1

A PROJECT REPORT OF

Energy and Environment Management ON

Land Resources

SUBMITTED TO:- SUBMITTED BY:-

Ashish Porwal

Dr. Rudra Rameshwar Anuj Saini

Nitin Jain

Shubhra Bhugra

Sonali Gambhir

2

ABSTRACT

Hydro Power Project may be used as one of the option for achieving the energy

targets in a developing country like India where center or state Governments have

limited financial resources to put in large projects which require long gestation

period. One additional advantage with the Small Hydro Power.

Project is that private partners may get attracted due to low investment and

quicker return in comparison to large projects. The last but not least is the most eco

friendliness of small power projects which is a point

of serious concern in case of thermal, or nuclear or sometimes in big Hydro power

projects depending upon the location of the projects. Small Hydro Power potential

in India is still under-utilized and there is need to tap this potential for optimum

utilization of natural resources.

In Madhya Pradesh, Small hydro plants are not many , however there is

good scope for developing such plants. Tawa is one of such plants in MP, which

has been developed as canal head powerhouse on the left bank canal (LBC) of

Tawa irrigation project by a private investor. This plant is working in a very

efficient manner addressing both the power and irrigation aspects successfully.

This example will attract the private investments in small hydropower sector in the

developing countries like India.

3

ACKNOWLEDGEMENT

The success of any research study depends upon a number of factors among which

the proper guidance from the experts in the industry and a faculty plays an

important role. We would like to express our heartfelt thanks to many people. This

Project is an effort to contribute towards achieving the desired objectives. In doing

so, we have optimized all available resources and made use of some external

resources, the interplay of which, over a period of time, led to the attainment of

the set goals. We take here a great opportunity to express our sincere and deep

sense of gratitude to Dr. Rudra Rameshwar for giving us an opportunity to

work on this project. The support & guidance from Sir, was of great help & it was

extremely valuable. We express our sincere thanks to all the people who, directly

or indirectly, contributed in time, energy and knowledge to this effort.

4

TABLE OF CONTENTS:

Abstract

Acknowledgement

Introduction

History Of Hydropower

Hydropower In India

Hydroelectric Projects Development: CHALLENGES

Low Exploitation of Hydro Potential

Power Shortage in India

Declining proportion of Hydro Capacity

Thrust on Hydro Power

Govt. of India Initiative on Hydro Power Development

Current issues/ problems with Hydropower in India

Major challenges and responses

Opportunities in Indian hydroelectric sector

Conclusion

5

INTRODUCTION

Hydropower is a renewable, non-polluting and environment friendly source of

energy. It is perhaps the oldest energy technique known to mankind for conversion

of mechanical energy into electrical energy. Hydropower represents use of water

resources towards inflation free energy due to absence of fuel cost. Hydropower

contributes around 22 % of the world electricity supply generated. The total

potential of small Hydropower of the whole world is 780,000 MW out of which

50,000 MW has already been utilized.

Small Hydro is also the highest density resources in generation of electricity

due to the reason of being it environment friendly, flexibility in operation and

suitability in giving support in peak time to the local grid. Due to the small

gestation period, small capital investment and quicker return involved, in recent

years it has become the point of attraction for private sector. Fiscal incentive

announced by the central and state Governments time to time for investment in this

sector have further caused private investor to give attention to this sector.

Small hydro power plants (SHP) provide maximum benefits in minimum

time. And offers the most fastest economical means to enhance power supply,

improve living standards, stimulate industrial growth and enhance agriculture with

the least environmental impact and without heavy transmission losses .Due to less

transmission losses there is a reduction in distribution cost as well. Its availability

at the head of the irrigation canals and small streams is also a one of the added

advantage of it.

6

HISTORY OF HYDROPOWER

The first hydroelectric power dam in the world was built in Appleton, Wisconsin in

1982. In India, Jamshed ji Tata built the first hydroelectric power dam in the

Western Ghats of Maharashtra in the early 1900s to supply clean power to

Bombay’s Cotton and Textile Mills. He took the British Government’s permission

to build dams, namely the Andhra, Sirowata, Valvan and Mulshi hydel dams in the

Western Ghats to generate electricity using high rainfalls in the hills as storage

areas.

Humans have been harnessing water to perform work for thousands of

years. The Greeks used water wheels for grinding wheat into flour more than 2,000

years ago. Besides grinding flour, the power of the water was used to saw wood

and power textile mills and manufacturing plants. For more than a century, the

technology for using falling water to create hydroelectricity has existed. The

evolution of the modern hydropower turbine began in the mid-1700s when a

French hydraulic and military engineer, Bernard Forest de Belidor wrote

Architecture Hydraulique. In this four volume work, he described using a vertical-

axis versus a horizontal-axis machine. During the 1700s and 1800s, water turbine

development continued. In1880, a brush arc light dynamo driven by a water

turbine was used to provide theatre and storefront lighting in Grand Rapids,

Michigan; and in 1881, a brush dynamo connected to a turbine in a flour mill

provided street lighting at Niagara Falls, New York. These two projects used

direct-current technology.

7

Hydropower In India

With the liberalization of the economy, the Government of India has been

encouraging and invited private sector for investment in the power sector.

Accordingly, a conducive policy environment has been created by modifying the

Electricity Act. The new Electricity Act-2003 deals with the laws relating to

generation, transmission, distribution, trading and use of electricity. The Act has

specific provisions for the promotion of renewable energy including hydropower

and cogeneration. It has been made mandatory that every state regulatory

commission would specify a percentage of electricity to be purchased from

renewable by a distribution licensee. The National Electricity Policy announced in

2005 aims at access of electricity by all households and per capita availability of

electricity to be increased to 1000 units by 2012. The Policy underlines that

renewable energy potential needs to be exploited and private sector would be

encouraged through suitable promotional measures. Regarding fixing of tariff, the

government has announced Tariff

Policy in 2006 wherein the State Regulatory Commissions are required to fix tariff

in their respective state and also decide about the renewable purchase obligation.

The Electricity Act and Tariff Policy are favorably tilted towards increasing power

generation from renewable. Now, Central Electricity Regulatory Commission has

also announced the tariff calculation guidelines for renewable technologies

including for small hydro projects.

The existing power deficit and a rapid growing demand coupled with

government commitment to provide access to electricity for all has necessitated a

large scale capacity addition program. A capacity addition of 78,000 MW in the

8

11th Plan (2007 to 2012) and approximately one 100,000 MW in the 12th Plan

(2012-2017) is planned. Concurrent investments in Transmission and Distribution

are also going on. Such a gigantic task is strongly supported and complemented by

the private sector.

These changes facilitated the removals of barriers to investment, improved the

functioning of the system and resulted in additional generation of power much in

excess of that achieved in the earlier plans. Ministry of New & Renewable Energy

(MNRE) Government of India is the nodal ministry for small hydropower

development in India.

9

HYDROELECTRIC PROJECTS DEVELOPMENT: CHALLENGES

Enhancing the level of energy consumption, particularly in less

developed and developing countries, is a global challenge. 20% of world

population living in industrialized countries consume 60% of energy and

remaining 80% of population have to manage within 40% of total energy.

This has obviously resulted in wide disparities between the standard of

living and quality of life of high energy consuming countries on the one

hand and those who do not have the opportunities of adequate access to

energy on the other. It is precisely for this reason that development of

different sources of energy and increase in its consumption has become a

priority agenda of all the developing countries.

Various countries have adopted their own strategies to provide energy to

their people. In the context of electric power, as an important form of

energy, the thermal and hydroelectric power on a global basis, have

occupied the largest proportion. Within the thermal group, coal based

power stations occupy dominant position. However, this varies from

country to country. The Gas based combined cycle power stations in

number of countries occupy a significant proportion. Similarly, nuclear

power stations have also increased and have been adding large amount

of capacity to the thermal group. During last 30 years, Hydroelectric

power generation has, as a matter of fact, reduced from 21% in 1973 to

less than 17% in 2000. During the same period, coal based generation

marginally increased from 38% to 39%, gas increased substantially from

12% to 17.4% and nuclear witnessed a very steep rise from 3.3% to

16.9%. Obviously concerted efforts are required to develop Hydroelectric

capacities.

10

Low Exploitation of Hydro Potential :

Inspite of hydroelectric power requiring a clean energy generation process,

exploitation of Hydroelectric potential in various countries has been rather on a

lower side.

:

Power Shortage in India:

In India, though over 100,000 MW of capacity has been added in last 50

years, there is a huge gap between the demand and supply of power. While

in the last few years it has marginally reduced, the peaking shortage

continues to be over 12% to 13% and the average energy shortage at about

8.8%. Indian power system has an installed capacity of 108,207 MW in May

2003, with hydroelectric accounting for 25%.

Declining proportion of Hydro Capacity:

In the last 30 years, the proportion of hydroelectric capacity in the Indian

power system has considerably reduced. It has dropped from about 46% in

1970 to 40% in 1980, 29% in 1990 and now 25% in 2003. In spite of the

Hydroelectric potential, which is now estimated to be of the order of 150,000

MW, the exploitation has been of the order of 27,000 MW. Some of the

11

important reasons for decline in the Hydroelectric proportion in the total

capacity over the last 30 years are as follows:

a) Indian power supply industry has always experienced the situation of

shortages both in energy and peaking requirements. To tide over the

shortage in shortest possible time, more dependence was placed on

sources of power generation with shorter gestation period. Obviously

this short-term approach rather than a long-term perspective led to this

problem.

b) With abundant coal reserves in the country, large capacity additions

through coal based pithead power stations during the eighties and

nineties increased the thermal proportion.

c) Emergence of gas based combined cycle power stations based on

indigenous natural gas with gestation period of 2-2 ½ years also

received priority in response to the anxiety to create capacity addition

in shortest possible time.

d) Nuclear power stations have also emerged as reliable modes of thermal

generation.

e) In spite of best efforts at the stage of planning and formulating projects

in the hydro segment, a number of large projects got into long gestation

period of construction on account of various reasons, namely

environmental issues, rehabilitation & resettlement (R&R) problems,

gap between investigations and field realities, etc. We do have a

number of successful stories on the hydroelectric projects but we also

have large projects which have taken several years to get completed.

12

Thrust on Hydro Power:

In the recent years, the Govt. of India has committed quantum jump, in the

financial allocation and also by way of other supports so that Hydroelectric

projects not only get right priorities but also contribute in an increased way to

the future capacity addition programs of the country. Accordingly, in the 10th

Five-Year Plan (year 2002-2007), the target for hydroelectric capacity has

been placed 14,393 MW, which is more than the total installed capacity

(13,666 MW) created in the last 20 years. The thrust on hydroelectric

development is based on the following considerations:

a) Hydroelectric involves a clean process of power generation. Once the

projects are constructed, there is no pollution ramification unlike many

other power generation technologies and processes.

b) Since it does not suffer from the limitation of inflation on account of

fuel consumption, in the long run, it is the most cost-effective option

for power supply. In Indian context, where more than 45% of Indian

population has yet to have access to electricity at an affordable price,

this is an important consideration.

c) Indian power supply system has a peculiar limitation of huge variation

between peak and off peak requirements. Management of peak load in

an effective manner could be conveniently handled through availability

of hydroelectric support. The system at present does suffer from large

frequency variations. Better hydro support could address this problem

better.

13

d) Locations of Hydroelectric projects in India are also in areas which

need substantial support for their economic development. These areas

are North-east, Uttaranchal, Himachal Pradesh & Jammu & Kashmir

where more than 80% of potential exists. Developing projects in these

areas will spur economic activities and will lead to overall economic

development.

e) In an integrated Hydroelectric project – there are many such projects –

the schemes involve not only supply of electricity but also provision of

drinking water and irrigation. These are important issues in many parts

of India. Hydroelectric projects, in many cases, do have the ability to

mitigate these problems.

f) Flood control is also an issue and quite often a challenge. Integrated

hydroelectric projects could adequately address this concern.

Govt. of India Initiative on Hydro Power Development:

The main features of the Government of India policy on hydro power

development are as follows:

Additional budgetary financial support for ongoing and new

hydro projects under Central Public Sector Undertakings.

Basin-wise development of hydro potential – comprehensive

Ranking studies for 399 schemes.

14

Advance action for capacity addition – 10 year ahead of

execution

Emphasis on quality of survey & investigations

Resolution of inter-state issues on sharing of water and power.

Renovation, Modernization & Uprating of existing hydro stations

Promoting small and mini hydel projects – 25 MW and below

now fall into category of “non-conventional” qualifying for

benefits.

Simplified procedures for clearances by Central Electricity

Authority; Electricity Act 2003 further liberalizes this.

Rationalization of hydro tariff by allowing premium on sale rate

during peak period

Realistic estimates of completion cost considering new

development on geological front during execution.

Promoting hydel projects in joint venture

Selection of developer through MOU/Bidding route

Govt. support for land acquisition, resettlement and

rehabilitation, catchment area development, etc.

Some of the measures announced by; Govt. of India have already

been introduced which include simplified procedures for transfer

of techno-economic clearances, streamlining of clearance process

and introduction of three-stage clearance approach for

15

development of hydro projects in Central Sector/Joint Ventures,

etc.

The Central Electricity Regulatory Commission has approved 5%

hydro development surcharge on annual fixed charges for central

hydro power generation.

National policy on Hydropower in India:

With the aim to accelerate the development of Hydropower, the

Ministry of Power (MoP), Government of India (GoI) introduced the

National Policy on Hydropower Development in 1998. The policy

document has identified and responded to the major issues and barriers.

With Central, State and Private hydropower projects contributing 3455

MW, 5810 and 550 MW respectively, the GoI aims to reach the total

capacity of 9815 MW during the ninth plan. (The XIth Plan aims

capacity addition of 18781 MW in the hydropower sector)

16

Exploitation of vast Hydro Electric potential at faster pace:

The government would take steps like execution of all CEA cleared

projects, update and clear pending DPRs, survey new green field sites

and resolve inter-state disputes.

Promotion of small and mini hydro projects

Small and mini hydro projects are especially viable for remote and hilly

areas where extension of grid system is comparatively uneconomical

Strengthening the role of PSUs and SEBs in taking up new hydro

projects

The government aims at enlarging Public sector’s involvement in mega

hydro projects and multi-purpose projects involving inter-state issues,

projects for peaking power and those with rehabilitation and

resettlement issues.

Increasing private investments for development of hydropower in India

The public sector would be supported by greater private investment

through IPPs and joint ventures. Private sector participation is

considered vital for large scale development of hydropower.

Through these measures, GoI aims to realize 100% hydropower

potential of the country by year 2025-26. These objectives have been

developed in response to the following constraints:

Technical, including difficult investigation, inadequacies in tunneling

methods)

Financial (deficiencies in providing long term finance)

17

Tariff related issues

Managerial weakness (poor contract management)

Geological surprises (especially in the Himalayan region where

underground tunneling is required)

Inaccessibility of the area

Problems due to delay in land acquisition and resettlement of project

affected families

Law and order problem in militant infested areas.

Current issues/ problems with Hydropower in India:

The Government of India set up a National Committee in 1987 and a

Standing Committee in 1998 to oversee the progress on hydropower

development.

This section derives largely from the report submitted by the Standing

Committee on Energy (2005-06) - Hydro power: a Critique which discusses

the actions taken by the Government on the recommendations made by the

Committee in the forty second report on hydro power in India.

Technical issues:

To expedite early execution of hydro projects, bankable Detailed Project

Report (DPR) based on detailed survey should be prepared to avoid

geological uncertainties. Survey & investigation and analysis of geological,

geo-morphological, geo-electrical, hydrological data etc. should be done at

the time of preparation of a DPR itself in order to minimize the impact of

18

risks. It is, therefore, necessary to expedite survey and investigations with the

latest state of the art technology and prepare a shelf of projects for execution.

The quality of DPRs should be of high standard which should infuse

confidence in the national/international developers to take up the execution of

projects without loosing time in rechecks etc at the same time, contract

monitoring as distinct from project monitoring should be emphasized and

land acquisition and infrastructure development be settled and completed

before the start of the project.

Renovation and Modernization (R&M) has been recognized world over as a

well proven cost effective technique for improving the

performance/efficiency of older power plants. The useful life of the plants

can be increased by R&M and the plants yield benefits in the shortest

possible time at a reasonable cost. GoI in its policy on hydropower

development, 1998 has laid stress on need for renovation and modernization

of hydro power plants. Contingency Plan for Hydro Projects affected by

Natural Calamities need to be prepared and made public. National Policy on

Rehabilitation and Resettlement (R&R) should be finalized and made public.

Infrastructural issues:

There is a need to setup single window clearance for hydro projects. Various

authorities such as the Central Electricity Authority (CEA), the Ministry of

Finance, Ministry of Environment and Forests, etc. are involved in the

appraisal of a hydro power project before it is certified for development. It

will be desirable to have a single window dispensation/authority so that a

project is cleared without many hassles.

19

The hydro projects which involve lesser risk element and entail lesser capital

investment can be considered for development in the Private Sector. Public

Sector can take up (a) Multi purpose Projects (b) Projects Involving inter-

State issues and in inter-State river systems, (c) Projects involving

cooperation with neighboring countries and (d) Projects for complementary

peaking with regional benefits (e) Projects in the North-Eastern Region etc.

Financial issues:

There is also a need to off-load indirect cost components on hydro project.

Many hydro projects are located in troubled areas and infested by militancy

and terrorist activities. There is an urgent need to amend the present policy of

the Government in regard to charging the entire security expenditure from

concept and until commissioning - on the project cost. However, the

recurring expenditure incurred on security, once a project goes on stream

could to be charged on the project developer.

The cost of access roads should not be included in the project cost, as

development of hydro projects triggers economic and commercial activities

around the project site and results in economic benefit to the State. Inclusion

of R&R, flood moderation costs, along with the provision of 12% free power

to the State in the capital cost of the project needed reconsideration as the

provision did not apply to thermal power projects.

20

Major challenges and responses:

Development of Hydroelectric projects has thrown up a number of important

challenges, the world over and particularly in Indian context. Over a period

of time, experiences have been acquired and India is responding to these

challenges in the following manner.

a) Impact on Environment: Hydroelectric projects do create

environmental issues emanating from sub-emergence of large

areas also involving forest. The Govt. of India has a

comprehensive legislation on environmental issues and based on

this legislation, there are well laid down principles and

guidelines. Environment Impact Assessment studies when

properly carried out throw up the tasks to be undertaken by the

project development agencies. Ministry of Environment &

Forest is working on a plan to create Forest Bank which would

entail creation of huge afforestation with funding from project

development agencies in advance so that this issue could be

adequately responded. The mechanism of compensatory

afforestation through the Forest Bank will enable quicker

clearances of projects.

b) Rehabilitation & Resettlement (R&R) of Project Affected People

(PAP) is another major issue affecting the smooth execution of

21

Hydroelectric projects particularly where in submergence areas,

the number of project affected people are large.

c) Another issue of concern is in relation to safety of dams. Here

again, experiences from some of the very large projects of the

country have led to considerable amount of knowledge base and

it is expected that in future projects, studies and findings on dam

safety could provide much higher degree of confidence. Some of

the Indian institutions have equipped themselves both with

hardware and software to properly address these concerns. Where

required, project development agencies do depend on expertise

available anywhere in the world for in depth studies and

guidance.

d) In view of complexity in development of Hydroelectric projects,

particularly large ones, emanating from dam height,

submergence, ramification of submergence, dam safety, drinking

water schemes, irrigation, infrastructure etc., the process of

clearances obviously gets linked with multiple agencies and

authorities. Short cuts could create problems.

e) Construction time is another area of concern, which needs to be

compressed. Large projects have taken inordinately long time.

There are two major aspects which could make a difference – one

is relating to construction management techniques starting from

planning to monitoring and another relate to construction

22

technology. Here again, there are recent examples of making

substantial improvement on both the fronts. Some of the projects

which have been sanctioned in the recent months are being

targeted to be completed within 4-5 years.

f) Communication with press, media and people at large to reduce

the communication gaps on merits of hydro-projects and on

migratory measures is another area of challenge which is being

addressed. This also needs to be taken up appropriately at global

level.

Opportunities in Indian hydroelectric sector:

About 14,000 MW of additional capacity in the period 2002-2007 and

50,000 MW of additional capacity during the period 2002-2017 throw open

enormous opportunities for national and international agencies. The

opportunities fall in the following categories.

a) Preparation of DPR for the 162 schemes with over 50,000

MW capacity

b) EPC contracts for development of many of these projects

c) Package wise contracts in a large number of projects.

d) Investment as equity holder and project developer

e) J.V. with Indian Companies for developing projects

23

CONCLUSION

In order to achieve a growth rate of 7-8 % as envisaged in National policy of

India ,it is also required to tap all the small Hydro Power potential of the

country. The encouraging performance shown by the Tawa project itself set

an example for inviting private investment in the small Hydro Power Project

sector, especially in view of the fact that Large Hydro power projects involve

huge capital investment and long gestation period which private partners do

not afford to bear.

The utilization of small Hydro Power Potential is especially required in

all states where the utilized potential is very low like in MP and therefore

optimum utilization of the same may set up an stepping up stone for

achieving self sufficiency in power sector in country.

24

25