Importance of energy needs of any developing country like India are well recognized. But after the initial thrust to construction of storage dams to generate hydro projects a few decades ago, the enthusiasm has given way to virtual inertia and only 40,000 MW of hydro power capacity has been installed in the last 65 years, which is just 27% of the identified hydro power potential in the country. National Hydro Power Corporation (NHPC), a state owned outfit, has been able to achieve installation of just 5700 MW of capacity  in the last about 4 decades despite financial and technical support from the Government.  Though 97% of the installed capacity is in the Public Sector, yet the achievements of the Government sector in the recent years leave much to be desired.

While the legal framework for forging a fruitful Public Private Partnership (PPP) in developing hydro power was offered by the Electricity Act of 2003, efforts by the Union and State Government in this direction still remain half-hearted. A proper road-map to benefit from the synergy of Public and Private sectors to exploit the untapped hydro potential is yet to be prepared. Issues like undue delays in clearances, land acquisition, financial closure and local resistance still dog the private sector investors in hydro-power sector.

In a country which is house to one fifth of the global population, not well endowed with fossil fuels and finds energy needs grow rapidly, conscious efforts are required to channelize the synergy between the vibrant private sector and experienced Government sector.

The existing power policies of various State Governments need to be more investor friendly. Existing basis of bidding i.e. offering more upfront premium or more free power to Government, hit the viability of the hydro projects hard, resulting in higher cost of construction and resultant higher tariffs. The synergy of both the sectors can be achieved with a well-defined concession agreement and pragmatic basis for bidding.

Need therefore, is to adopt a well defined, investor friendly PPP Model by legislating a federal law, enabling fruitful partnerships between the public and private sectors. In addition to assisting the private investors in obtaining timely clearances, the Government could also facilitate timely project loans through the state owned Financial Institutions, and share some of the risks during project execution.

Synergy between the public and private sector in exploiting hydro power potential would complement and supplement the two partners.  While the projects of national importance as well as those involving inter-state and international territories can be handled by the Government owned companies, other projects can be allocated in PPP mode. Government’s partnership would make sure that pre-construction blues, in which the privately owned projects usually get swamped, are reduced to the minimum. Inherent lethargy and inefficiencies of public sector, on the other hand, would be replaced by the efficient private management facilitated by professionalism, quick decision making and constant monitoring.

Hydro Power offers a viable option for generating clean and renewable energy. Quicker exploitation of its potential with PPP mode would go a long way in replacing the need to set up more thermal power plants. It is well known that though the initial cost of hydro is a bit higher, its generation cost is significantly lower than that of thermal plants, as inputs like coal or gas are not required for generation. For a country like India, so heavily dependent on import of oil and other fossil fuels, hydro-power offers an opportunity for substitution of coal imports, thereby reducing the stress on precious foreign exchange to that extent. Expeditious execution of Hydro Power Projects would also assist in reducing the volume of harmful carbon emissions into the environment.

So let the country benefit from more availability of cleaner energy through the synergy of partnership between the Government and corporate sectors. Earlier, the better.