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Hydropower or water power is power derived from the energy of falling water or fast running water, which may be harnessed for useful purposes. Since ancient times, hydropower from many kinds of watermills has been used as a renewable energy source for irrigation and the operation of various mechanical devices, such as gristmills, sawmills, textile mills, trip hammers, dock cranes, domestic lifts, and ore mills. A trompe, which produces compressed air from falling water, is sometimes used to power other machinery at a distance.

A hydroelectric power plant typically consists of a high dam that is built across a large river to create a reservoir, and a station where the process of energy conversion to electricity takes place. The first step in the generation of energy in a hydropower plant is the collection of run-off of seasonal rain and snow in lakes, streams and rivers, during the hydrological cycle. The run-off flows to dams downstream. The water falls through a dam, into the hydropower plant and turns a large wheel called a turbine. The turbine converts the energy of falling water into mechanical energy to drive the generator After this process has taken place electricity is transferred to the communities through transmission lines and the water is released back into the lakes, streams or rivers. This is entirely not harmful, because no pollutants are added to the water while it flows through the hydropower plant.

Hydropower types

Hydropower is used primarily to generate electricity. Broad categories include:

Conventional hydroelectric, referring to hydroelectric dams.

Run-of-the-river hydroelectricity, which captures the kinetic energy in rivers or streams, without a large reservoir and sometimes without the use of dams.

Small hydro projects are 10 megawatts or less and often have no artificial reservoirs.

Micro hydro projects provide a few kilowatts to a few hundred kilowatts to isolated homes, villages, or small industries.

Conduit hydroelectricity projects utilize water which has already been diverted for use elsewhere; in a municipal water system, for example.

Pumped-storage hydroelectricity stores water pumped uphill into reservoirs during periods of low demand to be released for generation when demand is high or system generation is low.


As with other forms of economic activity, hydropower projects can have both a positive and a negative environmental and social impact, because the construction of a dam and power plant, along with the impounding of a reservoir, creates certain social and physical changes.  A number of tools have been developed to assist projects.

Most new hydropower project must undergo an Environmental and Social Impact Assessment. This provides a base line understand of the pre project conditions, estimates potential impacts and puts in place management plans to avoid, mitigate, or compensate for impacts.

The Hydropower Sustainability Assessment Protocol is another tool which can be used to promote and guide more sustainable hydropower projects. It is a methodology used to audit the performance of a hydropower project across more than twenty environmental, social, technical and economic topics. A Protocol assessment provides a rapid sustainability health check. It does not replace an environmental and social impact assessment (ESIA), which takes place over a much longer period of time, usually as a mandatory regulatory requirement.

The World Commission on Dams final report describes a framework for planning water and energy projects that is intended to protect dam-affected people and the environment, and ensure that the benefits from dams are more equitably distributed.

IFC's Environmental and Social Performance Standards define IFC clients' responsibilities for managing their environmental and social risks.

The World Bank’s safeguard policies are used by the Bank to help identify, avoid, and minimize harms to people and the environment caused by investment projects.

The Equator Principles is a risk management framework, adopted by financial institutions, for determining, assessing and managing environmental and social risk in projects.

Reservoirs accumulate plant material, which then decomposes, emitting methane in uneven bursts.

The Indian Scenario

India is the world's 7th largest producer of hydroelectric power and is also ranked 3rd worldwide by its total number of dams. The Tehri Dam, a 260.5 meter (855 ft) high, rock and earth-fill embankment dam is currently the tallest of India's approximately 4,710 finished dams.

As of 31 March 2016, India's installed utility-scale hydroelectric capacity was 42,783 MW, or 14.35% of its total utility power generation capacity. Additional smaller hydroelectric power units with a cumulative capacity of 4,274 MW have been installed. India's hydroelectric power potential is estimated at 84,000 MW at 60% load factor, which is one of the largest in the world. In 2014 and 2015 the total amount of hydroelectric power generated in India was 129 TWh (129,000,000 megawatt hours).

The hydro-electric power plants at Darjeeling and Shivanasamudram were established in 1898 and 1902, respectively. They were among the first in Asia and India has been a dominant player in global hydroelectric power development. India also imports surplus hydroelectric power from Bhutan.

Hydroelectric potential

India's economically exploitable and viable hydroelectric potential is estimated to be 148,701 MW.  An additional 6,780 MW from smaller hydro schemes (with capacities of less than 25 MW) is estimated as exploitable.  56 sites for pumped storage schemes with an aggregate installed capacity of 94,000 MW have also been identified. In central India the hydroelectric power potential from the Godavari, Mahanadi, Nagavali, Vamsadhara and Narmada river basins has not been developed on a major scale due to potential opposition from the tribal population.

The public sector accounts for 92.5% of India's hydroelectric power production. The National Hydroelectric Power Corporation (NHPC), Northeast Electric Power Company (NEEPCO), Satluj Jal Vidyut Nigam (SJVNL), THDC, and NTPC-Hydro are some of the public sector companies producing hydroelectric power in India. The private sector is also expected to grow with the development of hydroelectric energy in the Himalayan mountain ranges and in the northeast of India. Indian companies have also constructed hydropower projects in Bhutan, Nepal, Afghanistan, and other countries.

Bhakra Beas Management Board (BBMB), a state-owned enterprise in north India, has an installed capacity of 2.9 GW. The generation cost after four decades of operation is about 27 paise (0.40¢ US) per kWh. BBMB is a major source of peaking power and black start capability to the northern grid in India and it's large reservoirs provide wide operational flexibility. BBMB reservoirs also supply water for the irrigation of 12.5 million acres (51,000 km2; 19,500 sq mi) of agricultural land in partner states, enabling the green revolution in the northern India.

India has gone from an electricity deficit state to an electricity surplus state by making use of pumped storage schemes which store surplus power to meet peak load demands. The pumped storage schemes also capture secondary, seasonal power at no additional cost when rivers are flooded with excess water. India has already established nearly 6,800 MW pumped storage capacity with the installation of hydro power plants.

Pumped storage units can also be used as pumping stations to supply river water for upland irrigation, industrial needs and drinking water. In a tropical country like India, abundant water for agriculture is needed due to a very high annual evaporation rate. The amount of water necessary to meet this demand can be harnessed from India's rivers via pumped storage units.  Food security in India is improved with water security, which in turn is possible from the energy security needed to supply the power for the pumped storage schemes.

More and more solar power generation is becoming available due to lowering cost and its advantage in terms of environmental impact. Solar power may have the capacity to meet daytime energy demands while pumped storage units could meet night-time demands.

Many of the existing hydropower stations on the west-flowing rivers located in the Western Ghats of Kerala and Karnataka are already expanding to include pumped storage units in an effort to solve the water deficit of east-flowing rivers like the Kaveri,the Krishna, etc.

Central Electricity Authority Assessment (CEAA) assessed the economically exploitable hydro power potential in terms of installed capacity as 148,701 MW, out of which 145,320 MW is from schemes having capacity above 25 MW. As on Mar'16, the hydro-electric schemes in operation account for only 31% and thus, the bulk of the potential (69% including the projects that are under development) remains to be developed.

The Government of India has taken many policy initiatives for sustainable hydro-power development. In 2008, the government came out with a Hydro Policy with an objective to achieve the implementation of these projects. The centre and many states have initiated hydro projects through PPP to attract investors for the development of water resources in an environment-friendly manner and to generate revenue while ensuring project viability. Odisha adopted PPP policy in 2007, Arunachal Pradesh (2011), Uttarakhand (2012) and Andhra Pradesh & Gujarat had framed PPP policy. Many projects had been allotted under PPP, however, some of these projects have struggled in the past due to several reasons such as R&R issues, land acquisition problems, clearance and approval procedures, capability of developers, etc. These issues resulted in a declining share of hydropower in India's power mix by almost 32% in the last 50 years. For example, in Arunachal Pradesh, out of 120 MoUs (~40 GW) signed in last dacade, most of the projects are at a standstill. India added 1824 MW of large hydropower capacity in 2015, most of these projects have a troubled track record in one way or the other that include issues like land acquisition, R&R, and cost escalations.

Due to inherent risks associated with the sector, such as geological surprises, natural calamities, environmental & forest issues, and rehabilitation and resettlement issues apart from commercial risks and change of river basin during operation, many developers are averse to enter into the sector. The major commercial deterrents for the private developers are high capital cost and long payback period resulting from high gestation period which inevitably create financing issues. The other issue related to Hydropower projects is  evacuation. Hydro Power projects are capital-intensive and financing them for long such as 20 years is really a challenge. Geographical remoteness also adds to risks since a number of hydropower projects are located in remote sites in states which do not have enough demand for electricity and requires developing transmission infrastructure for evacuation.

About 3100 MW has been commissioned through the private route contributing 7% of the total installed hydropower capacity signifying that there is minimal, participation of the private sector. Private developers seek higher returns vis-a-vis the risks involved in the sector.  Solar Power and Wind Power, where technology risk is minimal pose a serious challenge to the hydropower sector. Solar and Wind power projects with the same capacity as hydropower can be implemented at significantly lower time & resources since solar and wind power projects are comparatively lower capital intensive as compared to hydropower. 

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