Moneycontrol
Mar 21, 2017 08:17 AM IST | Source: Moneycontrol.com

Hydro park for developers, purchase obligation may form part of govt’s hydel policy

The hydel policy is likely to introduce the concept of hydro parks where different developers could be invited to set up their projects in a certain area against tax and other incentives,” the official said.

Hydro park for developers, purchase obligation may form part of govt’s hydel policy

Dhirendra Tripathi

Moneycontrol News

Hydro parks and purchase obligation on the part of states are among the many incentives that could form a part of the soon-to-be-announced hydro-electric policy, according to an official familiar with the development.

“Much like special economic zones, the hydel policy is likely to introduce the concept of hydro parks where different developers could be invited to set up their projects in a certain area against tax and other incentives,” the official said.

So far, hydel projects of up to 25 MW were considered under renewable category and thus only such units attracted tax and other benefits. Hydel projects of over 25 MW were considered as conventional units and thus failed to get many of the benefits that units of up to 25 MW managed to get.

Under the new policy, likely to be announced in April, all hydel projects will be treated at par and thus get the same benefits that currently only go to units of up to 25 MW. The new policy is likely to provide viability gap funding to hydel projects besides offering developers the facility of a single-window clearance for their proposed projects. Another significant clause that the new policy could have is a hydro purchase obligation or HPO — on the lines of renewable purchase obligation or RPO.

As per the law, utilities are required to buy a certain part of their total power demand from plants running on renewable energy sources. Each state — power being a state subject — has its own minimum threshold that it imposes on utilities for adhering to RPO including a separate RPO for solar.
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