(Seminar on Private Sector Participation in Hydropower Development, 7-9 May 2002, pp. RM 53-61)
Of all the non-conventional renewable energy sources, small hydro represents ‘highest density’ resource and stands in the first place in generation of electricity from such sources throughout the world. Current global installed capacity of Small Hydro Power (SHP) is about 50,000 MW against the estimated potential of 180,000 MW.
India has a history of 100 years in Small Hydro Power. However the country switched on early to larger hydro and pursued the same reaching an installed capacity of 21, 000 MW with only 500 MW of Small Hydro. Of late, environment driven awareness seems to have reminded us that what India needs is not the mass production but production by masses.
Small Hydro is environmentally benign, operationally flexible, suitable for peaking support to the local grid as-well-as for stand alone applications in isolated remote areas. Even if we ignore the CO2 abatement costs and ‘acid rain’ abatement costs of conventional thermal route, small hydro is benevolent on the following known hard facts of economics.
Short gestation and limited investments of Small Hydro are affordable by the private sector, enabling quicker electricity and economic returns. Fiscal incentives by Central Government and policy framework by State Governments are attracting private initiatives in Small Hydro. Satisfied by the progress made in implementation of the first line of credit for a target of 100 MW of capacity addition, World Bank has extended an additional line of credit amounting to US$ 110 million for development of 200 MW Small Hydro Power Capacity. This World Bank second line of credit which is operated in an entrepreneur friendly environment is likely to spin off an entirely new techno-commercial scenario paying the way for attractive business opportunity in Small Hydro Power.
