Hydropower development and policies in India: A case of
Himachal Pradesh in the northwestern Himalaya, India
and Jagdish Chandra Kuniyal
Department of General and Applied Geography, School of Applied Sciences, Dr. Harisingh Gour Central University,
Sagar, Madhya Pradesh, India;
Environmental Assessment and Management & Environmental Governance and
Policy (EAM & EGP), G.B. Pant Institute of Himalayan Environment and Development, Mohal-Kullu, Himachal
The currently existing three major options for power production in India and
elsewhere are hydro, thermal, and nuclear. From the viewpoint of efficient
production and low environmental cost, hydropower has become one of the
hydropower potential especially in the Himalayan region. Rainfall from
southwest monsoon, northwest winter rains, and heavy snowfall in winter
have been the primary sources of water potential in the region. The Indus, the
Ganga, and the Brahmaputra, the three major drainage basins in the Himalaya,
are huge sources for hydropower potential. Out of the total existing hydropower
potential in India, 21% hydropower potential has been harnessed so far,
9.8% potential is under construction, and 69.8% potential is yet to be tapped.
Energy; hydropower; Indian
Himalayan Region; policies
The energy sources have always been playing a major role in shaping cultures and improving living
standards of human beings. Today, there are more than 800 million people (19%) worldwide who
use electricity. Global energy use has increased by 70% since 1971. Looking at the demand from
developed and developing countries, it continues to increase at the rate of about 2% per year (WEC,
2007). The power consumption in the United States of America is more than 10,000 kilowatt hour
(kwh) per capita whereas in India it is less than 500 kwh per person per annum (Khurana, 2006).
Though total installed capacity of the power projects in the country has reached around 114,000
megawatt (MW), yet there is an overall energy shortage by 78% and peak energy demand shortage by
13% of the total supply (Sharma, 2005). The Government of India has planned to supply power to all
households by 2020. For this purpose, the currently existing three major options for power produc-
tion are hydro, thermal, and nuclear in the country. From a viewpoint of efficient production and
low environmental cost, hydropower has become one of the most important clean sources of energy.
The Himalaya has also the largest water tower in the form of glaciers outside the North and South
polar caps having an area coverage of 33,000 km
. As a result, the Himalayan region is known as the
third most important “water towers”of the world after South and North Polar regions. They provide
annually around 8.6 × 10
of water (Dyurgerov and Meier, 1997). Of the total area in the
Himalayan regions, 10–20% of the area is covered by glaciers while 30–40% remains under seasonal
snow cover stretching from 0.48 ± 0.43 to 2.20 ± 1.25 million km
(Bahadur, 2004). In India,
hydropower projects are classified mainly into micro (up to 100 kw), mini (101–2000 kw), small
(2001–25,000 kw), and large (more than 25 MW) projects (Saxena, 2005).
CONTACT Jagdish Chandra Kuniyal firstname.lastname@example.org Environmental Assessment and Management & Environmental
Governance and Policy (EAM & EGP), G.B. Pant Institute of Himalayan Environment and Development, Himachal Unit, Mohal-Kullu
Pin 175 126, Himachal Pradesh, India.
© 2016 Taylor & Francis Group, LLC
ENERGY SOURCES, PART B: ECONOMICS, PLANNING, AND POLICY
2016, VOL. 11, NO. 4, 377–384
Hydropower potential at global level
Hydropower is a major developmental activity in most of the parts of the world. In future, the major
scope of new hydropower development would be in Asia, Latin America, and Africa (Bartle, 2002).
In North America, hydropower is the most widely used form of renewable energy. The installed
hydropower accounts for 156 gigawatt (GW), out of which 66 GW exists in Canada, 80 GW in the
United States of America, and 10 GW in Mexico. Hydropower consumption accounts for 60% of the
total electricity consumption in Canada, 8% in the United States of America, and 19% in Mexico
Hydropower potential and development in India
In the post-independence era, a number of river valley projects were commissioned mainly to
increase agricultural productivity and to accelerate industrial development. Hydropower generation
in India began in 1897 when the first electricity generating station of 200 kw capacity came into
existence at Sidrapong (Darjeeling) on River Teesta in West Bengal (Mathur, 2003). The first major
hydropower project was constructed in 1902 with installed capacity of 45 MW at Sivasamudram in
Karnataka state (Naidu, 1992). This hydropower project is still working and supplies power to Kolar
gold mines. This major hydro project was followed by another project in 1905 in Jammu and
Kashmir state on River Jhelum with a capacity to generate 4000 kw electricity. As far as Himachal
Pradesh state is concerned in hydropower generation, it was 1932 when a hydro project with 48 MW
capacity came into existence at Jogindernagar (Uhl) with the support of then the Government of
Punjab (Mathur, 2003). Hydropower power grid system in India is divided into five regions, namely
north, west, south, east, and northeast (Naidu, 1992), and the potential for these regions is about
84,044 MW at 60% load factor (LF) whose installed capacity is 148,701 MW. In addition, 6781.81
MW installed capacity comes from small, mini, and micro hydel schemes; while an aggregate
installed capacity is 94,000 MW (CEA, 2007).
India ranks fifth in the world in terms of hydropower potential. Its theoretical hydropower
potential is estimated to be 2638 terawatt hours per year (TWh yr
) (WEC, 2007). The existing
hydropower potential in India still remains largely untapped. In the past 65 years, about 27,500 MW
has been harnessed which was 508 MW in 1947 and increased up to 9202 MW in 1991–2003
(Sharma, 2005). According to reassessment study by Central Electricity Authority (CEA), the
installed capacity comes to be 148,701 MW. Out of this total installed capacity, 53,395 MW exists
in the northern, 8928 MW in the western, 16,458 MW in the southern, 10,949 MW in the eastern,
and 58,971 MW in the northeastern regions. The existing hydropower potential in India is dis-
tributed into six major river basins, i.e., Indus, Ganga, central Indian rivers, west flowing rivers, east
flowing rivers, and Brahmaputra. Of the total existing hydropower potential in India, 21% hydro-
power capacity has been harnessed so far, 9.8% capacity is under construction, and 69.8% capacity is
yet to be tapped (Table 1).
Hydropower potential in the Indian Himalayan Region (IHR)
The IHR is 250–300 km wide stretching over 2500 km from Jammu and Kashmir in the northwest to
Arunachal Pradesh in the northeast. It is located between 21°57’–37°5’Nand72°40’–97°5’E. The IHR
comprises fully/partially twelve states of India, viz., Jammu and Kashmir, Himachal Pradesh, Uttarakhand,
Darjeeling district of West Bengal. This region has a total geographical area of about 533,604 km
39,628,311 inhabiting population. It represents about 16.2% of total geographical area and 3.86% popula-
tion of the country (Samal et al., 2000). The IHR, based on regional classification, is broadly divided into
the Eastern Himalaya, the Central Himalaya and the Western Himalaya. The glaciers melt in summer and
accumulate in ablation lakes from where it overflows when these get filled with melting water (Fujita et al.,
378 S. SHARMA AND J. C. KUNIYAL
1997). Rainfall from southwest monsoon, northwest winter rains and heavy snowfall in winter have been
the primary sources of water potential in the region. Out of the total identified hydropower potential
capacity assessed in India, more than 76% is identified as the total hydropower potential in the Himalayan
states of India. Out of this potential, 38.4% is harnessed so far, 85.9% is under construction, 53.46% is
going to be developed which is under construction, and 86.6% capacity is yet to be developed. Among the
eleven states, Arunachal Pradesh ranks at top with 50,328 MW capacity followed by Himachal Pradesh
with 18,820 MW. Out of the total available hydropower potential in the Himalayan states, 10.5% has
already been developed, 10.9% is under construction, and 78.6% is to be developed in coming future.
Development of hydropower projects and existing potential in Himachal Pradesh
All the five major river systems which emanate from the northwestern Himalaya, namely the
Beas, Chenab, Ravi, Satluj, and Yamuna, pass through Himachal Pradesh. In Himachal Pradesh,
Table 1. Region/state wise status of hydroelectric potential development in India (in terms of installed capacity: does not include
schemes below 3 MW up to March 2003 and thereafter up to 25 MW).
Identified capacity Capacity dev.
dev. + under dev. Capacity yet to be dev.
(MW) (MW) % MW % MW % MW %
Jammu and Kashmir 14,146 1864.2 13.2 899.0 6.4 2763.2 19.5 11382.9 80.5
Himachal 18,820 6085.5 32.3 4435.0 23.6 10520.5 55.9 8299.6 44.1
Punjab 971 1297.7 100.0 0.0 0.0 1297.7 133.6 0.0 0.0
Haryana 64 62.4 97.5 0.0 0.0 62.4 97.5 1.6 2.5
Rajasthan 496 430.0 86.7 0.0 0.0 430.0 86.7 66.0 13.3
Uttarakhand 18,175 2752.1 15.1 2154.0 11.9 4906.1 27.0 13269.0 73.0
Uttar Pradesh 723 510.2 70.6 0.0 0.0 510.2 70.6 212.8 29.4
Subtotal 53,395 13002.1 24.4 7488.0 14.0 20490.1 38.4 33231.9 62.2
Madhya Pradesh 2243 2243.5 100.0 595.0 26.5 2838.5 126.5 0.0 0.0
Chattisgarh 2242 137 6.1 0.0 0.0 137.0 6.1 2105.0 93.9
Gujrat 619 555 89.7 0.0 0.0 555.0 89.7 64.0 10.3
Maharashtra 3769 2653.3 70.4 0.0 0.0 2653.3 70.4 1115.7 29.6
Goa 55 0 0.0 0.0 0.0 0.0 0.0 55.0 100.0
Subtotal 8928 5588.8 62.6 595.0 6.7 6183.8 69.3 3339.7 37.4
Andhra Pradesh 4424 2017.5 45.6 404.0 9.1 2421.5 54.7 2002.5 45.3
Karnataka 6602 3448.3 52.2 230.0 3.5 3678.3 55.7 2923.7 44.3
Kerla 3514 1838.5 52.3 323.0 9.2 2161.5 61.5 1352.5 38.5
Tamilnadu 1918 1757.5 91.6 60.0 3.1 1817.5 94.8 100.6 5.2
Subtotal 16,458 9061.8 55.1 1017.0 6.2 10078.8 61.2 6379.3 38.8
Jharkhand 753 237.2 31.5 0.0 0.0 237.2 31.5 515.8 68.5
Bihar 70 44.9 64.1 0.0 0.0 44.9 64.1 25.1 35.9
Orissa 2999 1861.5 62.1 150.0 5.0 2011.5 67.1 987.5 32.9
West Bengal 2841 156.5 5.5 292.0 10.3 448.5 15.8 2392.5 84.2
Sikkim 4286 84.0 2.0 2309.0 53.9 2393.0 55.8 1893.0 44.2
Subtotal 10,949 2384.1 21.8 2751.0 25.1 5135.1 46.9 5813.9 53.1
Meghalaya 2394 185.2 7.7 84.0 3.5 269.2 11.2 2124.8 88.8
Tripura 15 15 100.0 0.0 0.0 15.0 100.0 0.0 0.0
Manipur 1784 105 5.9 0.0 0.0 105.0 5.9 1679.0 94.1
Assam 680 375 55.1 0.0 0.0 375.0 55.1 305.0 44.9
Nagaland 1574 99 6.3 0.0 0.0 99.0 6.3 1475.0 93.7
Arunachal 50,328 423.5 0.8 2600.0 5.2 3023.5 6.0 47304.5 94.0
Mizoram 2196 0 0.0 - 0.0 0.0 0.0 2196.0 100.0
Subtotal 58,971 1202.7 2.0 2,684.0 4.6 3886.7 6.6 55084.3 93.4
All India 148,701 31239.5 21.0 14535.0 9.8 45774.5 30.8 103,849 69.8
Source: CEA (2007).
ENERGY SOURCES, PART B: ECONOMICS, PLANNING, AND POLICY 379
the hydropower development started way back in 1912 with the commissioning of first power
plant at Chabba near Shimla to meet the power requirement of Shimla town which was then the
summer capital of British India (Bansal, 2005). In the beginning, the development of power
sector was with the Public Works Department of Government of Himachal Pradesh. Later on,
this branch was named as Department of Multi-Purpose Projects and Power (MPPP) in order to
plan activities of power generation, transmission, distribution, and power potential investigation.
After reorganization of the state in 1966 and with the grant of statehood in the year 1971,
Electricity Board was created on September 1, 1971. This board was restructured and given more
power and responsibility on April 1, 1972, and was named as Himachal Pradesh State Electricity
Board (HPSEB) (Bansal, 2006). It had only threepowerhousesin1948inthestateatUhl
(Jogindernagar), Chabba (Shimla), and Bhuri Singh (Chamba) which in total generate power
about 49.950 MW (Bansal, 2006). With a view to expeditiously harness the power potential, the
state government decided to adopt multi-strategy for its development through private, state,
central, and joint sectors. Now the state sells surplus power especially in summer months (April
to October) to neighboring states. The State has a total identified hydel potential of 20670.12
MW, out of which 6067 MW is harnessed by the various agencies in the state including HPSEB
in the state sector, Central Public Sector Undertakings (CPSUs) like Bhakra Beas Management
Board (BBMB), National Hydropower Corporation (NHPC) in central sector, Satluj Jal Vidut
Nigam Limited (SJVNL) in joint sector, and Independent Power Producers (IPP) in the private
sector. In Himachal Pradesh, the Satluj (9866.55 MW), the Beas (4527.90 MW), the Chenab
(2723.0 MW), the Ravi (2226.75 MW), and the Yamuna (602.52 MW) have total identified
hydropower potential with 20670.12 MW under different stages of development in different
sectors (Figure 1; Table 2). At present, 6370.12 MW hydropower is under operation in the state
and 5744 MW is under planning for commissioning during 11th plan. As much as 7832.5 MW
hydropower generation is planned for commissioning during 12th plan. In addition, 723.40 MW
is also to be harnessed from small size projects with capacity up to 5 MW under HIMURJA.
Hydropower development policies in India
The share of hydropower when compared to other sources has been declining steadily since 1963. It
has declined from 44% in 1970 to 25% in 1998. With a slight improvement, it stands now at 26%
(Singh, 2005). The ideal hydrothermal mix should be in the ratio of 40:60. To increase an efficiency
of the power sector in the country, the Government of India has framed new hydropower policy.
National power policy on the development of hydropower projects
Some of the pragmatic features of the National Power Policy are as under:
●New hydropower projects take initiatives especially in the thrust areas of small hydro
wouldbeencouragedinthecomingyearsforproduction and investment in transmission
●The policy emphasizes the optimum use of information technology (IT) tools in consumer
services, trading of electricity, plugging the transmission and distribution losses, and commer-
cial operations. It also proposes adequate use of solar based technologies for heating water and
rooms during the lean period of water supply in winter.
●Tackling the issues like environmental protection, human resource development, and training
of the employees are also included within the policy. At the same time, protecting the interests
of the consumers and maintaining quality standards have also been emphasized within the new
380 S. SHARMA AND J. C. KUNIYAL
Himachal Pradesh state government policy on hydropower project development
Hydropower policy in Himachal Pradesh was reformulated on January 2, 2007, and it became the
first state in India to frame such policy in the country (GoHP, 2006).
The salient features of power policy are:
●Small hydropower projects up to 2 MW shall be exclusively reserved for the natives of
Himachal state and cooperative societies. Projects with capacity ranging from 5 MW to 100
MW are to be awarded through Memorandum of Understanding (MoU) giving preference to
natives of the state. Projects above 100 MW are to be awarded through competitive bidding
routes, and above 100 MW through equity participation up to 49% on selective basis by the
●The government will constitute Local Area Development Committee (LADC) for projects being
implemented with representative from the government official.
●In order to minimize adverse socioeconomic impacts due to execution of the projects on the local
community, 1.5% of the total capital cost in the Detailed Project Report (DPR) is to be spent on
Rehabilitation and Resettlement (R&R) Scheme and Catchment Area Treatment (CAT).
Figure 1. Location of hydropower projects under different stages of development in Himachal Pradesh.
ENERGY SOURCES, PART B: ECONOMICS, PLANNING, AND POLICY 381
●To maintain ecology and water availability in the downstream of the diversion structures, 15%
water release is mandatory during operation stage. The IPPs shall give an undertaking to the
Fisheries Department of the local area stating that wherever feasible, rearing of fish shall be
promoted in the project area at the time of implementation.
●The project authorities and contractors engaged by them for the project will provide 70%
employment on priority basis to the native people of the state. In case of direct recruitment of
executive positions other things being equal in terms of eligibility criteria, give preference to the
candidates who are well conversant with traditions, customs, culture, language, and dialect of
●Employment should be provided to member of the displaced families or adversely affected
during construction of the project. Engagement in the petty contracts like road work, retaining
walls, building construction, carriage of construction material, running of canteens/mess, and
security personnel through ex-servicemen shall be awarded to the natives.
●Above 50 MW capacity, the project authorities will open Corporate Offices, a police station,
and a labor office within state and for less than 50 MW, the project proponents shall inform
the local police stations and the labor offices about the details of the laborers and other
●The project developers will provide royalty as free power to the government of Himachal
Pradesh in lieu of surrendering potential site @ 12% of the deliverable energy of the project.
This incorporates the first generating unit for a period of 18 years of the project royalty @ 18%
deliverable energy. Thereafter, 30% of the deliverable energy for the balance agreement period
will be applied beyond 30 years. At the end of 40 years, these shall stand transferred free of cost
to the Government of Himachal Pradesh.
●The land, powerhouse building, and switchyard will be based on lease, whose rates will be
approved by the government for the agreement period. The government shall acquire the land
for the permanent structures by invoking the compulsory clause under the Land Acquisition
Act, 1894, in order to expedite the execution of the projects.
●The project proponents through the reputed companies shall carry out the environmental
impact assessment studies for the proposed projects. The places such as watermills and water
and irrigation channels will be debarred to construct hydropower projects. Under this case, the
IPPs may identify sites in upstream/downstream areas.
Table 2. Basin wise hydropower potential (MW) in Himachal Pradesh.
A. Projects under operation
Satluj Beas Yamuna Ravi Chenab Total
State Sector 150.25 226.50 79.95 10.25 0.00 466.95
Central/Joint Sector 2825.00 1496.00 131.57 1038.00 0.00 5490.57
Private Sector 300.00 86.00 0.00 0.00 0.00 386.00
HIMURJA 1.30 21.30 4.00 0.00 0.00 26.60
Total-A 3276.55 1829.80 215.52 1048.25 0.00 6370.12
B. Projects planned for commissioning during 11th plan
State Sector 659.50 206.60 267.00 122.00 0.00 1255.10
Central/Joint Sector 1212.00 1320.00 0.00 231.00 0.00 2763.00
Private Sector 1208.00 374.00 74.00 70.00 0.00 1726.00
Total-B 3079.50 1900.60 341.00 423.00 0.00 5744.10
C. Projects planned for commissioning during 12th and subsequent years
State Sector 0.00 0.00 0.00 0.00 0.00 0.00
Central/Joint Sector 1596.00 750.00 0.00 0.00 0.00 2346.00
Private Sector 1914.50 47.50 46.00 755.50 2723.00 5486.50
Total 3510.50 797.50 46.00 755.50 2723.00 7832.50
HIMURJA SHP (up to 5.00 MW) (Total-harnessed 750 −26.60 = 723.40 MW) 723.40
Grand Total (A + B + C) 9866.55 4527.90 602.52 2226.75 2723.00 20670.12
Source: CEA (2007).
382 S. SHARMA AND J. C. KUNIYAL
●The project proponents will submit a DPR within 18 months for the project up to 50 MW and
24 months above 50 MW. The project proponent will have to deposit a security deposit of
either a sum of Rs. 4 lakh per MW in case the deposit is made in the form of Bank Guarantee
or a sum equivalent to Rs. 2 lakh per MW where the deposit is to be made by cash/bank draft.
In energy sector, hydropower stands as one of the major sources of clean energy which in turn
contributes significantly in growing Indian economy. These projects fulfill the state as well as
national interests and improve living standards of the natives. The Himalayan areas are yet to
exploit their full hydropower potential to meet the ever growing demand of energy. Nowadays,
hydropower is the main source of economy in Himachal Pradesh after horticulture, agriculture, and
tourism sector. This state indeed is rightly termed as “Power Bowl”of India that has progressed
significantly with the development of its hydropower resources. It will also help in fulfilling the
dream of Himachal Pradesh to become as one of the most developed states in the country in the
years to come. For promoting sustainable development, wise use of water resources and increase in
efficiency of the power sector, the national and state governments have framed a new hydropower
policy. This study would therefore be among a pioneering one in a sense to focus on hydropower
potential and development in a state recently declared as “a power state.”The hydropower project
development is, therefore, among such activities that require intensive, cohesive, and holistic
approach to make it fully sustainable in the mountain environment.
The authors are grateful to the Director, G.B. Pant Institute of Himalayan Environment & Development, Kosi-Katarmal,
Almora, Uttarakhand, for providing necessary facilities in Himachal Unit of the Institute to conduct this work.
The authors would also like to thank Dr. Anu Sabhlok, Astt. Professor, IISER, Mohali, Chandigarh, for her valuable
suggestions and inputs in preparing this manuscript.
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