CHENNAI: After introducing the repowering, refurbishment and life extension policy for wind projects, the state government has come up with its first ‘Small Hydel Policy 2024’ on Thursday. The policy, for the first time, allows private entities to participate in hydro power generation in the state.
As one of its objectives, the policy aims to attract private sector participation through incentives and supportive policies driving the development of Small hydel infrastructure.
The policy focuses on small hydro projects ranging from 100 KW to 10 MW (Unit size of 5 MW each). The Tamil Nadu Green Energy Corporation (TNGEC) has been designated as the nodal agency for registering, approving, and facilitating the implementation of these projects. However, since the power generated by these projects may affect the resources of distribution companies, prior approval from the respective distribution company is necessary.
According to the policy, developers can set up hydro projects for captive use (self-consumption), third-party sales within the state, or sell power to distribution companies to meet the Renewable Power Purchase Obligation (RPO) set by the Tamil Nadu Electricity Regulatory Commission.
The policy will be effective from the date of notification and will remain in force for five years, after which it will be reviewed. Small hydro projects commissioned during this period will be eligible for benefits and incentives under the policy for 40 years, with a possible 10-year extension.
Developers will also be required to pay an annual fee of `25,000 per MW of installed capacity. A senior official from TNGEC said, “Private players in the western and southern districts, especially in hill areas, have water sources. We can also utilise small waterbodies for this purpose. This policy will promote renewable energy and create job opportunities.”
The policy also aims to help boost local energy production and promote rural electrification with minimal environmental impact.
As part of this, the government plans to set up small hydel units on canals, rivers, and streams while encouraging research and development of innovative technologies. However, developers cannot claim the right to release water for power generation. Additionally, they must provide 10% of the power generated to the state free of cost.
The state is committed to increasing its renewable energy mix from 22% to 50% by 2030 to achieve zero carbon emissions. Currently, Tamil Nadu has hydropower plants with a combined capacity of 2,321.90 MW, and the state aims to increase this by 25%, the official added.