Mains Paper 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, Railways etc.
From UPSC perspective, the following things are important:
Prelims level: Read the attached story
Mains level: Move towards India’s NDCs for clean energy
- The Union Cabinet has approved a new hydroelectric policy aimed at boosting the sector, including according large hydro projects the status of renewable energy projects.
New Hydroelectric Policy
- According to the new policy, large hydro projects will also be designated as renewable energy projects.
- So far, only smaller projects of less than 25 MW in capacity were categorised as renewable energy.
- The tag allows these to qualify as part of the framework for non-solar Renewable Purchase Obligation (RPO) of the states.
- Under this, power purchasers will have to source a portion of electricity from large hydro projects.
Why such move?
- Development of hydro power projects is important to provide India a stable grid, given the country’s commitment towards 160 GW capacity additions from infirm sources of power like solar and wind by 2022.
- The new measures give developers the flexibility to determine tariff by backloading it after increasing the project life to 40 years, increasing the debt repayment period to 18 years and introducing an escalating tariff of 2 per cent.
- This will help bring down the initial tariff of hydro power projects, which is normally on the higher side on account of including flood moderation and enabling infrastructure costs in the project cost.