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Modification of scheme of Budgetary Support for HEP
Context
The Union Cabinet has approved the proposal of the Ministry of Power for modification of the scheme of budgetary support for the cost of Enabling Infrastructure for Hydro Electric Projects (HEP) with a total outlay of Rs.12461 crore. The scheme would be implemented from FY 2024-25 to FY 2031-32.
About the Scheme
- The scheme would be implemented from FY 2024-25 to FY 2031-32.
- It aims to enhance the country’s hydropower capacity, bolstering both energy security and infrastructure in remote areas.
- Scope and Coverage
- The scheme will extend its support to hydropower projects with a cumulative generation capacity of about 31,350 MW, including a significant portion allocated to pumped storage projects (PSPs).
- A total of approximately 15,000 MW capacity in PSPs will be covered under this initiative.
- The scheme is inclusive of all hydropower projects over 25 MW, whether they are publicly or privately managed, provided the allotment process is transparent.
- Under the new scheme, the budgetary support for enabling infrastructure has been revised to better cater to varying project sizes.
- For projects up to 200 MW capacity, the support limit is set at ?1 crore per MW.
- For larger projects exceeding 200 MW, the funding will be ?200 crore plus ?0.75 crore per MW.
- In exceptional cases, where substantial justification is provided, the support can increase up to ?1.5 crore per MW.
- This modification ensures that both smaller and larger projects receive appropriate financial backing based on their scale and requirements.
- The Government has been taking several policy initiatives to address the issues impeding Hydro Power development, viz., remote locations, hilly areas, lack of infrastructure etc.
- To promote the hydro power sector and to make it more viable, the Cabinet in March, 2019, approved measures, namely declaring large hydro power projects as Renewable Energy sources, Hydro Power Purchase Obligations (HPOs), tariff rationalization measures through escalating tariff, budgetary support for flood moderation in storage HEP and budgetary support for the cost of enabling infrastructure, i.e., construction of roads and bridges.
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