Union Power Minister talks to State power ministers about self-inflicted problems
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A very good speech. He says the future of the country is more important than your next state election. "I have been in politics - I can tell you if you do the right things, people will still vote for you!!" 

India can't reach the goal of becoming a developed nation if power is not managed properly. India recently upped the renewables target to 450GW to assuage other countries on climate change, but there can't be renewables or any other form of power, if state discoms are making losses. Don't suffer losses he says, use the examples of Gujarat and Haryana - take strong criminal action against defaulters, and give incentives to good payers like 24x7 supply and cheaper rates. 

He says "our demand is increasing, we want to give people affordable 24x7 power" but:
♦ If power contracts are not honoured, then investors will stay away and foreign govts will complain to us.
♦ If discoms don't pay suppliers, banks will not lend to stressed power sector.
♦ If industry is paying 8 or 9 rupees, then you are overcharging - no industry will not come, you will not create jobs.
♦ Customers must have the right to choose from multiple sellers. The choice should be theirs - why should they pay more just because state discoms are inefficient, badly managed, and choose not to control theft?



Electricity diplomacy makes economic sense
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India benefits from expansion of its cross-border electricity exports, and Sri Lanka is just the latest to be targeted. India has large number of stressed thermal plants waiting for buyers of power, abundant coal reserves and a railways that depends crucially on coal freight. One difficulty is that viable thermal plants have benefited from lower domestic coal prices due to coal-market reforms, whilst stressed plants are stuck with expensive imported coal. Another is the renewables squeeze, with Govt's massive scaling up of solar PVs, where India is one of the cheapest producers, and of affordable hydropower for balancing the grid. Also, new high voltage DC (HVDC) power lines are nullifying transmission losses and increasing competition from remote or distant power plants; and air pollution control devices -- that eliminate 90 to 99.6% of toxic gases(!!) and a statutory requirement by 2022 -- will push up thermal per-unit costs by 10+%. Fortunately for these stressed plants, neighbours are willing to pay over-the-odds for power, and Indian govt is more than happy not only to oblige them, but earn diplomatic kudos from it. In saying this, gas-based thermal plants will get revived earlier as they can also balance the grid.
India looks at overhead electricity link with Sri Lanka

New solar mega-projects with high chance of success
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Solar PV mega-projects are proposed for the Gujarat desert (40GW), and for high-attitude plateau of Ladakh (35GW). These are barren lands with high solar incidence, but crucially, projects are in states with minimal credit or contract default risk. For example, Gujarat has high power consumption with a profitable, well-managed discom. Ladakh is a UT that can leverage NTPC's strong customer base. The projects should attract good investor interest and below-average tariffs.

Status of Jammu & Kashmir hydropower projects (Aug 2019)
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Centre will be stepping up efforts to develop the infrastructure following the Jammu and Kashmir Reorganisation Bill, and the creation of two new UTs. As UTs give Central government direct control over J&K’s affairs, it is expected to speed up the granting approvals for infrastructure projects. It will also provide good governance and reduce conflicts with the state government.

♦ NHPC plans a total of 3814 MW hydropower projects, either on its own or through JVs with the state government. These projects include the 800 MW Bursar project (fully owned) and the 850 MW Ratle project (JV with state entities). It is implementing the 1000 MW Pakal Dul, 624 MW Kiru and 540 MW Kwar hydropower projects in JVs with state entity and PTC India Ltd.

♦ NHPC has been the chief benefactor of the state, where it has invested Rs 21,000cr over 4 decades. Besides it gives 13% free power, and pays hefty water charges (Rs 5,400cr). NHPC is owed Rs 1,500cr, because J&K govt had halted payments since April 2012. It is seeking union power ministry’s intervention to facilitate recovery of unpaid dues. “The dues are pending for a very long time. Given sensitivities involved, NHPC continues to supply electricity to J&K," said a senior union government official.

Hydropower projects in India's North East
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Apart from J&K, some of the new hydropower projects in India on which the work is expected to start in full swing include 2,880 MW Dibang and 2,000 MW Lower Subansiri hydropower projects in Arunachal Pradesh and 500 MW Teesta-VI project in Sikkim. The other promising state is Himachal Pradesh. 

Total hydropower potential of India’s NE and Bhutan is about 58,000 MW. Of this Arunachal alone accounts for 50,300 MW. “Doors are open for projects in India’s North East. Hydropower is slated to play a very important role in the development and integration of the North Eastern states with the mainland India," said NHPC’s Joshi, adding “Projects given to private firms are not getting constructed, so Arunachal govt wants NHPC to take up these projects. We are interested if there are no legacy burdens".

Work needs to be expedited in view of China’s gigantic $62 billion south-north water diversion scheme of the rivers that feed downstream into the Brahmaputra. Out of 8 Arunachal river basins, Subansiri, Lohit and Siang are of strategic importance, as they are closer to the border with China.

Concessions to kick-start hydropower projects
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To expedite hydro projects, State governments have asked PSUs to take over the completion of stalled projects, which are mostly stuck at early stages due to financial, technical or legal reasons. For example, NHPC took over 500 MW Teesta-VI, a stressed project with Lanco, from insolvency procedures. Rs 5,750 crore will be spent on it. To boost the financial health of the sector, Centre has asked States to provide concessions to the extent necessary to make hydropower tariffs viable. Centre has already provided benefits, like treating hydropower projects as renewal projects and allowing debt repayments over 18 years rather than 12 years.

State concessions in two states (with more to follow?):
♦ 624 MW Kiru was restarted after J&K exempted it from GST (ie 50% of total), and minimised water charges & free power costs in the first 10 years.
♦ 10 new hydropower projects of 2,920 MW (worth Rs 28,000 cr) on Chenab river were signed with NTPC, NHPC and SJVN, where Himachal waived its share of GST (ie 50% of total) and deferred the 12% free power in the initial years.
States asked to forego free power to make hydro projects viable

Renewed thrust on hydropower projects 
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“Coal fire projects are on their way out slowly. The government of India has recognized the need for boosting hydro power. A great activity time for hydropower is foreseen by us," said Balraj Joshi, chairman and MD of state run NHPC Ltd. 
Hydropower projects are ideal to meet peak loads as compared to thermal power plants. These plants can be swiftly turned on and off, as compared to thermal power plants, helping the grid withstand fluctuations caused by intermittent supplies from solar and wind. Executing a hydropower project is time-consuming and tedious and involves a thorough survey and investigation and detailed project reports. Many projects are stuck due to  issues like resettlement of the affected population and infrastructure development, and this is leading to a decreasing share of hydropower in the country’s energy mix. 

Bringing back large hydropower
“Hydropower has been reclassified as renewable power. This will help in green financing," said NHPC’s Joshi. 
At present, India has an installed power-generation capacity of 357,875 megawatts (MW), of which around 13% or 45,399.22 MW is generated through hydroelectric power projects. Hydropower projects, often located in remote regions, are crucial to stabilize the grid as India looks to add renewable capacity of 450 gigawatts (GW) by 2030. Government plans to add hydro capacities of about 30 GW by 2022, which is over and above the existing hydro capacities of 45 GW. It is aiming to reach 175 GW in renewable energy basket which includes solar, wind and small hydro, from the current level of 80 GW. Large hydro will push the renewables energy target to 250 GW by 2022. 

With nearly 100 GW of hydro power potential in India’s rivers lying untapped because of high tariffs, the NDA government has approved a slew of measures under the hydro policy to make it competitive. Under the new hydro policy, large hydropower projects have been declared as renewable energy sources, making them a part of the renewable purchase obligation, which requires power discoms to buy a fixed amount of renewable energy to cut reliance on fossil fuels. Earlier, hydro projects up to 25 MW capacity were considered as renewables and were eligible for various incentives like financial assistance and cheaper credit. With the government's decision, hydro projects above 25 MW can also avail the benefits.

Making hydropower affordable
“So hydropower is not costly at all. It is very much comparable with solar despite giving 12% free power to the state and 1% free power towards local area development fund," said Joshi. 
At present, hydro power tariff is more expensive than other sources. Discoms are reluctant to sign Power Purchase Agreements (PPAs) for hydro power due to higher tariffs, particularly, in the initial years. New measures would allow back loading of tariffs (thereby reducing the rate) after increasing project life to 40 years, increasing debt repayment period to 18 years and introducing escalation by 2% pa. These measure would help rationalise the tariff by large hydro power projects. The average tariff from NHPC’s hydropower projects in Rs3.34 per kilowatt-hour (kWh). In comparison, wind and solar power tariffs hit record lows of Rs2.64 per unit and Rs2.44 per unit respectively, but have recently firmed up.

Surging electricity demand
The electricity demand in the country grew by 6.9% in the last quarter.  This comes as India made 26.4 million new electricity consumers, which according to Paris-based International Energy Agency (IEA) is the largest expansion of electricity access in the mankind’s history. Per capita electricity consumption has reached 1189 kilowatt-hour (kWh) as compared to a global average of 3600 kWh. 

Is hydropower back in India's energy mix?