EVALUATION AND SENSITIVITY ANALYSIS OF SMALL HYDRO POLICY OF DIFFERENT STATES

Abstract

Due to growing consumption of energy, India is continually becoming more and more dependent on fossil fuels such as coal, oil and gas. Increased use of fossil fuels causes environmental problems both locally and globally. India has renewable energy sources in abundance, the main ones being solar, small hydro power, wind, and biomass. Promotion of increased use of renewable energy sources is plank of a sustainable energy development. Over the last two and, half decades, the Govt. of India along with the state governments have been promoting development of small hydropower by the common man, industry, community and commercial establishments through fiscal and financial incentives. Many states have taken praiseworthy steps to promote renewable energy in their rural and urban areas. Achieving solution to environmental problems that we face today requires long-term potential actions for sustainable development. In this regard, renewable energy resources appear to be the one of the most sustainable and effective solution.The development of small hydro has been largely governed by state-level policies being the water project as state subject. The main objective of the policies is to reduce dependence on conventional sources of power generation and, to protect the environment. Generation of grid-quality power from renewable energy resources shall reduce dependence on conventional sources of power, encourage entrepreneurial investment renewable energy resources. Under policies fiscal and promotional incentives are extended to provide conducive atmosphere to attract private investment. Power generation is state subject in India. Different states have their own policies with respect to hydropower generation. Under the present study small hydro power policies of different states have been studied and policy impacts of different aspects in the different states on the generation cost have been analyzed. A sensitivity analysis of all the inputs aspects of policy like royalty, upfront fees, and wheeling charges has been made and the effect of these aspects of policy on the generation cost of different types and capacity of SHP plants has been carried out. It has been found that the policies of Jammu &Kashmir, Assam and Uttarakhand are the most conducive and economic for small hydro power development considering whole range of plant capacity i.e. up to 25 MW.