The power ministry has proposed excluding the costs of building infrastructure such as roads and bridges from tariffs to make new hydropower projects viable, the people said asking not to be named as the discussions are not public yet. Those costs might be borne by the federal government and the states where the projects are located, the people said, adding that the details haven’t been finalized.
Power ministry spokesman Rajesh Malhotra declined to comment. Nearly 100 gigawatts of electricity potential in India’s rivers is lying untapped because of high tariffs. Hydropower projects, often located in remote regions, are crucial to stabilize the grid as India looks to add 175 gigawatts of renewable capacity. These plants can be swiftly turned on and off, helping the grid withstand fluctuations caused by intermittent supplies from solar and wind.
“The cost of building roads and bridges to ferry construction equipment can be quite large, because most of the projects are located in hills,” said K.M. Singh, who in July retired as the chairman of NHPC Ltd., India’s largest hydro-power producer. “They have a high utility value for states where the projects are located and they should consider bearing these costs.”