%) of Hydro Share
50.00 45.69
(%) of Hydro Share in Total Installed

45.00 41.20 41.80 40.60

40.00 36.76
33.96
35.00
28.77
30.00 25.24 25.01 26.19
25.00
Capacity

19.51
20.00
13.52
15.00
10.00
5.00
0.00

22
Hydro Potential in India
 India is blessed with immense amount of hydro-electric potential and ranks 5th in terms of exploitable
hydro-potential on global scenario.
Indus
Basin/Rivers
23%
Probable Installed Capacity Brahmaputra
(MW) 44%
Indus 33,832
Ganga
Ganga 20,711 14%

Central India 4,152

Southern
Southern 23,941
16%
Brahmaputra 66,065
Central India
Total 1,48,701 3%
Source: CEA 23
Hydro Potential in India: Growth so far…
Only 30% of the identified potential has been exploited so far

68% (of 8,928 MW) in Western region

 Only 2.13% (of 58,971 MW) in North-Eastern region

24
Stalled Hydro Projects
other reasons Developer
7% withdrawn
Environment and 4%
Forest Clearance 23,424
issues
Env. and
other reasons 1,846 Forest
Clearance
Developer issues
1,190
withdrawn 89%

Total 26,460
Source: CEA

25
Barriers to hydropower development in India
Enabling Land
infrastructure acquisition
7% 8% Geology,
hydrology and
topography
21%
Critical
Contractual
electrical and
disputes
mechanical
19%
works
11%
Local issues, Delays in
law and order clearances
problems 14%
20% Source: PwC

26
Challenges / Roadblocks in Hydro Power

Issues in Project Development Insufficient market

Life Cycle depth and scope

Road blocks
in Hydro
Power

Safeguards Issues
Financing & Risk Sharing

Copyright © 2016 Your Company All Rights Reserved. 27

 1. Issues in Project Development Life Cycle
Hydropower planning and project allocations
Water, a state subject: Consent
Different Upfront money
Integrated river basin development plan?
Project approvals
CEA, GSI, Hydel Civil Design Electorate, Hydrology
Directorate and Inter-State Matters Directorate
complex, time consuming and expensive
Land Acquisition
State Govt
Reliable land records
Enabling Infrastructures
power evacuation
(Lower Subansiri, the transmission cost @ Rs10000 Cr)
Copyright © 2016 Your Company All Rights Reserved. 28
2. Insufficient Market Depth and Scope
No Difference between Peak and Non Peak Tariff

Limited Ancillary Support Incentive

Only Frequency control
Meagre FRAS
Negligible Pumped Storage

29
3. Safeguards issues
 Safeguards acting as deterrent to the development of Projects
–R&R
–Climate, Biodiversity
–Environmental & Forest Clearances
–PIL
–NGT

30
4. Financing and Risk Sharing
Project financing and viability issues
High capital cost
Long Gestation period
Long Term Debt
High Risk premium
Risk-sharing profile of hydro projects
Geological, Topographical and Hydrological
Cost Plus: Higher tariff
Unsecure PPA: High Risk

31
Action Plan

Safe Guard Strengthening & Governance Enablers

Enhanced Benefit sharing

Action
Plan

Increased Market Development

Development of & Investment
Pumped Storage Facilitation

32
1. Governance Enablers
 Declaring all hydropower irrespective of size as RE, New Policy
 Creation of a Hydro Power Development Fund (HPDF): Interest Subsidy
 Cost of enabling infrastructure to be shared by Govt
 Power evacuation and associated infrastructure: Green Energy Corridor
 Integrated river basin development and project allocation procedures

33
2. Market Development & Investment Facilitation
 Differential tariff structures for peak and off-peak tariff
 Ancillary services market to include spinning reserves, voltage regulation, black start,
etc.
 Separate hydropower purchase obligations (HPOs)
 Bundling of energy from variable renewable sources with hydropower
 Streamlining of land acquisition and clearances processes : PPP Model
 Land record data with DPR
 NGT in the environmental and forest appraisal committees
 Deferment of free power for the initial years
 Amendment in tariff norms: Life 35 to 40-45 years
 Financing policies for hydro projects for long term debt
 Reduction in Risk premium by more equity part
34
3.Increased Development of Pumped Storage
 ‘Natural’ power battery: RE integration
 Environmentally friendly: toxic and polluting Li-ion and lead acid batteries
 Higher capital cost, but cheaper w.r.t entire project life cycle
 Necessary Guidelines
 Incentives for the development of pumped storage
 Pumped storage hydroelectric schemes in China:
– 40 GW of pumped storage capacity by 2020

35
4. Safeguard Strengthening & Enhanced Benefit
sharing
 Responsible and sustainable hydropower development
 Optimal benefit sharing with all stakeholders
 Nepal, provides a mechanism for locals to become active ‘co-investors’,
thereby enabling developers to obtain a ‘social license’
 Society’s acceptance

36
Conclusion

Hydro power is the key for integration of

ambitions RE capacity addition plans.
Favourable Policy is the need of the hour to
revive Hydro Sector.
37
38