Power agreement puts Indian hydro project back in business

13 April 1998

An Indian/American partnership has signed a power purchase agreement (PPA) with the Uttar Pradesh State Electricity Board for the 330MW Srinagar hydro project in northern India. Duncans Industry, the fifth largest company in India, and Synergics Hydro Asia, a subsidiary company of US-based Synergics Energy Development, have formed the Duncans North Hydro Power Company to oversee the project.

The PPA will last for a period of 30 years with a 20-year extension, the project company explains, and will commence with commercial operation. Power from the scheme will be fed into the northern regional grid in India and will be supplied to the states of Uttar Pradesh, Rajasthan, Haryana, Punjab, Himachal Pradesh, Jammu and Kashmir, Delhi and the Union Territory of Chandigarh.

The scheme has been in existence for 14 years but was delayed due to a lack of financing. In 1984 the Central Electricity Authority (CEA) approved the project for an installed generating capacity of 200MW. Latterly, after another CEA and techno- economic review in 1987, Srinagar was given approval for the installation of five 66MW generating units. In the same year the World Bank was asked for financial assistance and construction was taken up in earnest. Infrastructure facilities, including a construction colony, buildings, roads, bridges and acquisition of land were carried out.

However, after the state government experienced financial problems, and the consequent withdrawal of funding from the World Bank, the scheme was suspended in 1990. It was not until 1994, when the government of Uttar Pradesh decided to entrust the project to the private sector, that the scheme began to make progress. On 27 August 1994, the state government entered into a memorandum of understanding with Duncans Industries.

Costing US$600M, the project is located on the Alaknanda river in the Himalayas and is proposed as a run-of-river development. Construction is expected to take five years and will comprise a dam, power tunnel, penstock and powerhouse.

The Uttar Pradesh government estimates that in view of its shortage of energy and peaking availability in its power system at the present time, an annual increase of 500MW will be needed in the region over the next ten years. The state is described as being blessed with large hydroelectric potential — estimated at 9744MW — but only 15.5% of this has been developed so far. Furthermore, in its National Power Policy, the CEA is favouring hydro power due to its renewable, non-polluting and low generating characteristics.

Duncans North Hydro Power Company says that Srinagar will meet the annual power requirements of nearly three million people in India’s power-starved northern region.

Commenting on the scheme, Wayne Rogers, president of Synergics said: ‘This hydro power project will help alleviate acute energy shortages in the region and generate power in an environmentally clean way. It will increase the quality of life for millions of people.’

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