Himalayan Small Hydropower Summit

(October 12-13, 2006), Dehradun

DEVELOPMENT OF SMALL HYDRO

G. Baidya,
Chief Engineer (CDM R&D), NHPC
Faridabad
INTRODUCTION
Small hydro is a renewable and pollution free source of power generation. Due to short
gestation period and almost negligible impact on environment, small hydro power is attracting
world-wide attention. Further there is an urgent need to shift to renewable energy projects for
energy security of a country; it is given much more importance not only in developing
countries but in developed countries also.
Of all the non-conventional renewable energy sources, Small Hydro represents highest
density resource and stands in the first place in generation of electricity from such sources
throughout the world. Global installed capacity of Small hydro is around 50,000 MW against
the estimated potential of 180,000MW.
Small hydro power is one of the earliest known renewable energy sources, in existence in
India since the beginning of the 20th century. In fact much before that, the technology was
used in Himalayan villages in the form of waterwheels to provide motive power to run
devices like grinders. References to mechanical energy extraction have been found from as
early as twelfth century. SHP (small hydro power) technology was introduced in India shortly
after the commissioning of the world's first hydroelectric installation at Appleton, USA in
1882. The 130 kW plant at Darjeeling in the year 1897 was the first shp installation in the
country. A few other power houses belonging to that period such as Shivasundaram in Mysore
(2 mw, 1902), Galgoi in Mussoorie (3 MW, 1907), and Chaba (1.75 MW, 1914) and Jubbal
(50 KW, 1930) near Shimla are reported to be still functioning properly. However the country
switched on early to larger hydro and pursued the same reaching an installed capacity of
30,935 MW with only 1705 MW of Small hydro.
WHAT IS SMALL HYDRO?
There is no international consensus on the definition of small hydropower. The general
tendency all over the world to define Small Hydro by Power output. Different countries are
following different norms keeping the upper limit ranging from 5 to 50 MW.

A Layout of Small hydroelectric project

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International definition of Small Hydro.

UK (NFFO)
UNIDO
Sweden
Colombia
Australia
India
China
United States
Brazil
Philippines
New Zealand

< 5 MW
<10 MW
< 15 MW
< 20 MW
< 20 MW
< 25 MW
< 25 MW
<30 MW
< 30 MW
< 50 MW
< 50 MW

In India, Small Hydro schemes are further classified by the Central Electricity authority
(CEA) as follows:
Classification of Micro, Mini, & Small Hydro Schemes in India.
Type
Micro
Mini
Small

Station Capacity
Upto 100 KW
101 KW to 2000 KW
2001 KW to 25000 KW

SMALL HYDRO IN CHINA:

China has abundant small hydro power (SHP) resources,
which are economically feasible for development. The
exploitable potential amounts to 100 GW and this is
distributed throughout more than 1500 of the nearly 2300
counties in the country. After several years of
development, by the end of 2002, China had established
652 primary Rural Electrification Counties.
The current status of SHP in China:
The total number of Small Hydro stations operating in the
country was 43,027, with an aggregate installed capacity
of 26,262 MW - accounting for over a quarter of the total
potential that could be developed. The annual output has
reached 87.1 GWh. Table 1 shows the list of provinces in
China that have over 300 MW of installed SHP capacity

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Unit rating
Upto 100 KW
101 KW to 1000 KW
1001 KW to 5000 KW

TABLE 1. SHP development in some provinces

Province

Number of
stations

Installed capacity
(MW)

Annual output
(GWh)

Proportion of total installed SHP

capacity in China (%)

Guangdong

6,525

3,576

11,928

13.6

Sichuan

4,395

3,529

13,933

13.4

Fujian

5,096

3,057

11,540

11.6

Yunnan

1,904

2,250

9,614

8.6

Hunan

4,615

2,033

7,198

7.7

Zhejiang

2,738

1,873

4,693

7.1

Hubei

2,292

1,466

3,670

5.6

Guangxi

2,547

1,407

5,061

5.4

Jiangxi

3,965

1,180

3,301

4.5

Guizhou

1,154

958

3,657

3.6

Chongqing

1,061

839

2,851

3.2

Xinjiang

525

662

2,114

2.5

Shaanxi

2,158

453

1,037

1.7

Gansu

467

363

1,299

1.4

Henan

735

318

552

1.2

Hebei

195

317

304

1.2

How and why Chinese SHP development has been so fast

From the brief profile of SHP development in china outlined above, one can identify several
reasons why SHP has developed so fast in China. In particular, the following reasons stand
out:

View of Fuchunjiang SHP Station's dam in Chun'an County, Zhejiang Province

36

Decentralized development and management mechanism focusing on local stake holder.

Unlike the centralized development model in other developing countries, or commercially
oriented development in some industrialized countries, most SHP development in China is
focused on decentralized management. SHP development strategies, objectives, standards and
policies are decided by the central government, while planning, construction, design,
operation, management, and so on are undertaken by the local governments. This
decentralized management mechanism results in the complementary coexistence of national
grid development, local grid development and isolated SHP stations.
Policy stimulates development
For a long time, the Chinese government has made a series of preferential policies, to support
and encourage local governments and local people to develop their nearby, rich small hydro
power resources. 'Self-construction, self-management, and self-consumption' has been a well
known policy, guiding SHP development in China since the early 1960s. This determines that
local authorities or local people who invest in and construct the SHP stations have the right to
manage the stations, and to utilize the electricity thus generated. In addition, 'selfconsumption' also implies that there should be an SHP market - that is, SHP stations should
have their own distribution/supply area, instead of selling all the energy to the national grid
for distribution. As for taxation policy, value added tax on electricity generated by SHP
systems has since 1994 stood at 6% - much more favorable than the 17% tax for large hydro
power stations.
Funding sources
Joint investment:
Joint investment, whether undertaken by individuals or community or private enterprise, is
mostly encouraged with investment from outside, including overseas markets. Under the
policy of 'who invests, will own [the project], and receive benefits', anyone is welcome to
invest. As a result of this, there are several different types of ownership for SHP enterprises.
The position at the end of 2001 is presented in Table 5.
TABLE 5. Ownership of SHP enterprises, by investment
Type
Quantity
Percentage
(%)

Stateowned

Community- Individual
based

4,483

13,175

1,113

19.7

58.0

4.9

Share- Other
holding

Total

2,256 1,694 22,721

9.9

7.5

100.0

Loans and grants

Moreover, the developer can get financial support from different levels of government and
from banks, in the form of different soft loans and grants. For example, the central
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government gives grants of RMB 300 million (US$36 million) to the 400 Rural
Electrification Counties annually, and the soft loans account for 38% of the total investment
for this. This offers local developers different sources for funds, as Table 6 shows.
TABLE 6. Investment sources for SHP station construction
Sourcesa
National input (RMB
million)
Percentage (%)

State
inputb

Bank's
loan

Foreign
investment

Local Others
input

3,017

11,093

236

4,975

14.1

52.0

1.1

23.3

Total

2,035 21,356
9.5

100.0

The investment sources are the composition of the construction fund for the project owner
State input comprises state investment, Special Hydro Power Infrastructure Fund, and
Agriculture & Water Allowance

Close relationship with rural electrification programme

Electricity availability plays a more and more important role, a role which it was essential to
develop for the rural areas. However, in a vast country like China, economic development and
resources are unevenly distributed, making it unrealistic to realize rural electrification by
relying solely on State support or by depending on the national grid. So in 1982, China's State
Council decided to establish 100 counties with rich hydro resources as 'Rural Electrification
Counties', on a trial basis. Through this measure, it became clear that SHP should provide the
basis for rural electrification. This significant strategy paved the way for large-scale SHP
construction, uncommon elsewhere in the world. Within 15 years, 653 Rural Electrification
Counties across China has been established; another 400 more counties are expected to be
electrified through SHP before the end of 2005.
Emphasis on cost-effective SHP technology
The rapid development of SHP in rural areas also resulted from the emphasis on cost-effective
application of an appropriate technology, which is in line with rural economic development.
This involved the standardization of a series of technical criteria for planning, design,
construction, installation, testing and acceptance, operation etc., to ensure quality, improve
efficiency, and help popularize new technology and innovative products. Progress has
included the rolling concrete arch dam, the plate rock-filling dam, automatic control systems,
optimum operation and trans-basin hydro power development, efficient runners and simplified
turbine operators. The application of these not only saves money but also shortens the
construction period and increases the power reliability.
Local grid development and SHP own supply area
Unlike other developing countries, China has always been focusing on developing SHP's own
supply area, where an integrated power generation, supply and distribution system has been
established in those areas with rich hydro resources. The local grid can be interconnected to
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the national grid at a certain point to make full use of the seasonal power and to get more
benefits.

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SMALL HYDRO IN INDIA

India has a century old history of Hydro
Power and it is important to note that the
beginning was from Small Hydro. The
first Small hydro project of 130 KW
commissioned in the hills of Darjeeling
in 1897 marked the development of
Hydro
power
in
India.
The
Sivasamudram project of 4500 KW was
the next to come up in Mysore district of
Karnataka on river Cauvery in 1902, for
supply of power to the Kolar Gold
Mines at 25 Hz.

Sidrapong Small Hydro Power Station

India has an estimated small hydro potential of about 15,000 MW. Out of this total potential
of small hydro identified so far, is 10,265 MW through 4278 sites. As on 31.03.2005, 523
small hydro projects (up to 25 MW) with an aggregate capacity of 1705 MW have been
installed. Besides these, 205 projects with total capacity of nearly 480 MW are under
construction. State wise identified small hydro projects are given in table-1.
Target capacity addition
Tenth plan (2002-07)

: 600 MW

Eleventh plan (2007-12)

: 2000 MW

Table-1
State wise identified Small Hydro Projects in India (Up to 25 MW Capacity)
Sl no.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16

State
Andhra Pradesh
Arunachal Pradesh
Assam
Bihar
Chhattisgarh
Goa
Gujarat
Haryana
Himachal Pradesh
Jammu & Kashmir
Jharkhand
Karnataka
Kerala
Madhya Pradesh
Maharashtra
Manipur

Total
No.
377
452
40
74
47
4
287
23
288
208
89
221
207
85
221
99
40

Capacity (MW)
250.50
243.47
119.54
149.35
57.90
4.60
186.37
36.55
418.68
294.43
170.05
534.76
455.53
336.33
484.50
91.75

17
18
19
20
21
22
23
24
25
26
27
28
29

Meghalaya
Mizoram
Nagaland
Orissa
Punjab
Rajasthan
Sikkim
Tamil Nadu
Tripura
UT( A&N Islands)
Uttar Pradesh
Uttaranchal
West Bengal
Total

90
53
84
206
122
55
70
155
10
5
211
354
141
4278

197.32
135.93
149.31
217.99
124.22
27.82
214.33
373.46
30.85
1.15
267.06
1478.24
213.52
10,265.45

Advantages of Small Hydro

1. It is benign source of power generation, harnessing only gravitational potential of
water to make it yield energy in a continuum.
2. Proven technology available in the country with very high prime moving and
generation efficiencies for their development. These are least dependent on imports as
indigenous technology is available. Setting up small hydro does not require any
special geological contribution/ ground conditions.
3. Short gestation period.
4. SHPs are environmentally friendlier than conventional hydro plants.
i)
Non-involvement of setting up of large dams and thus not associated with
problems of deforestation, submergence or rehabilitation.
ii)
Non- polluting & environmentally benign. It is one of the least CO2
emission responsible power sources, even by considering full energy chain
right from the impact of production of plant equipment etc.
iii)
Least impact on Flora and fauna (aquatic and terrestrial) and bio-diversity.
5. It serves to enhance economic development and living standards especially in remote
areas with limited or no electricity at all.
6. It can be tapped wherever water flows along small streams, medium to small rivers,
irrigation dam-toe/ canal drop sites etc.
7. Low investment is required which can easily be affordable by private entrepreneurs.
These projects also suit to private entrepreneur due to short gestation period, quicker
returns and cheapest operating costs due to low overheads.
8. It facilitates rural mass who have been able to manage to switchover from firewood
for cooking to electricity and thereby checking to deforestation.
9. Small hydro is significant for off-grid, rural, remote area applications in far flung
isolated communities having no chances of grid extension for years to come. Small
Hydro is operationally flexible, suitable for peaking support to the local grid as well as
for stand alone applications in isolated remote areas.
10. With the development of small hydro, rural communities have been able to attract new
industries, mostly related to agriculture owing to their ability to draw power from SHP
stations and ultimately resulting in the development in the area.
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11. Small hydro does not require much expertise to build and operate. Components of
small hydro projects are so simple and fairly visible at site distinctively that they can
become centre of education.
12. Capital investment is less in compared to others scheme such as thermal as well as big
hydro.
13. On the basis of project life cycle cost in real terms, inflation- free small hydro
becomes several times cheaper than thermal option due to cheaper operational cost
and zero cost input.
14. Under Kyoto Protocol, the Small Hydro Project can earn extra revenue through Clean
Development Mechanism (CDM).
IMPEDIMENTS OF SMALL HYDRO
Despite the fact that various incentives are available from IREDA, UN and MNES for
development of the small hydro power schemes, the momentum for their development is less
due to following reasons:
Low load factor and revenues:
Majority of small hydro projects are located in remote places and not connected with the grid
and in general stand alone power stations. Therefore, transmission of the surplus power to
other places is not possible. Accordingly, they can fulfill the need of local area only. Incase,
the demand is less, then the power station will continue to run at the reduced load i.e at low
load factor and thereby loss in power generation which in turn result in poor revenue
collection.
Operation and Maintenance Cost:
Inaccessibility of the small hydro plants due to poor transport and communication, the
adequate support of operation and maintenance for this power station is not available. Another
factor due to which operation & maintenance is very high is that design of such power
stations is based on inadequate hydrological and geological data which lead to frequent
damages to the structures.
Insufficient management for the operation:
Due to remoteness, the technical and management skill of local is not sufficient for operation
of the power plants. Therefore, lot of training is to be provided to the managerial and
operational staff.
Inadequate Quality and performance:
The quality of small power stations is not as good as of bigger power stations as these power
plants are generally designed on the basis of short term raw data. Thus the ground conditions
of operation are much different from the conditions taken for design. Due to such differences
the quality and performance of equipment becomes a constraint.
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The tariff:
The methodology adopted for tariff in case of small hydro is the same as in Mega Hydro,
which is not reasonable.
Low interest of Private Developers:
Private developers avoid to have a stake in small hydro because they are firstly afraid whether
they will be able to generate electricity commensurate with the predicted Hydrology. And
secondly, once commissioned there is no surety of a buyer at a rate that is comparable to the
outcome of the investment he has put.
Statutory clearances:
Various clearances like forest clearances, defense clearances, environmental clearances; land
acquisition etc. given by different ministries takes one to two years time. A single window
statutory clearance should be provided or State Govt. should get these clearances beforehand
and then only entrusted these projects for execution.
Transmission lines:
The major impediment to majority of SHP stations is non-availability of high voltage
transmission lines resulting in heavy line losses wherever the load centers were spaced far
apart.
Financing Small Hydro:
IREDA (Indian renewable Energy Development Agency), World Bank, Asian Development
Bank and Japan Bank for international cooperation etc. finance small hydro projects. Govt.
encourages private sectors for their participation in development of small hydro power.
CONCLUSION
For a power starved country like India, it is important that all the sources of power be tapped
optimally and viably. Small hydro, being a very good source of renewable energy and India is
having vast potential of Small hydro i.e. 15,000 MW, its development must be given due
importance. This in turn help in capacity addition to the hydro power generation and shortage
of electricity can be avoided to some extent. MNES is launching a programme for
electrification of remote and inaccessible village through Small Hydro Power projects. This
will improve the living condition as well as economic condition of the people in the areas and
overall development of the country.

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