Hydropower Projects in India


  • Hydropower projects needs attention as territorial disputes may affect the functioning.

Hydropower Generation

  • Hydropower is a renewable energy resource because it uses the Earth’s water cycle to generate electricity.
  • Water evaporates from the Earth’s surface, forms clouds, precipitates back to earth, and flows toward the ocean. The movement of water as it flows downstream creates kinetic energy that can be converted into electricity.
  • Hydropower supplies at least 50% of electricity production in 66 countries and at least 90% in 24 countries.

Hydropower technology in India

  • Hydropower technology is well-proven with efficiency rates which could go up to 90% depending on the design power.
  • The advantages of longevity and cost of generation doesn’t reflect in trends in India’s energy mix which is dominated by thermal power (70% share).
  • Hydro, with an installed capacity of 42,783 MW, has a share of around 14% in 2016 coming down from 46% in 1966. This clearly indicates that there is an over-dependence on thermal plants vis-à-vis hydro assets.
  • The plummeting share of hydro in the overall power portfolio is primarily attributable to the consistent non-achievement of targets.

Challenges to the Government of India

  • As on Mar’16, the hydro-electric schemes in operation account for only 31% and thus, the bulk of the potential (69% including the projects that are under development) remains to be developed.
  • Globally, countries like Canada and Brazil had harnessed around 48-69% of the economically feasible potential back in 2009.
  • Many projects had been allotted under Purchasing Power Parity (PPP), however, some of these projects have struggled in the past due to several reasons such as R&R issues, land acquisition problems, clearance and approval procedures, capability of developers, etc.
  • These issues resulted in a declining share of hydropower in India’s power mix by almost 32% in the last 50 years.
  • Building a dam across a river floods the land that would otherwise be available for use, alters the landscape, affects the local community that would have lived and worked on the flooded land, alters the character of the river.
  • Diverting a river affects the nature of the countryside and does not lend itself to use on a large scale.
  • Permanent complete or partial blockage of a river for energy conversion is adversely affected by variations in flow.
  • Building large-scale hydro power plants can be polluting and damaging to surrounding ecosystems.
  • Changing the course of waterways can also have a detrimental effect on human communities, agriculture and ecosystems further downstream.
  • Hydro projects can also be unreliable during prolonged droughts and dry seasons when rivers dry up or reduce in volume.
  • Due to inherent risks associated with the sector, such as geological surprises, natural calamities, environmental & forest issues, and rehabilitation and resettlement issues apart from commercial risks and change of river basin during operation, many developers are averse to enter into the sector.
  • The major commercial constraints for the private developers are high capital cost and long payback period due to high gestation period which may also create issues in financing.


  • The Government of India has taken many policy initiatives for sustainable hydro-power development.
  • In 2008, the government came out with a Hydro Policy with an objective to achieve the implementation of these projects.
  • The Centre and many states have initiated hydro projects through PPP to attract investors for the development of water resources in an environment-friendly manner and to generate revenue while ensuring project viability.
  • Odisha adopted (PPP) policy in 2007, Arunachal Pradesh (2011), Uttarakhand (2012) and Andhra Pradesh & Gujarat had framed PPP policy.

Changing paradigm of India hydro-power

  • Prime Minister Narendra Modi has been saying to Nepal and others that Bhutan is a good example to show how a country can prosper from hydropower generation and export.
  • India has been importing substantial amount of power from Bhutan for over a decade now, and general impression is that power import from Bhutan has been going up.
  • India imported 5.899 Billion Units (BU, one unit is one kilowatt hour) way back in 2008-09, the import has been lower than that figure every year in the following six years.
  • In the just concluded 2014-15, as the latest figures from the Central Electricity Authority, India imported 4.97 BU.

What can be done?

  • Though, PPP is most suitable for hydro-power projects as it solves budgetary constraints, guarantees faster implementation of projects, and balances project risks, however, without monitoring of implementation, it may lead to disasters like one happened in Shree Maheshwar Hydel in Madhya Pradesh.
  • Central government needs to setup a separate body in partnership with the state governments for active monitoring of the progress of Hydro projects.
  • Government should resolve the impediments by directly overseeing issues such as land acquisition, rehabilitation & resettlement of affected people,
  • expediting environment and forest clearances, interstate disputes and law & order issues arise due to these projects.

  • The other issue related to Hydropower projects is financing and evacuation.
  • Hydro Power projects are capital-intensive and financing them for long such as 20 years is really a challenge.
  • Most of hydropower projects are located in remote sites in states which do not have enough demand for electricity that presents geographical constraints in developing requisite transmission infrastructure for evacuation.


  • India has vast potential for hydro-power development. A major part of the unexploited potential exists in Himalayan and North Eastern regions.
  • The hydro sector inherently poses few tasks primarily on account of risk associated with implementation that can be mitigated with timely involvement of government agencies to be made responsible for.
  • The private developers will participate themselves only if they find compatible risk adjusted returns in the hydro sector.
  • Thus,
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