Himachal Pradesh, which has a potential to generate 20,416 MW hydroelectric power, has decided to set up 50 new micro hydel projects with the help of small players.
"The government has identified 50 mini hydroelectric projects across the state ranging up to 5 MW. These will be allotted to small players," State Energy Development Agency chief executive Ajay Bhandari told IANS in Shimla on Saturday.
The projects up to 2 MW would be allotted only to the residents of Himachal Pradesh.
Under the state's amended power policy, it will get free power from all the allotted projects.
The fixed quota for projects up to 5 MW is 6 percent free power for the first 12 years, 15 percent for up to 30 years, and 24 percent for up to 40 years. After 40 years, the project will be handed over to the government.
To encourage small entrepreneurs, the government is not charging any upfront premium for these projects.
However, for the projects above 5 MW, the fixed upfront premium is Rs.2 million per MW, which is in addition to free power bidding.
The average cost of a project is Rs.70 million per MW.
Himachal Pradesh has abundant water resources, with five major rivers flowing down the slopes of the Himalayas. Its power generation potential is 20,416 MW, about 25 percent of India's total hydropower potential. Of these, only 6,419 MW has been developed.
Eleven projects with a combined generation capacity of 1,124 MW are under execution by the Himachal Pradesh State Electricity Board, whereas 15 projects with a generation capacity of 1,738 MW are under execution by private companies.
Himachal Pradesh had generated 6,229 million units of power in 2007-08, out of which 5,029 million units were sold outside the state.