In the face of opposition to big hydropower projects from environmentalists, the Uttarakhand government has notified a new policy that promises to give preference to local communities while setting up micro and mini hydropower projects.
The new policy, notified on January 31, says preference will be given to villages, panchayats or district panchayat units if they submit proposals for establishing and operating hydropower units with a capacity of less than 2MW.
Other local communities like Van Panchayat and Mangal Dal can stake claim for running such projects after clearing formalities, according to the policy.
The government believes micro and mini hydropower projects will transform the state's power sector.
"We are very hopeful with the outcome of the policy. The idea is to empower local communities and promote entrepreneurship," said Surender Kumar, chief minister Harish Rawat’s spokesperson.
According to the policy, the state has the potential to generate 3,000 MW through micro and mini hydropower projects. The policy says state has been able to generate only 170 MW through micro and mini projects.
Uttarakhand Renewable Energy Development Agency (UREDA) has been appointed the nodal agency to formulate projects. Projects of up to 100 kilowatt will come under the definition of micro projects while projects ranging from 100 kilowatt to 2 MW will be classified as mini projects.
Though the policy sounds promising, experts have a different take on it.
Anil Joshi of the NGO Himalayan Environmental Studies and Conservation Organisation (HESCO) believes the major problem for local communities will be generating funds.
It is estimated that Rs 25,000 is needed for every single kilowatt. Therefore a 100 KW project will cost R25 lakh while a 1MW project will cost around R25 crore.
"The policy cannot help the local communities. Here comes the role of the state government. It should rope in financial institutions like the National Bank for Agriculture and Rural Development (NABARD) and other banks to fund the projects," said Joshi.
Harish Pathak, who renovated the 100KW UREDA project in Nainital district, agrees finance is a major issue. He said a project below 1MW is not financially feasible.
"Hydropower projects are a different ball game now. It sounds good that local communities will be promoted. But the micro projects in operation are in a mess and loss-making units," he said.