Hydropower in India
Suveda Bobbili & Ann Mary John

An overview of the hydropower sector of the country, with a special focus on small-hydro projects​

India is currently the world’s fifth-largest hydropower producer with a total installed capacity of 50 GW. [i] The first hydro-electric power plant in the country was established in Darjeeling, in 1898 and then Shivanasamudra in 1902. As of March 31, 2020, 13.61% of India’s electricity demand is met using hydropower (large and small hydro), while other renewable sources (wind, biomass power/cogeneration, waste to energy, solar power) constitute 22.24% of the supply. [ii]

The flexibility of our hydropower systems came under test on April 5, 2020, when the Prime Minister called for a nation-wide nine-minute lights-out vigil as a display of unity to "fight the darkness of the coronavirus pandemic”. Between 8.45pm and 9.10pm that day, electricity demand fell and to match the reduction, hydropower generation was then quickly reduced from 25,559 MW to 8,016 MW; A change of around 31 GW was handled impressively. This earned our system accolades from across the world.

The hydropower sector comes under the Ministry of Power (MoP) and small-hydro comes under the Ministry of New and Renewable Energy (MNRE). In 2019, the Cabinet granted renewable status to large-hydel projects thus giving it access to incentives like financial assistance and cheaper credit. [iii] Hydropower plants are divided into different categories based on different criteria. Following is an illustration.

India has an estimated hydropower potential of 1,45,000 MW and only around 26% of it has been exploited yet. [iv] Following is a comparison [v] of the potential, and installed capacities in the small-hydropower sector, state-wise. 


Few states in the country exhibit enviable performance in the hydropower sector. The promoting factors for a large number of SHPs in these states can broadly be divided into two categories:

1. Financial assistance and government policies.
2. Geographical factors

Special status states like Himachal Pradesh, Uttarakhand, Arunachal Pradesh, and Jammu Kashmir [vi] avail financial assistance of Rs.1.5 crore per MW limited to 5 crore per hydropower project and for other states, Rs 1 crore per MW limited to 5 crore per project, indicating that the special states receive an additional minimum financial assistance of fifty lakhs compared to the other states. In the case of the government division, extraordinary budgetary help given by the MNRE for extraordinary category states is Rs 7.5 crore per MW constrained to Rs 20 crore per project and for the remaining states, this help is Rs 3.5 crore per MW constrained to Rs 20 crore per project. Also, monetary aid of Rs 1 crore per MW constrained to Rs 10 crore per project is granted by the MNRE for the redesign and repair of the old SHPs owned by the government. Specifically, the plenitude of perennial streams empowers the Himachal region states to offer power to neighboring states, such as Delhi, Punjab, and Rajasthan. Himachal Pradesh has an assessed 23,000 MW of hydel potential, which accounts for 25% of India’s add up to hydel potential. Of this sum, 8,368 MW is as of now being utilized by hydropower ventures in Himachal Pradesh, with an extra 3,805 MW within the handle of being abused.

Case Study: Jammu & Kashmir
Let us have a look at Jammu and Kashmir's status in this wake. The total hydropower generating capacity has been reduced by one-third of its installed capacity due to the Indus Water Treaty that took place in 1960 between India and Pakistan which is stopping the J&K state government from enjoying water capacity on its major waterways like Jhelum, Chenab and Indus streams. On the bright side, the state continues to perform notably well. The following policy is an illustration of how the state enhances the SHPs:

● No entry-fee will be charged by the state government on the types of gear utilized for the establishment of SHPs. Moreover, the state government assists in cases required, by apportioning control ventures for a settling period of forty years at the rate premium of Rs.1 per square meter.

● The state government gives an additional 10% appropriation on capital speculation subject to the ceiling price.

● The State Government has presently engaged impartial home credit within the state.

● The ‘‘water client charges’’ for smaller scale, scaled-down and little hydro projects are exempted for a period of ten years from the day these ventures are completely commissioned. 


Current Scenario [vii]
About 7,000 MW capacity was targeted for installation through Small hydropower projects by the end of the 12th Five Year Plan period i.e. by 2017. Of this, 3,395 MW i.e. 48.50 per cent had been created by the end of the 11th Five Year Plan period i.e. by 2011-12. During the 12th Five Year Plan period, as of 2013-14, MNRE added just another 408 MW and was running behind its target by 38 per cent. This implied that a significant 3,197 MW capacity would be required to be added in the remaining three years of the 12th Five Year Plan period in order to be able to meet the target for development of small hydropower. In eleven states endowed with 81 per cent of the National Small hydropower potential, the exploitation varied from5 to 41 per cent of the potential. MNRE had identified 6,474 potential sites with an aggregate capacity of 19,749 MW in 29 states for setting up Small hydropower projects. As of 2013-14, 997 projects with capacity of 3,803 MW were installed. Thus, of the total capacity identified, only 19 per cent had been exploited so far. 254 projects (895 MW) are under implementation.

Following are some reasons observed through audit by central agencies, that act as hiccups to the progress in the sector:

● Delay in conducting feasibility studies for identifying potential sites in order to set up small hydropower projects
● Failure in submitting Detailed Project ReportsPR) by independent power producers.
● Delay in approvals to DPRs, project allotments, land acquisition, procuring forest and environment clearances.
● Negligence of contractors, midway changes in design.
● Deficiencies in post-commissioning maintenance of the projects.
● Non-recovery of liquidated damages, environmental dues, commitment fees, diversion of funds, excess payments to developers, non-revision of tariffs, etc.
● Deficiencies in monitoring and evaluation of projects by MNRE and State agencies.


The goal behind using sustainable sources of energy is to leave minimum impact on the environment. To an extent, the use of hydropower helps in this wake. But serious assessments are required as to whether the setting up and working of plants disrupt the livelihoods of the communities living nearby, aquatic life and biodiversity. Unwanted emissions should be kept under constant watch. Planning and building of new plants are to be foolproof. This is where the Environmental Impact Assessment (EIA) becomes of grave importance. It has become common across the country for companies to dilute the concerns raised by promising to bring about mitigation rather than checking for impacts. The scrapping of the EIA will let private as well as public agencies to act environmentally irresponsible. This can result in massive attacks on the resources, and sustainable development will become a thing of the past, as the race to attain optimum profit becomes ever-nastier.

If our hydropower resources are utilised sustainably, it has the potential to meet the energy needs of the country and bring down the pressure on environmentally-harmful sources like coal and other fossil fuels. Collective action is required from the government, responsible agencies and most importantly, the public should step up and vouch for more green energy and sustainable growth in every way possible. 



[i] 2020 Hydropower Status Report
[ii] World Development Indicators | The World Bank
[iii] Cabinet approves renewable status for large hydropower projects - ET EnergyWorld
[iv] FAQs on Hydropower | Government of India
[v] Untitled
[vi] Special status removed on 5th August 2019
[vii] https://niti.gov.in/sites/default/files/SDG-India-Index-2.0_27-Dec.pdf