Sajjan Jindal-led JSW Energy, that is reviving an old hydropower project plan and is scouting for acquisitions, has warned that the sector needs immediate attention as problems have crippled new projects.
The company is hoping to revive a 240-MW project it had planned in the Chamba district of Himachal Pradesh in 2007, which had to be put on the backburner as there were no buyers for electricity then. It now aims to build it with an investment of ?2,500 crore, with the hope to sign a power purchase agreement soon.
“We have put our bid to supply 240 MW in the tender floated by the Haryana government, and are awaiting the results, after which we will start work on the Kutehr project,” he said.
The company is upbeat on the hydropower units it had acquired from Jaiprakash Power as it has been able to scale up generation by improving operations and introducing better maintenance programmes to increase the number of productive days.
“We want the government to ask banks to finance hydropower projects because they are not very keen. Even the loan tenure needs to be changed to match the long gestation period of these projects. Also, the recognition of depreciation needs changes as it will make the projects more competitive,” said Sharad Mahendra, chief operating officer of the energy business at JSW Energy.
India’s hydropower generation capacity is around 45 gigawatts, accounting for only 13% of the country’s total generation capacity, of which the private sector’s share is only 3.2 gigawatts. The country has an estimated potential of 85 gigawatts at 60% plant load factor, but the development of the sector has been slow due to policy issues, slow approvals, lack of financing options and inconsistencies between the state and Centre since it is a concurrent subject.
(The reporter was in Himachal Pradesh to visit the projects at the invitation of JSW Energy.)