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New Delhi: As Indian Prime Minister Narendra Modi exhorts global leaders to embrace cleaner energy, he’s facing his own challenges in doing so at home.

Hydropower projects that would boost the country’s capacity by almost half are held up because of local opposition and concern that they damage the environment, according to the power ministry’s Central Electricity Authority, the agency reviewing technical parameters of such projects.

The delays threaten Modi’s plan to shrink India’s dependence on fossil fuels, provide electricity to its 1.3 billion people — about a fifth of whom lack access to power — and clean up some of the world’s worst air. The country, which is pursuing a $200 billion programme to boost generation through solar, wind and other renewable sources, also plans to tap hydro-electricity to meet its climate goals, part of its commitments at the United Nations global-warming talks in Paris.

“India’s past record of implementing hydropower projects leaves us with serious doubts about whether goals will be met," said Nitin Pandit, chief executive officer of the Indian unit of World Resources Institute, a Washington-based climate research group. “India’s hydro capacity has been delayed by a multitude of factors from cost overruns, hydrology and environmental issues to social unrest."

Those stalled developments, which lack CEA approval, would raise hydropower capacity by 24 gigawatts at a cost of about Rs1.44 trillion ($22 billion), according to Bloomberg calculations using an estimate of Rs6 crore per megawatt.

Government intervention

Some hydropower plants may require as much as Rs8 crore per megawatt of capacity because of geological conditions, construction delays and the cost of uprooting and relocating populations. Coal-fired plants, which account for almost 61% of India’s 280-gigawatt total power capacity, typically cost about Rs6 crore per megawatt.

The federal government intervened to resolve disputes that had delayed construction at the Teesta-III project in the northeastern state of Sikkim, according to Power Minister Piyush Goyal. The 1,200-megawatt project, backed by Goldman Sachs Group Inc., Morgan Stanley and some private equity companies, is expected to be commissioned by March 2017, said Deepak Amitabh, chairman of New Delhi-based PTC India Ltd., a minority investor in the plant.

Local opposition

Modi said in Paris this week that developed countries must take the lead in fighting climate change, calling for “aggressive mitigation actions" before 2020.

Water-propelled electricity also complements Modi’s clean energy plans by insulating the nation’s electricity grid from supply fluctuations caused by solar and wind plants. While hydropower is non-polluting, it faces opposition because it requires displacing large populations and is suspected of contributing to natural disasters. A government panel is examining the role hydroelectric projects played in the 2013 floods in the northern state of Uttarakhand that killed more than a thousand people.

“Hydropower has been fraught with environmental and logistical challenges, which have deterred investors," said Debasish Mishra, a Mumbai-based partner at consulting firm Deloitte Touche Tohmatsu India LLP. “The long gestation period of these projects has also been a hurdle to investments."

In addition to the stalled projects, there are 42 others, with a combined capacity of 26.6 gigawatts, that have been approved by the Central Electricity Authority but haven’t begun construction.

“People are misguided that hydro projects lead to natural disasters," S.D. Dubey, member of hydropower at the Central Electricity Authority in New Delhi, said in an interview. “We need to understand that hydro power is critical to our environment. It’s an important part of our global commitments." Bloomberg

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