Analysis of small hydro power project - a comparative study of Nepal and India (Karnataka)

Abstract

Hydropower is the most widely used renewable energy source worldwide, contributing almost with 17 % to the fulfillment of the world electricity generation. Nepal has a huge hydro power potential which up to now hasn’t be exploited at all. Large hydropower projects haven’t been that successful with its share of disadvantages and difficulties. Recently, there has been world wide popularity of small hydro power as a prosperous method of generating energy due to its profound advantages like low gestation period, lower capital and minimal environmental degradation. Moreover, with the active participation of the private sector encouraged by the significant subsidy opportunities by the state, small hydropower (SHP) could be the answer to the countries acute energy deficiency and rural electrification. In Nepal, today SHP contributes about 144 MW (25%) of the total electricity produced in the country. This study is concentrated on the study of economic feasibility of SHP as an alternative source of energy for Nepal and comparing the cost-benefit analysis of two projects in Nepal and India. The huge number of rivers and the available high head in Nepal are an added advantage in producing more energy with less investment in electromechanical machines and civil structures. The cost of energy generation has gone drastically in the past years and with better state support and high involvement of the private sector, SHP could have a better economy of scale. With active participation of all sectors, providing low interest bank loans, tax incentives and subsidization, SHP can be proved considerably profitable investments, contributing remarkably to the national electricity balance and help in off grid rural electrification. In the context of the above interesting issues, the present study reviews in detail the existing situation of small hydropower plants in Nepal in comparison to India and investigate was lessons are to be learned to further improve the sector in the country.