India Needs 18GW Hydro Capacity by 2030 to Meet HPO Norms: ICRA
India’s incremental hydro power generation capacity requirement is estimated to be about 18 GW by 2030, which corresponds to a 39 per cent increase over the existing installed hydro base, based on the notified hydro purchase obligation (HPO) norms and trajectory.
“It is however observed that HPO norms have been notified by SERCs in few states only, in line with policy targets. Hence, timeliness as well as consistency in the notification of HPO norms by SERCs in other states and subsequent implementation by the obligated entities remain a key monitorable,” Girishkumar Kadam, Senior Vice President & Co-Group Head – Corporate ratings, ICRA.
Gurgaon-based ICRA Limited, an independent and professional investment information and credit rating agency, said hydro capacity addition in India has remained sluggish with the significant execution challenges as also seen in the incremental capacity addition of about 22 GW between 2000 and 2021, representing CAGR growth of mere 3 per cent in hydro segment.
The share of hydro power in the overall generation capacity has declined considerably over the period, with a significant rise in thermal capacity addition seen in 2005 till 2015 and thereafter in the renewable energy segment.
“With improved tariff competitiveness of solar and wind energy and strong policy focus by the government, share of renewables including solar and wind energy segment is estimated to grow considerably in the energy generation mix, going forward,” ICRA said.
Hydro energy segment is systemically important from the grid perspective so as to meet the flexibility requirements or peaking power supply. The government has outlined policy measures over the last two-year period to promote the investments in hydro power through notification of HPO norms, long term trajectory for HPO as well as tariff rationalization measures.
Hydro power purchase obligation is set at 0.18 per cent for 2021-22 which, in turn, is set to increase upto 2.82 per cent by 2029-30 at national level, as notified by the power ministry.
