In what should give hydel companies some respite, the task force on hydropower development, constituted by the Ministry of Power (MoP), has recommended that the cost-plus tariff regime be extended for the sector for another five years, till January 2016. As per the National Tariff Policy, 2006, competitive bidding was supposed to replace the existing MoU regimen by January 2011, unless the apex regulatory authority deems the country not ready for such a transition.- While forwarding its recommendation, the task force has cited the high risks and uncertainties inherent to hydropower projects. Given their location in hilly areas, sites for HEPs suffer from adverse geological conditions and natural calamities.8Further, most hydel sites are also located in tribal areas, with their own specific land acquisition and rehabilitation issues.
- This is particularly true for storage-based schemes, which are preferred over run-of-river projects due to higher efficiencies.
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