Himachal Pradesh, the hydropower seat of North India, is seeing a lot of private sector interest in taking up greenfield projects on BOOT basis. Speaking to Electrical Monitor, a senior official in the state's energy department noted that 15 projects aggregating around 1,320 mw were recently awarded to private enterprises, with Anil Ambani-controlled Reliance Power marking a big presence.

The official, who preferred not to be quoted, said that Reliance Power has been awarded five projects aggregating 672 mw, including the major 300-mw Purthi project in the Chenab River basin. Other winners included ABG Shipyard, a consortium of Tata Power and Norway-based SN Power, Welspun Group, LNJ Bhilwara Group, etc. The state government had called international bids for 18 projects aggregating 1,360 mw in October last year.

In a departure from the older norms, the state government is now allotting projects based on "additional free power" offered by developers. In the previous Congress-led regime, projects were given on the basis of highest upfront royalty offered to the state government. The minimum threshold for free power is 13 per cent for the first 12 years of operation, progressively moving to up to 31 per cent. Projects are allotted under a 40- year concession period after which they are returned to the state government. Apart from the free power, developers pay an upfront premium of 20 lakh per mw of installed capacity.

Explaining some cases, the official noted that the 236-mw Dugar project was given to a consortium of Tata Power and SN Power based on the free power of 22.35 per cent offered by the duo. Reliance Power quoted 21 per cent free power for all the five projects bagged, it is learnt. ABG Shipyard, which had earlier won the 126-mw Bardang project, was awarded two projects in this round of bidding. The new projects are Tandi (104 mw) and Rashil (102 mw)-both in Chenab basin. Welspun Group, Moser Baer and BMD Power (part of the LNJ Bhilwara Group) are also amongst the successful bidders.

Projects allotted to private sector*
Project	Basin	MW	Developer
Bara Banaghal	Ravi	200	Malana Power
Chango Younghthan	Satluj	140	Malana Power
Holi Bajoli	Ravi	180	GMR Group
Chhatru	Chenab	108	DCM Shriram
Tandi	Chenab	104	ABG Shipyard
Rashil	Chenab	102	ABG Shipyard
Lara Sumta	Satluj	104	Reliance Power
Dugar	Chenab	236	Tata Power + SN Power
Purthi	Chenab	300	Reliance Power
Bardang	Chenab	126	ABG Shipyard
Kuther	Ravi	260	JSW Energy
Sumte-Kothang	Satluj	130	Reliance Power
Teling	Chenab	94	Reliance Power
Shangling	Chenab	44	Reliance Power
* Partial list

Shifting ownership: Even as the Himachal Pradesh has been successful in attracting private interest in its hydropower potential, there have been several cases where projects have been withdrawn or transferred, even after allotment. The senior official said that some private developers have backed out of their project even after receiving the letter of intent, while in some other cases the state government has been able to find better bids.

For instance, the 236-mw Dugar project in Chenab basin was allotted to Mumbai-based Patel Engineering, sometime in 2008. The developer backed out of the project, resulting in a case of re-bidding, the official noted. Even the 104-mw Lara Sumta project in the Satluj basin, first given to CESC Ltd, has now been offered to Reliance Power, it is learnt. The 60-mw Patam project in Chenab basin, earlier allotted to Surya Pharmaceuticals, has now been put on hold, for reasons that were not immediately available. Recalling an older instance, the official said that the 260-mw Kuther project in Ravi basin was given to JSW Energy, following a high-court directive, canceling the previous allotment made to a consortium of DS Construction and a Nepalese developer, Himal Hydro.

XII Plan to bear fruit: According to information available, Himachal Pradesh has allotted nearly 6,700 mw worth of hydropower projects to Central agencies and private developers. This also includes projects being built by state government agency Himachal Pradesh Power Corporation Ltd, but excludes projects of less than 25 mw across all forms of ownership.

According to statistics available with Central Electricity Authority, 14 hydropower projects aggregating 4,472 mw are under execution in Himachal Pradesh. This comprises 2,763 mw in the Central sector, 1,414 mw in the private sector and 295 mw being developed by state governmentowned HPPCL. Of this entire 4,474 mw under construction, around 2,000 mw could turn operational, in the best case. However, industry experts feel that around 1,000 mw of new hydropower capacity is likely in Himachal Pradesh, largely coming from some units of NHPC's 4x130-mw Parbati (Stage III) project and the 4x250-mw Karcham Wangtoo project of Jaiprakash Group. Most of the new capacity under construction is likely to go on stream in the XII Plan period and beyond. So far in the XI Plan period, the 192- mw Allain Duhangan project in Manali district is the only project to have commissioned. The project is owned by AD Hydro Power Ltd, a 100 per cent subsidiary of Malana Power Company Ltd, part of the LNJ Bhilwara Group.

Power Scenario: Himachal Pradesh has an assessed hydropower potential of 18,540 mw, coming from projects of 25-mw or more. This is around oneeighth of India's total. Himachal is also second to only Arunachal Pradesh where the hydropower potential is a staggering 50,328 mw. Himachal's untapped potential, excluding projects commissioned or under development, is over 40 per cent. The private sector is expected to play a significant role in hydropower development in Himachal Pradesh, although most of the mega projects would be executed by public sector entities like NHPC, NTPC, SJVNL, etc. As of today, the installed hydropower capacity in the private sector is 578 mw. Going only by those projects under physical construction today, this should reach at least 2,000 mw by the end of the XII Plan period. Although Himachal Pradesh has allotted significant number of projects to the private sector in recent years, their timely completion would depend on the ability of private developers to expedite pre-project work like securing environmental clearances, attaining financial closure, etc.

Hydropower projects under execution
Ownership	No. of Projects	Capacity (mw)
Central Government	5	2,763
State Government	3	295
Private Sector	6	1,414
Total	14	4,472
Data as of March 1, 2011

As such, Himachal Pradesh is quite comfortable with respect to meeting its own power requirement. In 2010-11, the northern state had an estimated power requirement of 7,602 million kwh that was met to the extent of 7,335 mw. The shortfall of 3.5 per cent compared favourably with the national average of 8.5 per cent. In the years to come, Himachal can look forward to hydropower being an important source of revenue. The hilly state already has the distinction of housing India's largest operational hydropower project today-the 1,500-mw Nathpa Jhakri project owned by SJVNL Ltd, erstwhile Satluj Jal Vidyut Nigam.

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