Prospect of Hydroelectricity as a Potential Substitute for Non-Renewable Energy – India
Why should I read this document?
This document is targeted for the following audience:
European SMEs and start-ups which provide innovative methods or ideas to tackle the challenges for the adoption of hydropower energy.
European SMEs and start-ups with technologically advanced features that are focused on the energy sector e.g., hydropower storage system, hydropower transmission, etc. who would like to enter the Indian market.
Energy demand in India is increasing continuously, driven by the country’s dynamic economic and population growth in addition to its fast modernization over the past several years. Primary energy consumption in the country has almost tripled between 1990 and 2018 and grew by 2.3% in 2019, making it the world’s third-largest energy consumer, after only China and the United States, with 5.8% of global share. Along with this, India is a large consumer of non-renewable fossil fuel. In 2019, coal continued to supply most (58%) of India’s total energy consumption, followed by petroleum and other liquids (26%), and traditional biomass and waste (20%). Other renewable fuel sources only account for a small portion of primary energy consumption, although the capacity potential is significant for other resources, such as solar, wind, and hydroelectricity (hydropower).
Hydroelectric power refers to a naturally available renewable source of energy that taps the energy produced from the movement of water in rivers and oceans. The force of flowing and falling water is harnessed to run water turbines to generate electricity. Hydroelectric power is clean, green and sustainable and is considered the cheapest source of power in the long run. The levelized cost of generation of this type of electricity is estimated at 30-40% of wind or solar power and 15-20% of fossil fuel.
It should be noted that India is endowed with large hydropower reserves with the total potential of 148 gigawatts (GW) at 60% load factor, ranking fifth globally for potential hydroelectric power capacity. However, despite the abundance of the reserves, the potential is far from being fully exploited. As of March 2020, the total installed utility-scale hydroelectric capacity was only 46 GW, representing only 31% of the total potential. Furthermore, the share of installed large hydroelectric power in India is progressively reduced to a low level of 12.3% of its total utility power generation capacity.
Over the years, the Indian government has implemented a number of policies and regulatory initiatives in order to promote hydropower development and facilitate investments in the sector. Recently announced measures include the National Tariff Policy released in 2016 which provided exemption to the hydropower sector from competitive bidding till 2022, and the non-solar Renewable Purchase Obligation (2018) which mandates that regional utilities purchase a portion of their electricity from hydropower. In March 2019, the Government of India accorded renewable energy status to large hydroelectric projects (HEPs), which enable new HEPs to receive concessions and green financing available to RE projects. Moreover, it announced that the capacity in India is expected to reach 70GW by 2030.
On Level 2 you can find information about trends and applications of hydroelectric power development in India, while Level 3 will tell you more about business activities (through case studies) in hydroelectric power development in India and how the EU has contributed to this country.
This level will offer a brief overview of the current hydroelectric power industry and its development in India. Main focus will be given on the existing hydroelectric power plants and hydroelectric power development in this country.
India currently has 197 hydropower plants capable of generating more than 25 megawatts (MW), according to the International Hydropower Association (IHA), plus nine pumped storage stations accounting for 4,786 MW capacities.
Five Biggest Hydroelectric Power Plants in India
India’s top five hydroelectric power plants are situated in the states of Uttarakhand, Maharashtra, Andhra Pradesh, Himachal Pradesh and Gujarat. Tehri Dam in Uttarakhand is the highest hydroelectric power project in the country with a maximum planned capacity of 2,400 MW, and is located at the confluence of the Bhagirathi and the Bhilangana rivers, near the city of Tehri. Its reservoir stores water not just for the generation of hydroelectricity, but also for irrigation and municipal water supply to other states of North India. The second biggest is the Koyna Hydroelectric Project, which is located close to the Koyna River and with a capacity of 1,960 MW. The third one on the list is the 1,670MW-capacity Srisailam Dam, which is located on the Krishna River in the Nallamala Hills near Srisailam temple, which falls under the districts of Kurnool and Mahabubnagar. The last two on the list are Himachal Pradesh’s Nathpa Jhakri Dam, with a capacity to generate 1,530MW of electricity, and the Sardar Sarovar Dam, which has a capacity of 1,450MW, respectively.
Importance of Hydroelectric Power Development in India
Given India’s heavy dependence on fossil fuels to meet its growing demands from rapid urbanisation and industrialisation, the Government of India has made strong climate change commitment to reduce the CO2 emissions intensity of its GDP by 33% to 35% by 2030 from the 2005 level, through its Intended Nationally Determined Contributions (INDC). While the expected large-scale renewable capacity additions (mainly from solar and wind) will help in meeting a substantial part of India’s INDCs commitments, power from these sources is well known for its inherent variability. For instance, at the Charanka Solar Park in Gujarat, the power output can go up to 650 MWp on a normal sunny day while the peak output may fall by as much as 85% on a cloudy day. Such variability will result in violations of voltage and frequency limits of the grid and is causing transient stability issues. Likewise, there have been several instances of sudden falls in the operating frequency of the grid due to sudden drops in wind generation. In South India, which has a significant installed wind capacity, wind generation drops from 2,000 MW to 200 MW over a duration of 1–1.5 hours, which usually translates to a fall of about 1.5 Hz in system frequency.
Hydroelectric power is the clean renewable source capable of providing grid-balancing and ancillary services. Undoubtedly, hydropower projects are able to almost instantly ramp up to meet peak load requirements; they can quick-start in a matter of minutes compared to 30 minutes or more for other sources, as well as being capable to run at zero loads and restore services more quickly than other sources; they have the ability to maintain system frequency by continuous modulation of active power and to control system voltages through the supply of reactive power; and they can provide spinning reserves/ additional power supply to support system stability in case of unexpected load changes/blackout support.
Several barriers to hydroelectric power development in India
Hydroelectric power development in India is saddled with several issues, such as contractual conflicts, environmental litigations and local disturbances. In fact, only 30% of India’s overall hydropower potential has been harnessed in spite of high hydropower potential. In addition to this, several hydropower projects are dropped out at development stages of these projects for various factors related to geology, hydrology and topography, critical electrical and mechanical works, delays in clearances, local issues, law and order problems, contractual disputes enabling infrastructure land acquisition. These issues have various effects on delay of project and attractiveness of the hydropower sector. Chiefly, these challenges can traced to some underlying barriers to hydropower development in four roadblocks: Issues in the project development life cycle, financing and risk sharing, insufficient market depth and scope and safeguards issues.
As water and water power are State subjects, the construction of hydroelectric projects (HEPs) is often delayed due to conflicts among riparian States. What’s more, India has several international issues across some river systems. In addition, HEPs are engineering ventures with large-scale socio-economic and environmental implications. HEPs often encounter geological surprises during construction and the land acquisition process can be elaborate which requires public hearing and approval of the village council; the associated resettlement and rehabilitation (R&R) issues are not only sensitive but also entail substantial cost. Thus, requisite clearances (e.g., environmental clearance and forest clearance) should be obtained before the allocation of HEPs and adequate R&R cost should be made integral part of the project cost.
This level will centre on relevant EU and Indian stakeholders and their actions contributing to the development of hydroelectric energy. The contributions from the EU will be highlighted in particular, most of which have been made through S&T collaboration with India.
Presence of local and global companies contributing to hydropower development
In general, local state-owned enterprises and private companies have been contributing to the development of hydroelectric power in India. The majority of India’s hydroelectricity is operated by the public sector through companies like NHPC Limited, SJVN Ltd, NTPC-Hydro, NEEPCO and North Eastern Electric Power Corporation. NHCP is India’s largest entity for hydropower development with capabilities to undertake all the activities from conceptualization to commissioning in relation to setting up of HEPs. Apart from hydropower, it has also diversified in the field of solar and wind power. NHPC currently has 7,071.2 MW of operational capacity from four power stations on ownership basis including projects taken up in Joint Venture. Additionally, private companies such as Jaiprakash Power Ventures and JSW Energy have also been engaged in operating hydroelectric power plant in India. JSW Energy is one of India’s leading power companies, which presently generate 4,559 MW, out of which 3158 MW is thermal power,1391 MW is hydropower and 10 MW solar power. They are present across several Indian states and have stakes in natural resource companies in South Africa.
Some global corporations like Statkraft, Druk Green Power Corporation, have also been players in the hydropower sector in India. Statkraft, a Norwegian state-owned electricity company, is the first foreign investor in the country’s hydropower space through its subsidiary SN Power in 2004. Its energy generation portfolio in India comprises two operating hydropower assets (Allain Duhangan and Malana) and one hydropower asset under construction (Tidong), all of which are located in the state of Himachal Pradesh. Leveraging on its global experience in hydro power energy management, the company provides electricity generation and revenue maximisation solutions to hydropower projects.
EU- India Collaboration in Clean Energy
In particular, India and the EU established the “European Union-India Clean Energy and Climate Partnership” in 2016, which aims at promoting access to and dissemination of clean energy and climate friendly technologies and encourages research and the development of innovative solutions. The partnership guides the energy and climate policy dialogue between the two parties and helps supporting joint projects and joint research. Current areas of collaboration consist of activities in integration of renewable energy and storage, smart grids, biofuels and energy efficiency in buildings.
In addition, the India-EU Joint Declaration on Research and Innovation was signed in 2012 during the 12th India-EU Summit in New Delhi. This declaration helped drive solutions to societal challenges in the field of health, water, energy and bio-economy through research and innovation. Examples of India-EU S&T Cooperation in hydroelectric power management are provided below.
SHAPE was designed to facilitate and strengthen the co-operation between EU Small Hydropower (SHP) Research and Market actors, with the overall objective of streamlining future research & development and promote R&D results in order to enhance penetration of SHP and know-how with the EU and on new markets in developing countries. SHAPE stands for “Small hydro action for the promotion of efficient solutions” and brought together an Indo-European consortium of 10 organizations (1 Indian and 9 European) of research institutions, universities, large industries and SMEs.
The objective of the project was to encourage networking between European and Asian counterparts, as also among Asian partners, to share experiences in the fields of development of renewable energy in Asia, and operationalise policies to mitigate air pollution in Asia. Its expected outcome included policies for the promotion of renewable energy in Asia and prospects and problems of large hydro power. The project was coordinated by the Asian Energy Institute in India.