Hydro-power key to India's energy security: Study

Mumbai, June 21 (IANS) With coal supply remaining erratic and controversies dogging nuclear energy, hydro-power could hold the key to India's energy security and put an end to power cuts, according to a study released here Thursday.

Given India's tight domestic coal supply and increasing reliance on imported coal, hydro-electric capacity with foreign direct investment (FDI) can provide the country with adequate power, says the report by HSBC Global Research.

While the thermal power producers have yet to be assured of uninterrupted fuel supply, nuclear power projects in Maharashtra and Tamil Nadu face uncertainties, experts say.

On the other hand, hydel power projects could attract FDI as proved in the 1,200 megawatts (MW) Teesta-III project in Sikkim where six players have invested Rs.750 crore.

This has resulted in nearly 70 percent of the work being completed and the generation from the first unit likely to start in a year, a top official associated with the project said.

Hydro-projects are more eco-friendly, cost-efficient and a renewable source. They do not emit green house gases unlike coal-based projects which contribute over 50 percent of global carbon emissions, the report said.

However, the tariffs of new hydro-projects, at Rs.3.50-4.00 per unit is close to that of imported coal-based projects due to the initial high fixed costs, long gestation period, low utilisation and high capital costs, but it could be offset from the sale of CERs (Certified Emission Reduction), it pointed out.

As per the Central Electricity Authority, hydro potential in India is estimated at 145 (gigawatts) GW, of which installed capacity is is around 34 GW and another 12 GW is under construction, or around 32 percent of the estimated total potential.

Nearly three-fourths of the balance 99 GW falls in four states, Jammu & Kashmir, Himachal Pradesh, Arunachal Pradesh and Uttarakhand on the rivers fed by melting ice.

With potential FDI availability, including possible World Bank support, many similar projects can be established along the Himalayan rivers, said Destimoney Securities CEO and MD Sudip Bandyopadhyay.

He explained that hydro-electricity is one of the leading sources of clean energy and for an energy starved nation like India blessed with many rivers.

Incidentally, Minister of State for Power K.C. Venugopal recently spoke in the Lok Sabha on the potential for hydro-power in India.

In a written reply Venugopal said that of the total identified capacity, around 33,320.8 MW (22.93 percent) has been developed.

The minister admitted that 66.66 percent of the total identified potential is yet to be developed.

A report of the World Bank, which has been involved in hydro-power in India since over five decades, said that severe power shortage, with over 40 percent of the country's population without access to electricity, stifles economic growth and hampers employment generation.

Ay present, the World Bank is supporting the Rampur Hydro-power Project on Sutlej river in Himachal Pradesh and evaluating giving support to two more - one in Himachal Pradesh on the same river and another on Alaknanda river in Uttarakhand.