Hydro power with FDI may hold key to India’s energy security

NEW DELHI: With coal supply and prices being erratic and ever increasing controversies over nuclear energy, hydro power holds a big promise for ensuring energy security to India while bringing in FDI, experts say.

"Given India's tight domestic coal supply and increasing reliance on imported coal, hydro capacity provides the country with greater energy security,” says a latest report by HSBC Global Research.

One the one hand, thermal power producers are yet to come to terms with Coal India Limited for uninterrupted fuel supply, while on the other nuclear power projects in Maharashtra and Tamil Nadu are faces with prolonged uncertainties, power sector analysts say.

Hydel projects could also attract FDI as demonstrated at the 1200 MW Teesta-III Hydel project on the river Teesta in Sikkim where in six PE players have invested Rs 750 crores. As much as 70% of the project work has been completed in a record time of five years and the first unit from Teesta-III may start generating power in a year, an official associated with the project said.

Leading analyst Mr. Sudip  Bandyopadhyay, MD and CEO of Destimony Securities, said: “With potential FDI availability, including possible World Bank support, many similar projects can be successfully established along the Himalayan rivers.”

Mr. Nilesh H Karani, Head of Research at Magnum Equity Broking, pointed out: “Himalayan glaciers melt in summer and the rivers supply adequate water for hydel projects in the region. Teesta stands out as good example of harnessing the hydro power.”

Mr Bandyopadhyay explained that “Hydro-electricity is one of the leading sources of clean energy.  For an energy starved nation like India which has been blessed with enough rivers, the potential of generating hydro-electricity in a cost effective manner is significant.

“At present with only 40% of Hydel power potential being tapped, India as a country has a huge scope of exponentially increasing hydel power capacity and reduce pollution through this clean and green power, he pointed out.

On harnessing hydro power, Minister of State for Power Mr K.C. Venugopal recently said in a written reply to a question in the Lok Sabha, out of the identified capacity, 33320.8 MW i.e. 22.93% has so far been developed and another 15130 MW i.e.10.41% of is under development.

He admitted that about 66.66% of the identified potential is yet to be developed.

A World Bank report said that severe power shortage is one of the greatest obstacles to India’s development. Over 40 percent of the country’s people -- most living in the rural areas -- do not have access to electricity and one-third of Indian businesses cite expensive and unreliable power as one of their main business constraints.

“Poor electricity supply thus stifles economic growth by increasing the costs of doing business in India, reducing productivity, and hampering the development of industry and commerce which are the major creators of employment in the country,” it said.

On assisting India in Hydel projects, the World Bank said it aims to assist the Government of India in meeting its targets for hydropower expansion in a sustainable manner. This entails not just ensuring financial, economical, and technical soundness but also meeting social practices which have been developed by the industry in recent years, and safeguarding environmental assets for future generations.

The Bank has been engaged in hydropower in India since the late 1950s. Several of its past engagements have been difficult, with Bank support for a number of potential hydropower projects, including the Sardar Sarovar project on the river Narmada, being cancelled before they were commissioned. The two most recent Bank engagements, the Nathpa Jhakri and Koyna IV projects which were completed in 2002 and 1998 respectively, have benefited from the lessons (FAQs) of earlier hydropower development, including more socially and environmentally sensitive safeguard policies.

At the request of the Government of India, the World Bank is supporting one hydropower project in the country -- the Rampur Hydropower Project downstream from Nathpa Jhakri on the River Satluj in Himachal Pradesh and is currently evaluating proposals for supporting two more hydropower projects in the country - the Vishnugad Pipalkoti Hydropower Project on the River Alaknanda in Uttarakhand and the Luhri Hydro Electric Project on the River Sutlej in Himachal Pradesh. While the Rampur Project is under construction, the Vishnugad-Pipalkoti and Luhri Projects are in varying stages of preparation.

The World Bank is also assisting the state governments of Himachal Pradesh and Uttarakhand adopt a river-basin approach in the planning and development of cascaded hydropower systems. The two mountain states that have made hydropower generation a significant development priority, had asked for Bank assistance in initiating a River Basin Development Optimization Study that uses the Satluj and Alaknanda rivers as case studies which has been completed and discussions are ongoing on how to take this work forward. The Study also aimed at forging effective and equitable systems of cost-and benefit-sharing among all stakeholders, including developers and operators, affected local communities, and host states.

Teesta & Sikkim may provide succor to power-starved North

The tiny Himalayan state Sikkim may well provide the much needed succor to part of North India which reel under chronic power crisis.

Sikkim, which taken up the challenge to harness hydro electric power from its running rivers like Teesta with Teesta Urja series of six projects, is well on its way to complete the largest among them – Teesta-III next – year.

With this, experts say, Sikkim sets the new trend for developing hydel projects as the country is blessed with bounty of rivers flowing from Himalayan glaciers during summer when the power consumption is at its peak. Development of hydro power projects along the Himalayan river course thus could be a win-win situation for the people and the governments.

The 1200 MW Teesta-III is the largest of the six and it will not only give power virtually free to Sikkim but supply electricity to northern and eastern states which reel under chronic power shortages.

As much as 99.2% of Tunneling Works was already completed (around 34.4 Km out of total 34.6 Km). The Excavation of 13.824 Km of Head Race Tunnel is also complete. 

Power produced to be transmitted till Kishenganj through 400 KV DC line to be constructed by Teesta valley Power Transmission, a JV between Teesta Urja Ltd and Power grid Corporation of India Limited (PGCIL). PGCIL is to wheel the power to the beneficiary states in the northern region beyond Kishenganj.

A World Bank report notes that severe power shortage is one of the greatest obstacles to India’s development.

Over 40 percent of the people -- most living in the rural areas -- do not have access to electricity and one-third of Indian businesses cite expensive and unreliable power as one of their main business constraints, it says.

Poor electricity supply thus stifles economic growth by increasing the costs of doing business in India, reducing productivity, and hampering the development of industry and commerce which are the major creators of employment in the country, it says.

With the issues like irregular coal supply, volatile price fluctuation and increasing pollution hazards casting uncertainty over thermal projects, hydro power clearly stands out as one of the best suited alternatives.

Power sector analysts say hydro power projects are zero pollutant, as compared to thermal projects which reportedly contribute to half of global carbon emissions and India relies on thermal power to the extent of 60% of its consumption today. Even the cost of raw material – water – is nil.

Some may even call it Water Gold! Look at this HSBC Global Research that says increasing hydro power generation capacity would help in strengthening India's energy security. "Given India's tight domestic coal supply and increasing reliance on imported coal, hydro capacity provides the country with greater energy security,” the report says.

The government admits India’s failure to tap hydel power. In a written reply to a question in Lok Sabha, the Minister of State for Power Mr K.C. Venugopal said out of the identified capacity, 33320.8 MW i.e. 22.93% has so far been developed and another 15130 MW i.e.10.41% of is under development. He said that about 66.66% of the identified potential is yet to be developed

As World Bank says, Hydropower plants can also start up and shut down quickly and economically, giving the network operator the vital flexibility to respond to wide fluctuations in demand across seasons and at different times of the day.

This flexibility is particularly important in a highly-populated country like India where household electricity demand is a significant portion of total demand and this demand in concentrated in a short period of time (usually in the evening).

As an illustration, if the approximately 150 million households in India were to turn on two 100 watt light bulbs at 7 pm, the power system would experience an instantaneous surge in demand of about 30,000 MW! 

Teesta Urja set to bring relief to Sikkim

GANGTOK: Men and machines are racing against time to complete the work on the Teesta – Stage III Hydro Electric Project which is expected to mitigate the ongoing power crisis in the tiny Himalayan State.

Sikkim which is endowed with vast hydro power potential and Teesta is the main river stream in Sikkim. The potential of Teesta River is being harnessed through a cascade of six Hydro projects.

The 1200 MW Teesta-III is part of this cascade development – the highest capacity power project in Sikkim. 

The Teesta Project was conceived as part of cascade development of river Teesta by CWC in the year 1974. An SPV called “Teesta Urja Limited” was formed in April 2005 and Implementation agreement signed with the Sikkim Government in July 2005.

The project received all statuary clearances in Record time.  The construction is being executed under EPC by a consortium led by M/s Navayuga Engineering Company Ltd.

As much as 99.2% of Tunneling Works completed (around 34.4 Km out of total 34.6 Km). The Excavation of 13.824 Km of Head Race Tunnel was also completed. 

Power produced to be transmitted till Kishenganj through 400 KV DC line to be constructed by Teesta valley Power Transmission , a JV between Teesta Urja Ltd

and Power grid Corporation of India Limited (PGCIL). PGCIL is to wheel the power to the beneficiary states in the northern region beyond Kishenganj.

The positive news about the progress of Teesta-III comes as a big relief to the people of Sikkim who are bracing themselves to pay higher tariff.

Power Secretary AK Giri had said that the state currently is procuring electricity from NTPC and thermal power is subject to vagaries of coal supply and prices. As such the price per unit Rs 3 will be applicable from this month itself, Mr Giri said.

Latest updates of Teesta-III

• The Project is conferred with Mega Project Status by the Ministry of Power, Government of India on 2nd June 2010.
• River Diversion achieved on 15th January 2010.
• Around 99.4% of cumulative tunneling completed in the project.
• 71% of the Rock filling completed in Concrete Face Fill Dam (CFRD).
• Cut off Wall Excavation works commenced in Dam Site.
• HRT Excavation achieved on June 4, 2011. Till date 5856 m of overt lining completed.
• Surge Shaft - Break Through achieved between the pilot hole and sinking face on July 8, 2011.
• Vertical Pressure Shaft 1 (645 m): Excavation completed.
• Vertical Pressure Shaft 2 (645 m): Break Through achieved between the pilot hole and sinking face on July 30, 2011.
• Electro-Mechanical works commenced in all six units.
• Steel liners erection commenced in Pressure Shaft.