Hydel Power Projects Lined Up — But Buyers Are Reluctant
Hydro power isn’t selling on “green” merit alone anymore. Across India’s Eastern Region, a full basket of hydel projects is ready — but state buyers are holding back. The reason? No clarity on tariffs, HPO credits, or who pays the transmission bill.
SJVN’s Hydro Pipeline — Big, Bold, and Waiting
SJVN has come forward with an impressive lineup — from Luhri Stage-I and Sunni Dam within India to cross-border projects like Arun-III, Upper Karnali, and Lower Arun in Nepal.
But most Eastern Region (ER) states haven’t even responded. The Eastern Regional Power Committee (ERPC) records say it clearly: “ERPC is yet to receive any response from the states.” Only Damodar Valley Corporation (DVC) replied — and it’s already signed power purchase agreements (PPAs).
Why the Silence?
The states aren’t against hydro — they just can’t price it.
West Bengal immediately asked the key question: What’s the tentative tariff as per latest cost? SJVN said it wasn’t ready to share that yet.
Without a price tag, no DISCOM wants to take a 25-year commitment on a project whose Detailed Project Report (DPR) is already 3+ years old.
Old DPRs, New Realities
Hydro projects evolve — costs of land, tunneling, and environmental clearance shift over time. States know this. So when they see a “take power” offer without updated tariff data, they expect only one thing: expensive, front-loaded power.
That’s hard to justify when their portfolio already includes cheaper renewable energy and power exchange buys.
The HPO Puzzle
The Hydro Power Obligation (HPO) question adds another layer. WBSEDCL asked: If we buy from Nepal projects like Arun-III, will it count toward HPO?
SJVN referred to a 17 Nov 2023 Ministry of Power letter, which said cross-border hydro may be allowed for HPO on a “case-to-case” basis. That “may” has made everyone cautious. States don’t want to buy expensive imported hydro if it doesn’t count toward their renewable targets.
Transmission — The Silent Cost
Even if tariffs seem fair, transmission and wheeling costs remain uncertain — especially for cross-border projects or distant states.
Everyone wants landed cost clarity, not just ex-bus pricing. Until ERPC or the Ministry of Power clarifies who pays for what, finance departments won’t sign off.
DVC: The Lone Mover
DVC is the only one that’s gone ahead. It’s signed PPAs for:
210 MW from Luhri Stage-I
115 MW from Sunni Dam
200 MW from Arun-III
Why? Because DVC got clear project names, power quantum, and prices — the three things other states still lack.
Timing Mismatch
SJVN wants quick offtake commitments as its projects reach the investment stage. But state DISCOMs are in a different cycle — shifting toward renewables, market power, and short-term thermal purchases.
With exchange prices often below ₹4/kWh, locking into long-term, high-capex hydro is politically risky. So, instead of saying “no,” they simply don’t respond.
ERPC’s Advisory: Go Slow, Get Clarity
ERPC sided with the states’ caution. It told SJVN to:
Share project-wise tentative tariffs
Get Ministry of Power confirmation on HPO treatment for Nepal hydro
Re-approach states after these details are clear
This protects states from signing uncertain, high-tariff deals — even if it delays SJVN’s plans.
The New Reality of Hydro
Hydro is no longer sold on its green virtue alone. It must now pass through three key filters:
Tariff clarity
HPO eligibility
Landed cost certainty
SJVN has projects ready. The states want numbers. Until MoP certifies Nepal hydro for HPO and SJVN updates its tariffs, Eastern buyers will continue to wait — and watch.
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