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Government clears way for private role in hydro power sector

The government has approved a greater role for private participation in hydro-power generation to solve the blackouts faced by the power sector.

The object of the new hydro power development policy is to exploit India's vast hydro-electric potential at a faster pace with emphasis on small- and mini-hydel projects.

Under the policy, the country will augment electric power by 9,000 mega-watt with 550 MW coming from private investors and the rest from the public sector, top level officials said.

There would now be a differential pricing for peaking power to facilitate greater investment in hydel projects which have the capability to supply peaking power in a cost-effective manner, they said.

Besides, a power development fund would be created by levying a cess on electricity consumed and using two-thirds of the proceeds to promote power development by the state governments.

The remaining one-third will be utilised by the central government for promoting hydel projects in the central sector and for investment in transmission lines for evacuation of power from inter-state mega hydel projects.

The officials said institutional mechanisms would be provided for geological risks involved in tapping hydro-power resources mainly because most of the potential lies in the relatively younger mountains.

The joint-venture framework would now be used for promoting hydel projects, the officials said. Procedures would be simplified for transfer of clearances from state governments to central public sector undertakings and state governments to the private sector.

Hydel projects will enjoy enhancement of ceiling limits for techno-economic clearance by the Central Electricity Authority in respect of projects promoted on the memorandum of understanding route.

Transfer of work relating to the development of small hydel projects up to 25 MW capacity from the power ministry to the ministry of non-conventional energy sources and providing a suitable incentive package.

UNI