Bihar needs re-looking at hydro policy of State Govt.

Bihar, though essentially is made of plains, its territory has three hilly ranges and seventeen river basins which may offer significant opportunities for hydro power development but await detailed surveys to determine their full potential.

The BHPC, the nodal agency for the development of hydro sector in Bihar has identify some sites in different parts of the State and these divided among medium, large and small scale in the following manner have been assessed to have a potential for additional capacity creation to the tune of 3756MW:-

· Medium and large hydro schemes (with a capacity to generate more than 25 MW) – 3545 MW

· Small hydro schemes (with a capacity to generate less than 25 MW) -211 MW.

The BHPC has set up a chain of small hydro projects (SHPs) with the assistance of the Government of Bihar (GoB),the National Bank for Agriculture & Rural Development (NABARD) and  Ministry of New Renewable Energy (MNRE) and  now is transitioning into medium and large hydro projects such as the Dagmara hydropower project (125 MW ) with the external assistance.

Details of these projects are available on BHPC website:


The BHPC, however, is neither in a position to mobilize resources on its own to install new utilities on these identified sites nor to undertake studies at the required scale to cover all untapped river basins and hilly terrains for identification of new sites with potential for hydropower development. Hydro Power Policy needs changes to attract private investors to participate in Bihar’s hydropower development programme.

key objectives of the policy should be:-

  • Power is a critical driver for socio-economic development. Efforts at accelerating the rate of economic growth in a globalized economy are dependent on the provision of adequate, reliable and quality power at competitive rates. The basic objective of the electricity industry would be to provide adequate power at economic cost, while ensuring reliable and quality supply.

  • Hydro power projects, once established, have a long and productive life span of over 25 years, and though characterized by relatively high initial costs, have substantially lower costs in terms of operations and on the environment in the long run, when compared to coal or natural gas based generation.

  • Exploitation of the entire hydro potential in the state can contribute significantly towards eliminating power shortage, particularly peaking shortages in the state, and this will of course provide an impetus for growth and development in Bihar. The GoB is very aware of the changing environment post the enactment of the Electricity Act 2003 and is committed to reforming its power sector and encourages private investment in all segments of the power sector, including that of hydro power generation.

· The total estimated medium and large hydro power potential identified by BHPC, the nodal agency, untapped as on 31st December, 2008 is approximately 3,546MW, including pumped storage schemes. This untapped potential needs to be unlocked and developed at the earliest to meet the energy and peaking shortages of the state.

· Given the significant hydro potential in the state and the need to aggressively tap this potential, leveraging the expertise of the private sector and the resources of the state is crucial.

The main objectives of this policy should be:

· To harness the hydro potential of the state to capitalize on it being an environment-friendly sustainable source of energy and to enhance its contribution to  socio-economic development, keeping in line with the overall objectives of the Electricity Act 2003, the National Electricity Policy and the National Tariff Policy.

· To supplement efforts in bridging the gap between demand and supply of power, and in improving the balance in the hydro-thermal generation-mix of the state;

· To attract private sector investment in Bihar’s power sector by providing an investor-friendly regime and framework specially in light of the huge constraints imposed by the limited financial resources of the state;

· To develop hydropower projects on a BOOT (Build-Own-Operate-Transfer) basis in an eco-friendly manner, causing minimum distress to affected people, ecology and environment by adopting suitable remedial/mitigating measures and industry best practices;

· To protect the ownership and water usage rights of the local people.

· To make the power sector self sufficient in terms of finances and provide an additional potential source of revenue in the form of free power in accordance with the amended National Tariff Policy and the reversion of the project back to the state Government free of cost after the end of the operating period; and

· To create direct and indirect employment opportunities especially in rural and backward areas.

The Electricity Act, 2003 stipulates that generating companies shall not be required to obtain any license to establish, operate and maintain generating stations. Hydro power developers shall, however, need the approval of the state Government or the Central Electricity Authority (as the case may be) while developing hydro-electric power projects.

The hydro-power projects for which this policy would be applicable could be broadly classified under two sub-categories:

Category-I Projects with installed capacity of more than 25 MW but less than the 100 MW Project Developer to be selected through the MoU route
Category-II Projects with installed capacity of 100 MW. And above. 

Project Developer to be selected through the International Competitive Bidding (ICB) route

the views of potential investors must be taken on investors and stake holers should also be taken.