State government entity Himachal Pradesh Power Corporation Ltd (HPPCL) is likely to commission its first set of projects in FY17, albeit with a delay of at least a few years. Speaking to Projectmonitor by phone, an official spokesperson of Shimla-headquartered HPPCL said that the corporation is likely to see four projects—Kashang-I (65 mw), Kashang-II and III (totaling 130 mw), Sainj (100 mw) and Sawra Kuddu (111 mw)—turning operational in FY17. Work on all these projects is in advanced stage although impediments like geological challenges, social unrest and natural calamities have set back their commissioning schedules by a few years.
The Sawra Kuddu project in particular was supposed to have commissioned by March 2011 but poor geology that was encountered during construction stage has delayed the progress. The project also faced impediments relating to the civil works contract. The project was originally to come up through a 2004-incorporated special purpose vehicle Pabbar Valley Corporation Ltd that was subsequently merged with HPPCL in mid-2007. The cost of this 3×37-mw project has risen sharply from Rs.559 crore (at the time of clearance in 2004) to nearly Rs.1,200 crore today.
Himachal Pradesh Power Corporation Ltd was formed in December 2006 for harnessing the hydropower potential of the northern state. It could start independent operations only in 2008 and is today entrusted with 21 hydropower projects aggregating 3,114 mw. It is also responsible for the 5-mw Berra Dol solar power project in Bilaspur district.
Discussing the hydropower scenario in Himachal Pradesh, the official said that the Himachal Pradesh State Electricity Board is entrusted with hydropower projects of less than 25 mw while HPPCL works on projects above 25 mw of installed capacity. Besides, there are independent power producers that are offered large projects under a concession agreement. The grantor of concession in this case is the Department of Energy, Himachal Pradesh. There is also an agency called Himurja that develops micro projects (of less than 5 mw capacity) by involving private sector participation with a priority to local entrepreneurs. Lastly, Himachal Pradesh is also home to projects owned by Central government agencies like NHPC, SJVNL and Bhakra Beas Management Board. The state gets its share according to pre-determined agreements.
Independent power producers are destined to play an important role in adding hydropower generation capacity. According to official information available, over 75 projects aggregating well over 4,200 mw have been awarded to the private sector—both Indian and foreign. These projects are under various stages of execution and include some that are already in operation. As of June 30, 2015, there were six operational private power plants in Himachal Pradesh, with an aggregate installed capacity of 1,748 mw. Prominent amongst these are Karcham Wangtoo (1,000 mw) and Baspa-II (300 mw). Both these projects were originally set up by Jaiprakash Group but were recently acquired by JSW Group.
Speaking of independent power projects, it is worth recalling here the long saga of the 960-mw Jangi-Thopan-Powari hydropower project. The project has been mired in controversy for nearly a decade now. It was offered to Brakel, a Netherlands-based company in 2006. However, this allotment was challenged in court and the process was stayed after technical inadequacies were found in Brakel’s bid. When the project recently came up for award, and that too after several futile attempts at attracting a developer, there were no takers once again. Very recently, the Himachal Pradesh government offered the project suo moto to Reliance Infrastructure (Anil Ambani Group). Reliance Infrastructure, it may be mentioned, was the next-best bidder when the project was awarded to Brakel. There has been no official communication from the private developer in acceptance or rejection of the offer. However, the Himachal Pradesh government has indicated that if the offer is declined, Jangi-Thopan-Powari will come up for award, yet again. It is intriguing to observe that Himachal Pradesh has not been able to find suitors for its celebrated and highly promising Jangi-Thopan-Powari project. An industry analyst pointed out that the royalty and upfront payment sought by Himachal Pradesh was a bit on the higher side. Besides, topographical challenges could potentially delay commissioning, prolonging returns on investment. Incidentally, in October 2014, Himachal Pradesh invited bids from private parties for development of 37 projects on BOOT basis. Ostensibly for lack of response, the last date of submission of bids has been extended to August 31, 2015.
Himachal Pradesh has a total hydropower potential of 18,540 mw in terms of projects with installed capacity of 25 mw or above. As of June 30, 2015, the northern states had 9,308 mw of installed hydropower capacity translating to 50 per cent exploitation of potential. Another 12 per cent (or 2,216 mw) is under implementation while 37 per cent (or 7,016 mw) is yet untapped.