Energetica India Magazine October-November 2021

HYDRO POWER 17 energetica INDIA- Oct-Nov_2021 2.2 Land Acquisition Land acquisition has been one of the other key reasons for delays in hydropower projects. The Land Acquisition, Re- habilitation and Resettlement Act, 2013, and its subsequent amendments have attempted to streamline the land acquisi- tion process through a number of provisions. However, some issues in the land acquisition process still remain. For instance, ideally, land acquisition should be completed before a project is tendered. In India, however, projects are often awarded with only part of the land physically acquired. This leads to delays on account of undervaluation of land price, dependence on state governments for land acquisition, etc. Furthermore, the unavailability of reliable land records with the requisite gov- ernment departments often adds to existing complexities. In addition, the development of associated infrastructure such as roads and bridges for improving accessibility to the project site increases the cost of project development, thus greatly affect- ing the financial viability of the project. Furthermore, the lack of infrastructure facilities such as schools and hospitals affects the movement of skilled manpower to isolated project sites. Hy- dropower projects are more than engineering ventures. As the land acquisition process is elaborate it requires public hearing and approval of the Gram Sabha. Resettlement and rehabilita- tion (R&R) issues are not only sensitive but also entail substan- tial cost. It has been experienced that projects do not envisage adequate cost on these items at the approval stage. Subse- quent arrangement means cost and time overruns. Adequate R&R cost should be made integral part of the project cost. The project management team should also include experts from social science, environment as well as communication. If HEPs could be allocated after obtaining requisite clearances on the pattern of Ultra Mega Power Projects, it would avoid undue delay and cost overrun. 2.3 Insufficient Market Depth and Scope The Indian power market is still at a nascent stage of develop- ment, with the current market structure preventing hydropow- er developers from realizing the potential benefits of meeting peak demand as the tariffs for both peak and off-peak pow- ers are still undifferentiated. The volume of short-term market, which allows different instruments for peak and off peak sup- ply, is also very low. Additionally, as highlighted before, with the introduction of huge renewable capacities in power systems, stability in terms of voltage regulation, reactive power control, etc., are immediate requirements. Following the adoption of the National Tariff Policy (2016), the CERC has introduced ancillary services regulations for the Indian power sector as the market till date has been extended only to frequency support ancillary services. Hydropower, which was originally expected to benefit as a result of these regulations, has found limited traction in the frequency support market, given the limited ‘un-dispatched’ surplus available from hydro stations. Moreover, it is observed that during high hydro periods, plants operate above 100% load, leaving limited margins for up-regulation without risking 2. Various Issues Impacting Hydro Power Project 2.1 DPR Approvals The current approval process for a detailed project report (DPR) is provided in section 8 of the Electricity Act of India, 2003. However, the existing procedure, which mandates the vetting of DPR documents by various entities such as the Geologi- cal Survey of India, the Hydrology Directorate and Inter-State Matters Directorate, Ministry of Environment, in addition to approvals from the CEA makes the entire process of prepa- ration and approval of DPRs fairly complex, time consuming and expensive. As a result, project developers are reluctant to invest adequate time and finances in DPR preparation, leading to inadequate project reports, which in turn result in disputes related to project cost escalations or revenue assessments.