New Delhi: Power minister Piyush Goyal said on Thursday he was working on a proposal to revive stalled hydropower projects to enable them to sell power at a competitive tariff.
Addressing industry executives at The Verdict, the Mint-CNBC-TV18 conference on Budget 2017 in New Delhi, Goyal said his ministry will seek cabinet approval shortly on a proposal for financial re-engineering of stalled hydropower projects. He said the provision for budgetary support will be invoked as a last resort as it was vital for projects to be self sustaining.
“We are working on revitalizing hydropower and see if tariff can be less than Rs5 a unit. Hydropower projects in hill states have become expensive due to associated infrastructure requirements. Budgetary support may be the last resort,” Goyal said, adding that the LED industry had become self sufficient and cost-competitive without government support.
Former power secretary Anil Razdan, who was present on the occasion, said the 175 gigawatts (GW) of renewable energy capacity the government is targeting, requires a strong component of renewable energy storage capacity and other sources of power to balance the grid. Hydropower projects have a long gestation period of 2-10 years, he said. Many projects got stalled due to problems relating to land, finance, and promoters.
Goyal said he would seek comments from all stakeholders, including NGOs, before finalizing the policy. The power ministry is keen to revive hydropower projects and attract fresh investments into this sector as it can be a valuable source of power that could balance the grid during the night and on cloudy days when solar energy supply drops.
Goyal asked industry executives to take the lead in investing. Union budget for 2017-18 presented by finance minister Arun Jaitley on Wednesday proposed steps to promote clean energy including lowering of import duty on tempered glass that goes into manufacturing solar cells, panels and modules.