There are around 130 dams in Uttar Pradesh, out of which 15 dams are constructed for hydroelectric power generation, the rest are for agricultural purpose. Madho-I in the district of Pilibhit, Bansagar-I and Meja in Mirzapur and Bandran in Lalitpur four of the major Small Hydro Projects of national importance in Uttar Pradesh. All 15 hydro power stations combined have a capacity of producing 76.2 MegaWatt of electricity as reported in the UP Jal Vidyut Nigam Limited’s website. Some Small Hydro Project Stations such as the Nirgajini which is more than 70 years old, Chittaura, Salawa and Bhola on the Upper Ganga Canal are to be closed down step by step and stations with higher capacity are to be set up near these existing power stations. These new power stations replacing the old ones will be set up by private investors as a part of UGC Expressway Project.

Small Hydroelectric PowerStation is a state subject and the policies for hydroelectric projects in U.P. are constructed for the following categories (i) Private Sector allotment up to 15 MW, the nodal agency is the Non-conventional Energy Development Agency (NEDA) under the UP government (ii) For projects above 15 MW and up to 25 MW, the UP Jal Vidyut Nigam Limited acts as the nodal agency.

Hydraulic capacity

Anything above the 25 MW is understood as national interest and the National Hydroelectric Power Corporation (NHPC) is responsible to float a tender for such projects. Projects such as the Maneri Bhali Phase II (304 MW) and Lakhwar Viyasi (420 MW) are examples of hydroelectric projects which have been taken up and completed as a joint venture project by the NHPC, the national body and the UPJVNL, state counterpart. Power generated from these two projects are fully allocated to the state of UP. The investments by the UP government is treated as the share of the State Government in the hydroelectric Joint Venture. The Bhagirathi basin is also taken up as a joint venture between the NHPC and the UPJVNL.

The nodal agency’s function is to assess bidders and ensure bids for the projects from private entrepreneurs. The nodal agency assesses bidders based on pre-determined attributes only allows qualified bidders to be considered for allotments. The bidder with lowest tariff for 25 years is considered for the allotment of the small hydro power station.

Checks and balances are also placed such as, if the allotted buyer does not take appropriate active steps to implement the project within six months since the date of allotment of project, the allotment is invalidated and considered for re-allotment. The project is then re-allotted to the bidder with the second lowest tariff or the Govt. agencies to implement the project. The Nodal agency i.e. the UPJVNL or the NEDA is required to assist the developer to gain the statutory approvals required for the project.

The total cost of development is borne by the private entrepreneur, including the civil works and the cost of the land. Since the developer is required to sell power to Uttar Pradesh Power Corporation Limited (UPPCL), half the transmission cost is borne by the entrepreneur and the UPPCL.

There are various incentives for the private entrepreneur as the power generated from such small hydro power plant is exempted from electricity duty. Even though private developers to be responsible for laying lines for connectivity to the nearest grid, they are not required to obtain Govt. permission for the right of way for construction of transmission line to the nearest grid. However the entrepreneur is responsible for buying private land in advance and pay adequate compensation to the owner for use of private land. In case of laying of underground cables, the developer is not required to pay any compensation to the private owner under certain conditions such as the that the land is to be filled with earth and properly levelled post laying cables. For land belonging to State or local bodies, no payment is required for the construction of transmission lines.

One of the most pressing issues in this governmental policy is the land acquisition for these projects. The land acquisition policy in this regard prescribes that state government acquire the land from individuals and transfers them to the developer. This adds a bit of a thorn to the rosy policy as government compensation packages are usually inadequate or delivered late or improperly given out.

The policy also does not talk of the loss of ecology or the disturbance of the existing biodiversity or how such disturbances could be recompensed. The policy follows a very direct approach to incentivize entrepreneurs with tax remittances but does not some of the indirect repercussions such as compensation for the land or clarity in the process of shortlisting private developers for the tender.