Description
The State is not rich in the non-renewable sources of fossil fuels which could be used for energy generation but there are huge renewable sources of energy in the form of water resources which can meet the demand of the people. There is little scope for any other forms of power generation in the state since there are few feasible sites for plants and the area’s difficult topography makes the transport of raw materials complicated and costly.
The state of Jammu and Kashmir with smallest economic size of $7.36 Billion as against 82.04$ billion in UP showing 6.28% growth and with a third lowest per capita income of 27250. Primary sector contributes 25.82% with an annual growth of 1.79%. The state contributes 1% to India’s GSDP. The secondary sector contributes about 28.29%. Whereas the tertiary sector contributes around 46% in GSDP. The growth rate of the services sector is 5% which is rather stagnant in state.
The economic prosperity of the state is inextricable from that of its water resources, and its future depends on finding an equitable, sustainable outcome for the region’s most valuable resource. Failing to address the acute and escalating water issues will generate increasingly dire consequences, particularly considering the rising pressures of population growth and climate change. Integrated water cooperation and sharing between Pakistan and India is important enough in its own right, but perhaps finding a new way to navigate Kashmir’s waters will provide the path to peace that the people of Jammu Kashmir, its parent countries, and the wider international community seek. The disputed territory’s potential could help to transform it “from a valley of death and destruction to a center of excellence in…engineering.”
The main asset of Jammu & Kashmir state is its water resources. There are near about twenty (20) rivers flowing through Jammu & Kashmir. Three rivers the Indus, Jhelum and Chenab have to go to Pakistan whereas Water of Sutlej, Beas and Ravi are to be consumed by India. The state needs an investment of US $ 33.84 Billion for achieving the target of generating 22000 MW of electricity according to the new estimates.
The JKSPDC presently has only 20 hydroelectric projects with installed capacity of 758.70 MW and actual production of 719.8MWs located in various districts of J&K including 450 MW Baglihar Hydroelectric project. Besides NHPC owns three main projects viz Salal, Dul-Hasti and Uri 1 with the installed capacity of 1560 MW of power.
Being rich in hydro resources with hydro potential of about 22,000 MW the state is suffering from deficiency of 1567.70MW of electricity to meet the demand of state and also the annual energy loss of 60,000 million units valuing Rs. 30,000 Crores. Contribution of electricity supply from all sources is 38.7% where in state contributes 29% and the share of central government projects is around 9% and a meager contribution comes from the private sector projects which is 0.7% less than one percent. The state needs a huge investment of US $ 33.84 Billion for achieving the target of generating 22000 MW of electricity.
Despite of being rich in hydroelectric resources Kashmir has been unable to grow to the optimum potential of its agriculture and electricity sectors, its most vital needs for economic and human development. Various factors have been identified which include:
• Indus Water Treaty: IWT permits building storage aggregating 3.6 million acre feet (MAF) on the three rivers of the Indus, Jhelum and the Chenab.
• The projects handed over to NHPC on power sharing agreement basis are presently completely under the control of NHPC and no consideration is being given to the State in terms of power supply as per the earlier agreement. In fact power generated within the State by NHPC is being fed to the Northern Grid from where J&K is purchasing its power requirement.
• The state of J&K having hostile terrain already suffers from huge amount of transmission and distribution losses.
• Excess payment of Rs. 2340 Crores on power purchases from Salal project. Whereas the agreement provides that J&K was entitled to 47 percent of power from Salal including 35 percent NSG at bus bar rate (generation cost) and 12 percent of royalty cost.
• Huge amount for power purchasing from other state.
• The state not been allowed to utilize its water resources freely, the state could have been able to produce the increased amount of electricity within the state and the huge amount of money which it has to pay for purchasing the power outside the state could have been invested for other developmental purposes resulting in overall growth of the J&K state economy.
• The absence of any legislation regarding taking over the power projects being run within the State. There is also at the same time need to review the existing power policy to make it more investor friendly. This is all the more essential in order to rope in greater number of private players for investing and sharing their expertise in power sector.
With a growth in population the need for the supply of electric power is growing very fast which provide an incentive for the development of the industry as services sector is an important growth driver. The increase in demand for power will help the economy grow and it will lead to modernization, industrialization and improvement in basic amenities culminating into quality life of the people. There has been a growing realisation in developing countries that micro-hydro schemes have an important role to play in the economic development of remote rural areas, especially mountainous ones like the valley of Kashmir. Hydropower is a renewable resource because it uses the continuous flow of rivers and streams to produce electricity without using up the water resource. It is also a clean technology because it does not rely on the burning of fuels like oil, coal, or natural gas to produce power.
The best hydro power projects suitable to the state are Mini-hydro power projects. Generally, small hydro projects built for application at an isolated area are run-of-river developments and for this purpose the topography of valley is very suitable and relevant. The best geographical areas for exploiting small-scale hydro power are those where there are steep rivers flowing all year round.
Mini-hydro has a power output of 100 kW to 1 MW, and is typically used for a small factory or isolated community. Most of the environmental impacts of small-scale hydro developments can be avoided in part or in whole by a good design and appropriate construction and operating practices. Since small hydro projects usually have minimal environmental and licensing procedures, and since the equipment is usually standardized and simplified, and since the civil works construction is also small, small hydro projects should be developed very rapidly in the state which will help in tapping the total identified power potential of 22000MWs.
For this purpose the main source for the development of hydro power projects to the state of Jammu and Kashmir are Jhelum, Chenab, Indus and Ravi on which main power projects are developed and developing. Total identified potential of River Jhelum is 3560 MW potential of which only 750.1 MWs have been tapped and projects under construction will produce 570 MWs. River Chenab has the highest potential of 10360 MWs of which only 1563.8 MWs have been tapped and further 450 MWs are under construction. Indus is the third biggest source of hydro power in the state with the total capacity of 2060 MWs of which only 13.3 MWs have been harnessed and 90.26 MWs are under construction. River Ravi has a potential of 500 MWs of power and 25.8% have been tapped and still 74.2% is available.
Nevertheless, there lies a big gap between actual potential and unharnessed potential; 78.93% of the total potential of Jhelum is un-utilized, 84.91% of Chenab, 95.62% of Indus and also 74.20% power potential of Ravi is yet to be utilized.
The focus should be on the main three river basins of the state include Indus and its tributaries, Jhelum and its tributaries, Chenab and its tributaries who offer great scope for generation of power through Hydroelectric plant and whose potential is identified and on these rivers the development of mini-hydro will prove cost effective and profitable as well. Also because of the abundant water resources state could have been able to generate surplus electricity which it can export to neighboring states, resulting additional revenue to the state. The actual requirement of the state is 2500MWs and the actual potential is 22000 MWs. The state would earn a net incremental revenue of Rs. 97500 crore [15Billion$] after meeting the shortfall and exporting the remaining portion of 19500MWs to the neighboring states.
Since power and water has become an intensive need for industrialization and hence development, if some kind of raw material is available for exploitation, it should to be utilized fully. Then optimal exploitation of the available resources of the State would meet the State’s demand and also will boost the overall economy of the state.
The revenue generating capacity of all projects is estimated at Rs. 110000cr per annum, this will help the state to invest sufficiently in primary, secondary and tertiary sector for which present expenditure is Rs.8000 crore (Budget figure 2013-14).
Service sector will lead the economy as the major portion of (105426 crore) to the state revenue of (153266 crore) will come from the service sector to the state which inturn will change the nature of the state economy from agrarian to the tertiary economy.
Presently the revenue surplus from all sources is Rs. 5280Cr difference
between revenue receipts Rs.33970 Crore and revenue expenditure Rs.27096cr.Total resources available to the state is Rs.19748 crore (Budget figure 2013-14). Total capital and revenue receipts are 38068 of which 51% is received in the form of Central grant.
If the power projects are financed by World Bank, IMF and other funding agencies, the state would be able earn Rs.105426 Crore revenue from untapped resources and hence the total revenue from all hydroelectric power resources will be Rs. 110000 Crore which will be used to first repay all the debts within two years.
If the hydro power projects are developed by the central government, it will lead to tremendous loss to the state and the state will generate only 17752.25 Crore revenue from state run and central share in comparison to Rs. 105426 crore if the projects are taken up by the state herself which is less than the borrowed funds 19414.68 crore from the central government. Every effort should be made by the state government to decide the avenues of finance required for the most precious assets to protect the state from losing Rs. 87673.75 Crore annually. Besides a net income of Rs.18555 comprising 88% revenue from hydro power projects of the state of Jammu and Kashmir will go to the central pool and the share of state from added pool will be very minor and will not have any significant impact on state economy.
To the contrary if the projects are developed by the state and if the development is assumed instant and projects operated at full capacity, then the payback period will be two years dividing the total cost of projects by the net annual cash inflows. It means if the projects are developed in one year and operated at full capacity then the payback will be two years. Albeit it seems theoretically an ideal alternative and a very favorable situation for the prosperity of state as the borrowed money will easily be repaid within two years but it needs a very strong initiative and government support in arranging finances for the purpose which has not happened so far.
Projects can also be developed in different phases and different payback period can be calculated.
The best option would be if the development of total power projects is divided into four phases wherein every phase will develop 5271.3MWs and cost associated with every phase will be will recover in two years. 5271.3MWs will generate 52713 in two years excluding the construction phase and Rs 105426 Crores in four years. Out of this amount 52713 has to be repaid to the lending agencies and the remaining amount will serve as a basis for the construction of the second phase of 5271.3 MWs for which state needs no external financing as the money generate with in four years after repayment will be sufficient to be invested into it. The payback period will be 8 years if phase wise construction is considered.
This will have a very positive impact on the state Economy. With the development of hydro-power projects the contribution of the services sector will increase from 45.89% to 83.11%.Service sector will surpass the primary and secondary sector by Rs 105426 crore and will lead the economy as the major contributor of towards the state economy which will change the nature of economy from agrarian to a dynamic service economy.
The impact of the development of hydro-electric power projects by the state on the primary, secondary and tertiary sector of the state will be very dynamic as the share of service sector changes positively from 45.89% to 83.11% whereas the share of primary and secondary sectors show a negative growth at 8% which will increase at a very fast rate with the time in future as electricity serves the basis for the development of all the sectors.
The state would be able to manage its economy independently and the contribution towards National GDP would increase significantly because the pace of development of primary secondary and tertiary industry will multiply manifold. With the development of power sector to its fullest capacity revenue of the state will increase from 5280 to115280Crore, which is (twenty two) 22time more than present position. Expenditure on power will be very low and 9% of (27096) 2438.64 crore of expenditure on power and 9% expenditure on Interest will be utilised for developing the infrastructure of the state and other social sectors. Therefore, with the owned funds for the administration, the state would be able to save around 5000 Crore rupees and this surplus will be an extra capital available for the development of social infrastructure of the state.
Unemployment in the state will be alleviated as with the huge surplus available with the state, new industries on modern lines will be developed, all the unemployed educated youth who are millions in number will find the livelihood within the state which will serve as a stimulus for peace and prosperity and the sense of alienation will eliminate.
This will strengthen not only the state economy, promote peace and prosperity but also the living standard and per capita income of people will change proportionately to change in economic size of the state from $7.36 US Billion to $24.22 US Billion, thereby increasing the per capita income of the people of state from Rs. 40000(615$) to Rs. 131600 (2025$) preceding to Delhi with per capita income of Rs 117000 and Haryana with 78781. This development will promote the state as the first richest state among the northern states of India.
Micro-hydro schemes should be owned and operated by the communities they serve, with any maintenance carried out by skilled members of that community. So they provide employment in themselves, as well as providing the power to re-energize entire communities. State can also provide the industrial loan to the budding entrepreneurs who in turn will create numerous avenues of employment for the young, dynamic and talented youth of the state. Therefore, estimated power potential of the state is very helpful to bring peace, prosperity and stability in the ongoing crisis in J&K State.
1 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
A STUDY
ON
(FISCAL POTENTIAL OF HYDRO-POWER PROJECTS OF
JAMMU AND KASHMIR AND ITS IMPACT ON
REGIONAL ECONOMIC DEVELOPMENT)
RESEARCH REPORT
By
(Khursheed Ahmad Bhat)
Assistant Prof. Finance Department of Hospital Administration
Teerthanker Mahaveer University
Under the supervision of
(ShakeelQalander)
(Former President FCIK J&K)
Professor K.K. Pandey (Director International Affairs TMU)
OFFICIAL ADDRESS SIGNATURE
Khursheed Ahmad Bhat
Assistant Prof.Accounting&Finance
Deptt.Of Hospital Administration
TMU Moradabad 244001
TEERTHANKER MAHAVEER UNIVERSITY
MORADABAD, U.P., INDIA
2013
2 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
ACKNOWLEDGEMENT
My sincere thanks to Professor R. K. Mittal Vice-Chancellor
Teerthanker Mahaveer University who allowed me to complete this
research on the most significant topic concerning Kashmir society. I am
highly grateful to Professor G. Q. Lone H.O.D Department of Commerce
and Management studies. I own my sincere gratitude to Mr. Shakeel
Qalander my research guide former president Federation of Chamber of
Industries Kashmir (FCIK).Professor Hameeda Nayeemand to all the
members of Kashmir Civil Society who extended their support and their
precious time. I take this opportunity to thank each and every one who
have stood by my side and have motivated me to complete this research
particularly my best friend Miss Shazia Rasool. Last but not the least I
thank to Mr. Ajaz Ahmad secretary J&K Cable Car Corporation
Department of Government of Jammu and Kashmir and project
Consultant government of Jammu & Kashmir who has helped me with the
technical support and guided me in the right direction.
3 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
Dedication
The entire project has been dedicated to the
economically deprived youth and citizens of J&K as a
light to a better future.
4 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
Contents
Page No.
1. Introduction 6-19
1.1 introduction 6-10
1.2
Existing and upcoming power projects and
their capacity.
11
1.3
Lower Jhelum
Upper Sindh 1
12-14
1.4
Indus Water Treaty [IWT], 1960
15-19
2. Literature Review 20-32
3. Problem Statement 33
4. Objectives of the Study 34
4.1 Objectives of the Study 35
6. Research Methodology 35
6.1
Research Methodology,
Data analysis
36
Scope and limitations of the study 3
7. Expected Contribution of the Study 37
8
Classification of power projects 38
Model of 1 MW Hydroelectric power project
Classification of hydropower by size.
39
41
Classification of power projects
Project design
40
41
5 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
Scheme components
Classification of turbine types.
Small hydro project development
45
50-59
9
Analysis of all hydro electric projects of the
state of Jammu and Kashmir
60-68
10 Conclusion 69-77
11 Annexure
11.1 List of existing Power projects 78-83
11.2 B List of upcoming
Power Projects
References 84
6 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
INTRODUCTION
Jammu and Kashmir is the northern most state of India. It is situated
mostly in the Himalayan mountains. Jammu and Kashmir shares a
border with the states of Himachal Pradesh and Punjab to the south and
internationally with the People's Republic of China to the north and east
and the Pakistan-administered territories of Kashmir and Gilgit–
Baltistan, to the west and northwest respectively. Formerly a part of the
erstwhile Princely State of Kashmir and Jammu, which governed the
larger historic region of Kashmir, this territory is disputed among China,
India and Pakistan. Pakistan, which claims the territory as disputed,
refers to it alternatively as Indian-occupied Kashmir or Indian-held
Kashmir, while some international agencies such as the United
Nations, call it Indian-administered Kashmir. The regions under the
control of Pakistan are referred to as Azad Kashmir. Jammu and
Kashmir consists of three regions: Jammu, the Kashmir valley and
Ladakh. Srinagar is the summer capital, and Jammu is the winter
capital. While the Kashmir valley is famous for its beautiful
mountainous landscape, Jammu's numerous shrines attract tens of
thousands of Hindu pilgrims every year. Ladakh, also known as
"Little Tibet", is renowned for its remote mountain beauty
and Buddhist culture.
The State of Jammu and Kashmir, being the mountainous state is
deficient in major renewable resources other than water and forest. In
fact nature has endowed unending supply of water resources in the
state which are the backbone of J&K State’s economy. The Water bodies
7 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
of the J&K State have enormous economic potential in the shape of
hydro power generation, irrigation to enhance the agriculture, artificial
lakes and pounds for healthy growth of tourism. Unfortunately, these
rivers water has not been adequately harnessed because of inadequacy
of funds, political instability and lack of the will are the main factors for
utilization of water resources in the State. Some restrictions are imposed
by theIndus Water Treaty [IWT], 1960, because J&K state cannot
exploit its water resources in best manner. However taking together all
these factors have resulted in an economic backwardness of the state. In
the past five decades none of the work has done in J&K state to quantify
the impact of IWT, neither from power department nor from agriculture
department. From last couple of years by the thought provoking efforts
of some economists of J&K state, this issue was raised at state level.
Now there have been growing concern and anger in the state over the
negative consequences of IWT on state economy. Both official and public
circle in the J&K state are pleading the review of IWT, according to the
requirements of the J&K state immediately.
The water resources of Indus Basin managed between India and
Pakistan within the framework of the Indus Waters Treaty. As per the
terms and conditions of the IWT, six rivers have been taken into
consideration along with the tributaries and natural reservoirs which
were termed into “eastern and western group of rivers”. The water of
three rivers the Indus, Jhelum and Chenab has to go to Pakistan
whereas Water of Sutlej, Beas and Ravi are to be consumed by India.
The Eastern Rivers, whose use was exclusively given to India, flows
through well-defined legal territory which formed the part of the Indian
Union created by the partition of the British-India. While the western
rivers flowing through the disputed territory of Jammu and Kashmir
state. The IWT treaty giving exclusive rights to India over the use of
waters from eastern rivers for any purposes, but the scope of J&K over
western rivers is guided by IWT. At the time of the signing of IWT nobody
has taken care of this forgotten disputed land and people. Subsequently
the State of Jammu and Kashmir, which is mainly effected at the
8 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
benefits of the two countries, could utilize through residual benefits of
its resources to the optimum and deficits caused by the two agreeing
parties.
The IWT was a first bilateral approached to begin the relation between
two countries. Though IWT was cordially welcomed in both countries
and also protected all water rights of both parties. Subsequently the
Pakistan has built Mangla and Tarbela dams and several storage
facilities on Indus, Jhelum and Chenab rivers and India also has built
various Dams and Barrages on Sutlej, Beas and Ravi Rivers. It is
unfortunate that Srinagar, Muzaffarabad and Gilgit governments have
failed to defend the manner and extent to which the people of Jammu
and Kashmir are entitled to have a role in the use of their water
resources at Mangla (Pakistan administrative Kashmir), Salal, Dulhasti,
Uri, (Indian administrative Kashmir) and Diamir Basha Dam in Gilgit
(Pakistan has illegally made his province). Yet, India and Pakistan are
not acceding to the water and electricity requirements in both sides of
Kashmir. Also both countries are never talking about the helpless people
of Kashmir and their legitimate rights of water from their own rivers.
The Jhelum, Chenab and Indus Rivers all flow through Jammu and
Kashmir, yet under the IWT the state must seek permission from Indus
water commissioners before any economic development.
The treaty which was carried out in the best interest of both nations
has, however, deprived the Jammu and Kashmir state to use its own
water resources and thereby severely affected the developmental process
of the state. Conforming to the treaty criteria, State cannot fully exploit
the water potentialities of the Indus, Jhelum and Chenab rivers.
Nevertheless Kashmir is well-known for its renewable resources all over
the world. The main asset of Jammu & Kashmir state is its water
resources. There are near about twenty (20) rivers flowing through
Jammu & Kashmir.
These rivers are mentioned as below:
9 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
1)-Chenab River
2)-Doda River
3)-Dras River
4)-Indus River
5)-Jhelum River
6)-Lidder River
7)-Markha River (India)
8)-NalaPalkhu
9)-Neelum River
10)-Nubra River
11)-Ravi River
12)-Saltoro River
13)-Shingo River
14)-Sind River
15)-Suru River (Indus)
16) Shyok
17)-Tawi River
18)-Tsarap River
19)-Yapola River
20)-Zanskar River
Of above all the rivers there are four rivers on which power projects are
established .These rivers are:-
• Chenab River.
• Indus River.
• Jhelum River.
• Ravi River.
Chenab River:-The Chenab River is a major river of Jammu and
Kashmir and the Punjab in Pakistan. It forms in the upper Himalayas in
the Lahaul and Spiti district of Himachal Pradesh, India, and flows
through the Jammu region of Jammu and Kashmir into the plains of
the Punjab, Pakistan. The waters of the Chenab are allocated
to Pakistan under the terms of the Indus Waters Treaty.
Indus River:-The Indus River is a major river which flows
through Pakistan. It also has courses through western Tibet (in China)
and India. Originating in the Tibetan plateau in the vicinity of Lake
Mansarovar, the river runs a course through the Ladakh region
of Jammu and Kashmir, Gilgit, Baltistan and flows through Pakistan
in a southerly direction along the entire length of Pakistan to merge into
the Arabian Sea near the port city of Karachi in Sindh. The total length
of the river is 3,180 km (1,980 mi). It is Pakistan's longest river. The
river has a total drainage area exceeding 1,165,000 km
2
(450,000
sq mi). Its estimated annual flow stands at around 207 km
3
(50 cu mi),
making it the twenty-first largest river in the world in terms of annual
flow. Zanskar is its left bank tributary in Ladakh. In the plains, its left
bank tributary is Chenab which itself has four tributaries, namely,
Jhelum, Ravi, Beas and Satluj.Its principal right bank tributaries
are Shyok , Gilgit, Kabul, Gomal and Kurram. Beginning at the heights
10 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
of the world in a spring and fed with glaciers and rivers in the
Himalayas, the river supports ecosystems of temperate
forests, plains and arid countryside.
River Jhelum:-The River Jhelum rises from a spring at Verinag situated
at the foot of the PirPanjal in the south-eastern part of the valley
of Kashmir in India. It flows through Srinagar and the Wular
Lake before entering Pakistan through a deep narrow gorge. The Neelum
River, the largest tributary of the Jhelum, joins it, at
Domel Muzaffarabad, as does the next largest, the Kunhar River of
the Kaghan valley. It also connects with rest of Pakistan and Pakistan
occupied Kashmir on Kohala Bridge east of Circle Bakote. It is then
joined by the Poonch River, and flows into the Mangla Dam reservoir in
the district of Mirpur. The Jhelum enters the Punjab in the Jhelum
District. From there, it flows through the plains of Pakistan's Punjab,
forming the boundary between the Chaj and SindhSagar Doabs. It ends
in a confluence with the Chenab at Trimmu in District Jhang. The
Chenab merges with the Sutlej to form the River which joins the Indus
River at Mithankot.
Ravi River:-The Ravi is a trans-boundary river flowing through North-
western India and eastern Pakistan. It is one of the six rivers of
the Indus System in Punjab region (name of Punjab means "Five Rivers.
After the partition of India in August 1947, the waters of the Ravi River,
along with five other rivers of the Indus system (Beas, Sutlej, Chenab,
Jhelum and Indus), divided India and Pakistan under the Indus Water
Treaty, which was facilitated by the “World Bank”. Subsequently, Indus
Basin Project has been developed in Pakistan and many Inter Basin
Water Transfers, Irrigation, Hydropower and multipurpose projects have
been built in India
11 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
EXISTING AND UPCOMING POWER PROJECTS AND
THEIR CAPACITY.
STATE SECTOR Configuration Installed Capacity in MW
Name of Power House
JHELUM RIVER BASIN
Lower Jhelum 3 x 35 105
Upper Sindh 2x11.3 22.6
Ganderbal 2x3+2x4.5 15
Upper SindhII 3x35 105
Pahalgam 2 x 1.5 3
Karnah 2x1 2
CHENAB BASIN
Chenani-I 5x4.66 23.30
Chennai-II 2x1 2
Chenani-III 3x2.5 7.50
Bhaderwah 2 x 0.5 1
Baglihar 3x150 450
RAVI BASIN
Sewa-III 3x3 9
INDUS BASIN
Iqbal 3x1.25 3.75
Hunder 2x0.20 0.40
Sumoor 2x0.05 0.10
Igo-Mercellong 2x1.50 3
Haftal 2x0.50 1
Marpachoo 3x0.25 0.75
Bazgo 2x0.15 0.30
Stakna 2x2 4
Total 758.70 Mw
CENTRAL SECTOR
Salal HEP 6x115 690
Uri –I 4x120 480
Dul-Hasti 3x130 390
Total 1560
12 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
LOWER JEHLUM
The Lower Jhelum Hydel Power Project (LJHP) has a distinction. It is the
last power project that PDC owns on the Jhelum. Beyond this, it is a
roaring Jhelum that NHPC taps at Uri-I and Uri-II, shortly before it
gushes across the LoC. Even since the project was commissioned in
1978, LJHP has stopped generations only once for a prolonged duration.
That was in April 2001 when its fore bay was damaged and within a
year it was back to work. There have been some minor snags that
disrupted generation; the last one was in May 2011 when two of the
three units stopped working for a few days. Conceived in late sixties, the
LJHP was taken up for implementation in 1970. With an installed
capacity of 105 MW, its three units of 35 MW each are currently
generating only 90 MW. The first one was commissioned in February
1978 and was followed by second unit in January 1979 and the last
unit in November 1979. While the locals managed most of the civil
works, mostly by the Tirath Ram Ahuja Construction Company and
Continental Constructions Limited (now Continental Construction
Projects Ltd), the electro-magnetic part of the project was managed by
Bharat Heavy Electricals Limited (BHEL). Housed on Jhelum’s gorgeous
banks, the power house is nested in lush green mountains. The journey
towards the power house starts at the right side of river Jehlum at
Gantamulla wherefrom the 9-km water conductor takes off. The 7700
cusecs canal snakes around the foothills till it reaches the barrage. Its
length is 371 feet and has the capacity of holding 80000 cusecs of flood
discharge. Inside it is a spill way, a fish pan and under knives which
function as garbage cutters. It has 10 bays of 13 meters each. A silt
ejector is located around 2.5 km away. A few kilometers ahead is the
balancing reservoir used for maintaining the requisite level of discharge.
It is an earthenware water reservoir 1036 meters long with an average
width of 183 meters. The canal then travels three more kilometers to
reach the forebay where from the penstocks take off. The project has a
head of 202.72 meters. It has three penstocks feeding three units.
13 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
UPPER SINDH 1
The indigenously built power station has never stopped working with
returns of several times of the investment made in constructing the
project, making some to call it a golden goose. A Kashmir Life report.
The dusky village of Sumbal, 17 kms from Kangan, has one of
Kashmir’s prized assets located on Sindh rivulet – a power project.
While it distinguishes the hamlet from its entire neighborhood, the
project itself is unique. It is Kashmir’s first locally designed and
constructed power house that is running uninterrupted since it was set
up with no complaints and no major issues unlike its cousins
downstream. Every year, it evacuates energy to the grid which is five
times the investment that the state government made in it in seventies.
In a way, yes, it is a golden goose, said a young engineer overseeing its
operations. “It trips only when discharge goes up and we put it off.”
Conceived in sixties, the work on the project started in the
summer of 1965. Most of the civil works were managed by local
contractors who laid the canal and set up colonies and the main power
house buildings. Part of the civil works were executed by the Build
Right, a Kolkotta based firm. The electrical part of the plant was directly
managed by Bharat Heavy Electrical, then Heavy Electrical only. The
twin units went into generation in December 1973 and Jun1974,
respectively. Projects water conductor takes off at Kulan. The canal goes
underground for 396 meters to enter the balancing reservoir – where the
PDC is keen to develop a tourist facility owing to the availability of vast
stretch of land running parallel to the highway. The gravitation canal is
a long 11.6 km structure that zig-zags the foothills falling in the Sindh
forest division to reach the forebay. In between, it passes through 400
meters of tunnel and a duct near Gund. It has a single penstock with a
head of 149 meters that bifurcates to run the two Francis vertical
turbines at Sumbal. What is interesting is that the two turbines are of
the capacity of 11.3 MW each but the discharge is less. When the
project was ready and the BHEL was asked to supply the two 7 MW
turbines, they responded saying the state government will have to wait
14 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
for two years, Singh said. The government was desperate to see the
project taking off and purchased two machines of 11.3 MW with an idea
that it will be later upgraded.”
But the capacity of the canal was the main limitation. Since it could
only get 420 cusecs of water, there was no possibility of generating more
than 14 MW. So the additional capacity of the machines could not be
utilized.
Last year, however, the PDC improved the canal by upgrading its
capacity. Now it can bring in 510 cusecs which has improved
generations. The project generates 17 MW. The project could generate
more but planners have hit a major problem – the capacity of the tunnel
cannot be improved at all because it was designed for water required for
14 MW only. By now the USHP-I must have generated more than 3100
million units. Though the machine is perfectly fine but the PDC is keen
to prolong its life. This has become all the more necessary as BHEL says
it does not have many of the spares of the machinery because the
technology has improved. Already RMU has been approved at a cost of
Rs 24.99 Crore that will add to its capacity by around 3 MW. The Power
Finance Corporation has approved Rs16 Crore funding as early as
January 2006.Some of the spares have started landing on the site.
Initially the hydraulic governors are being replaced by electronic ones.
SF6 brakers would be replaced and excitation systems would be
installed. Apparently it would be at the latter stage that the functional
turbines would be replaced because the RMU will improve its condition,
and output to add to its life.
Interestingly, the April 1970 DPR re-appropriated the fund requirement
of the project, and accessed by Kashmir Life, put a cost of Rs 10.72
Crore on the project. Engineers say it might have taken a bit more
because of price escalations. SERC has put its cost at Rs 69.12 Crore
and its tariff at Rs 0.70 per unit. The project generated 337.98 lakh
units in 2010-11 and 821.21 lakh units in 2011-12. [1]
15 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
INDUS WATER TREATY
On September 19, 1960, India and Pakistan has signed Indus Water
Treaty (IWT) over the water sharing of Indus basin. The water of Indus
basin is divided between eastern and western rivers. The Eastern
Rivers, whose use was exclusively given to India, flows through well-
defined legal territory which formed the part of the Indian Union created
by the partition of the British-India. While the western rivers flowing
through the disputed territory of Jammu and Kashmir. But the IWT
gives exclusive rights to India over the use of waters from eastern rivers
for any purposes; however the scope of J&K over western rivers is
guided by IWT, which has snatched J&K’s inherent rights over water.
Subsequently the State of Jammu and Kashmir, which is mainly
effected at the benefits of the two countries, could utilize through
residual benefits of its resources to the optimum and deficits caused by
the two agreeing parties. Due to restrictions imposed by IWT on tapping
of water resources, the Jammu & Kashmir has been unable to grow to
the optimum potential of its agriculture and electricity sectors.[4]
NATURE OF AGREEMENT BETWEEN STATE AND CENTRAL
GOVERNMENT AGENCIES.
1. The State of Jammu and Kashmir, being the mountainous state is
deficient in major renewable resources other than water and forest. In
fact nature has endowed unending supply of water resources in the
state which are the backbone of J&K State’s economy. The Water bodies
of the J&K State have enormous economic potential in the shape of
hydro power generation, irrigation to enhance the agriculture, artificial
lakes and pounds for healthy growth of tourism. Unfortunately, these
rivers water has not been adequately harnessed because of inadequacy
of funds, political instability and lack of the will are the main factors for
utilization of water resources in the State. Some restrictions are imposed
by the IWT, 1960, because J&K state cannot exploit its water resources
in best manner. However taking together all these factors have resulted
in an economic backwardness of the state. In the past five decades none
of the work has done in J&K state to quantify the impact of IWT, neither
16 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
from power department nor from agriculture department. From last
couple of years by the thought provoking efforts of some economists of
J&K state, this issue was raised at state level. Now there have been
growing concern and anger in the state over the negative consequences
of IWT on state economy. Both official and public circle in the J&K state
are pleading the review of IWT, according to the requirements of the J&K
state immediately.
The water resources of Indus Basin managed between India and
Pakistan within the framework of the Indus Waters Treaty. As per the
terms and conditions of the IWT, six rivers have been taken into
consideration along with the tributaries and natural reservoirs which
were termed into “eastern and western group of rivers. The water of
three eastern rivers the Indus, Jhelum and Chenab has to go to
Pakistan whereas Water of Sutlej, Beas and Ravi are to be consumed by
India. The Eastern Rivers, whose use was exclusively given to India,
flows through well-defined legal territory which formed the part of the
Indian Union created by the partition of the British-India. While the
western rivers flowing through the disputed territory of Jammu and
Kashmir state. The IWT treaty giving exclusive rights to India over the
use of waters from eastern rivers for any purposes, but the scope of J&K
over western rivers is guided by IWT. At the time of the signing of IWT
nobody has taken care of this forgotten disputed land and people.
Subsequently the State of Jammu and Kashmir, which is mainly
effected at the benefits of the two countries, could utilize through
residual benefits of its resources to the optimum and deficits caused by
the two agreeing parties.
The IWT was a first bilateral approached to begin the relation between
two countries. Though IWT was cordially welcomed in both countries
and also protected all water rights of both parties. Subsequently the
Pakistan has built Mangla and Tarbela dams and several storage
facilities on Indus, Jhelum and Chenab rivers and India also has built
various Dams and Barrages on Sutlej, Beas and Ravi Rivers. It is
unfortunate that Srinagar, Muzaffarabad and Gilgit governments have
17 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
failed to defend the manner and extent to which the people of Jammu
and Kashmir are entitled to have a role in the use of their water
resources at Mangla (Pakistan administrative Kashmir), Salal, Dulhasti,
Uri, (Indian administrative Kashmir) and DiamirBasha Dam in Gilgit
(Pakistan has illegally made his province). Yet, India and Pakistan are
not acceding to the water and electricity requirements in both sides of
Kashmir. Also both countries are never talking about the helpless people
of Kashmir and their legitimate rights of water from their own rivers.
The Jhelum, Chenab and Indus Rivers all flow through Jammu and
Kashmir, yet under the IWT the state must seek permission from Indus
water commissioners before any economic development.
The treaty which was carried out in the best interest of both nations
has, however, deprived the Jammu and Kashmir state to use its own
water resources and thereby severely affected the developmental process
of the state. Conforming to the treaty criteria, State cannot fully exploit
the water potentialities of the Indus, Jhelum and Chenab rivers.
2. According to Kashmir Civil Society, the Salal, Uri, Dalhoste and the
Sewa II power Project are under N.H.P.C and generate 1680 MW of
electricity. The state is producing 308 MW from projects regulated and
run by the Jammu & Kashmir State Power Development Corporation
(JKSDC), falling under the state sector excluding the Baglihar project
which produces another 758 MW. The Total requirement, both domestic
and industrial, of the state is 2500 MWs Jammu and Kashmir State
Government purchase power from the N.H.P.C worth Rupees Three
Thousand Crores despite having the potential of generating 30,000 MW
Civil Society found that the power sharing and the very basis of N.H.P.C
as illegal after filling the PIL, it was revealed that there was no
agreement between N.H.P.C and the state Government because the
N.H.P.C never sought a license for setting up any of the Hydro Projects.
This, therefore, amounts to fraud and illegal occupation of land
resources of the state. Due to the corruption the misplacement of a very
important file dating back to 1975 pertaining to the agreement between
the state and the centre for execution, energy sharing and transfer of
18 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
salal power project on the chenab to J&K has prompted the Civil
Society group to approach the Court. It has found that the then
chairman of National Hydro- Electric Power Corporation (NHPC.), the
only state subject of J&K to head the corporation and the ten state
power commissioner were involved in deliberately misplacing the records
due to which the state suffered a whooping loss of well over Rs 10000
Crores the value of energy generated by Salal per annum over the years.
Due to negligence on the part of officials who were responsible for safe
maintenance of significant agreement which were lost because of which
state suffered a whooping loss of Rs 10000 Crores which is confirmed by
Minister of State for P.H.E, Flood Control and irrigation Minister, Mr. Taj
Mohi-ud-din. Mr. Taj Mohi-ud-din also confirmed that agreement had
been signed on a 50-50 partnership basis which was not implemented
and due to which the state could not get back salal in 2002 as per the
agreement.
3. Civil Society has also found that J&K Government has given away
1.20 Lac Kanal of land to Punjab for Their Dam and as per the
agreement signed with Punjab, J&K was to get 20 percent water and
power from the project. But so far Kashmir has not got a single
Megawatt of electricity and Kashmir should be compensated for the
same. Besides, power sharing with N.H.P.C and other central
Government agencies, the people of the state also regret the Indus Water
Treaty (IWT) and term it as sheer exploitation of the state’s resources for
the benefit of the people of India and Pakistan.
4. Experts believe that the I.W.T. is responsible for the present power
crisis in the state while the benefits are being reaped by both India and
Pakistan. The treaty ensures prosperity to others at the cost of the
state’s population, they argue. The treaty is purely flawed, signed by
then Indian Prime Minister Jawahir Lal Nehru and the then Pakistan
President Ayub Khan in 1960, it is a big trick played on the Jammu &
Kashmir people, Kashmiris’ in particular. The two countries are minting
money from the river of Jammu & Kashmir while the state is yet to be
properly compensated for its water resources, Prof Dost Mohammad
19 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
Khan, Dean Management studies, Baba Ghulam Shah Badshah
University (BGBU) Rajouri said. Professor A.M. Bhat, who heads the
Department of Economic at Kashmir University, feels there are other
reasons which compound the state’s power problems. He feels to realise
the full potential of power generation in Jammu and Kashmir, the state
needs an investment of US $ 20 Billion for achieving the target of
generating 20000 MW of electricity.
20 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
REVIEW OF RELATED LITERATURE:
The literature survey is the most simple and fruitful basis of formulating
precisely the research problem. For this purpose the researcher has to
review the works already done by others. The various studies came into
being and few of them are discussed here:
1. Hilal Ahmad Shah in his research titled “Role of Jammu And
Kashmir Water Resources in Indian Economy” published in Golden
Research Thoughts Volume 2, Issue. 7, Jan. 2013 highlights the role of
water resources in the development of state economy. According to him,
the economic prosperity and social well-being of a country largely
depends both directly or indirectly on its water resources. From time
immemorial the picturesque state of Jammu and Kashmir is known all
over the world for its economic prosperity.
What makes Jammu and Kashmir so special? Many things, but
especially its water resources such as snowcapped mountains,
crisscrossed by rivers and studded with lakes, springs, canals which
originate from this state, the role of water resources of Jammu and
Kashmir is very important for the development of many sectors of state
economy like agriculture, hydroelectricity, food, construction, transport,
minerals, industry etc.
2. Erin Blankenship in his research paper Kashmiri Water: Good
Enough for Peace? He suggests that, ”Kashmir is at the headwaters for
the Indus Rivers as well as the broader conflict between Pakistan and
India. Its situation is inextricable from that of its water, and its future
depends on finding an equitable, sustainable outcome for the region’s
most valuable resource. Failing to address the acute and escalating
water issues will generate increasingly dire consequences, particularly
considering the rising pressures of population growth and climate
change. Integrated water cooperation and sharing between Pakistan and
India is important enough in its own right, but perhaps finding a new
way to navigate Kashmir’s waters will provide the path to peace that the
people of Jammu Kashmir, its parent countries, and the wider
international community seek. Due to restrictions imposed on tapping of
21 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
water resources, in conjunction with faltering policies of successive state
governments, Kashmir has been unable to grow to the optimum
potential of its agriculture and electricity sectors, its most vital needs for
economic and human development. The Treaty permits building storage
aggregating 3.6 million acre feet (MAF) on the three rivers of the Indus,
Jhelum and the Chenab. This capacity is shared between hydropower,
flood moderation and general storage for non-consumptive uses. The
Treaty further permits additional irrigation of only 1.21 lakh hectares
since its effective date of April 1st, 1960. These restrictions act as a
chokehold on Kashmir’s capacity for progress. As far as irrigation goes,
while about 80 percent of Pakistan’s cultivated areas are irrigated,
Kashmir has only been able to do about 10 percent. In Pakistani
Kashmir only 13 percent of the land is under farming, but provides the
livelihood for close to 84 percent of the households. Of its enormous
hydroelectricity potential estimated at around 15,000 MW, Kashmir has
been able to harness barely 10 percent, a critical barrier to the area’s
growth. Over 90 percent of Kashmir’s capacity comes from hydroelectric
plants. There is little scope for any other forms of power generation in
the state since there are few feasible sites for plants and the area’s
difficult topography makes the transport of raw materials complicated
and costly. Further, each of the state’s power projects begun and
currently under construction has become controversial due to the
competing agendas of the parent states.[47] As India and Pakistan battle
over the legalities of the technical engineering and the Treaty details for
each proposed dam, spillway, and plant, Kashmir waits.
3. According to Erin Blankenship, Kashmir’s untapped potential
for its energy and agricultural growth represents the equally foregone
possibility for bridging important gaps in the ongoing crisis. A 2002
report “Reshaping the Agenda in Kashmir” by Waslekar comments that
the disputed territory’s potential could help to transform it “from a valley
of death and destruction to a center of excellence in…engineering.”
Other experts agree in the potential that Kashmir’s geography offers.
Amending the limitations of the Indus Waters Treaty so that sustainable
22 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
development is integrated throughout the area would greatly improve
the hydroelectricity sector’s potential, improve irrigation facilities and
regulations which would in turn boost agricultural growth, give rise to
employment opportunities, help attract private investment, and in
general pave the way for a healthy industrialization of the state.
Agreement on a joint development strategy for the Indus Waters Basin
that would implement sustainable projects would thus be a major
contribution to economic growth, which according to multiple sources is
a top priority in securing peace for the region. Other positive
developments could build from the economic growth’s impact on
stability and the water sharing and joint development structure, such as
a mutual confidence in peaceful and cooperative means of solving
disputes.[48],[49]
4. Economic Analysis of states A study of Northern & Central
states of India by PHD Research Bureau. Kashmir is at 7th rank in its
Aggregate Scores of States registering high fiscal deficits, high
unemployment and poverty and a weak social sector. Economic growth
registered is merely 4.92 while the cost of doing business 9.9 which is
highest in comparison to nine northern states, fiscal performance is also
very low, it is the second lowest after HP, yield of food grains is
satisfactory but the infrastructure is the poorest among all states,
unemployment is highest in the state as compared to nine northern
states of the country besides social sector.
State Disparity Index
A wide disparity was observed amongst the states’ aggregate scores.
While Delhi outperforms all states by far at 65.15, Haryana and Punjab
post relatively low scores at about 53. The rest of the states are within
the range of 40-50 points, while MP lags far behind at 38.34.
Only Delhi, Haryana and Punjab lie above the mean value of 47.02,
whereas J&K with 42.55 lie below the average level.
States like Delhi and Haryana have shown strong fiscal heath, while
J&K, HP and UP are poor performers in this regard. Rajasthan, J&K and
UP have posted the lowest literacy rates among the states.
23 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
5. According to the J&K State Power Development Corporation
JKSPDC the power potential of the State is estimated to be around
22,000MW, but it is far from realizing its full potential. The state has a
power potential of generating near about 30,000MW. The projects
handed over to NHPC on power sharing agreement basis are presently
completely under the control of NHPC and no consideration is being
given to the State in terms of power supply as per the earlier
agreement. In fact power generated within the State by NHPC is being
fed to the Northern Grid from where J&K is purchasing its power
requirement. The Northern grid in its turn is catering to states like
Punjab, Haryana, Delhi, Chandigarh, Utter Pradesh and Rajasthan
apart from J&K and as the mercury soars in north India, so does the
power needs of the States resulting in each state vying each other for
power. In J&K the grim power scenario is the direct result of low self-
sufficiency in power generation, transmission and generation losses and
most importantly the years of exploitation indulged by NHPC. Very
recently one of the senior ministers within the State cabinet has raised
fingers on the role of NHPC in the missing cabinet order related to Salal
power project. The cabinet subcommittee constituted by the state
government has also revealed that J&K has made an excess payment of
Rs. 2340 Crores on power purchases from Salal project. It is said that as
per the agreement between J&K government and NHPC, J&K was
entitled to 47 percent of power from Salal including 35 percent NSG at
bus bar rate (generation cost) and 12 percent of royalty cost. But the
role played by NHPC in the State of violating all norms and agreements
only proves the fact that NHPC has no legal sanctity to function in J&K.
While the government may find it easy to pass the buck for its power
woes on NHPC, it cannot absolve itself for not delivering adequately on
the power front. J&K Power Development Corporation Limited was
incorporated as Private Limited Company in 1995 to take over, execute,
complete, operate and maintain all power stations and power projects in
the State. The Corporation presently has only 20 hydroelectric projects
with installed capacity of 758.70 MW located in various districts of J&K
24 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
including 450 MW Baglihar Hydroelectric project. The State government
has yet not come out with any legislation regarding taking over the
power projects being run within the State. There is also at the same time
need to review the existing power policy to make it more investor
friendly. This is all the more essential in order to rope in greater number
of private players for investing and sharing their expertise in power
sector. It should also explore the prospects of taking up development of
power projects in the state on BOOT (Build, Own, Operate and Transfer)
basis in the manner similar to the recently awarded Rattle Hydroelectric
power project on BOOT basis through tariff based competitive bidding.
At the same time, J&K should shed the moulds of despondency
when it comes to revenue generation and power tariffs. The Committee
at the Centre headed by former Comptroller and Auditor General V. K.
Shunglu to recommend ways to reduce losses suffered by distribution
has recommended the need to take action against inactive State
Regulatory Authorities which actually set the tariff. The state of J&K
having hostile terrain already suffers from huge amount of transmission
and distribution losses. On top of it, the power tariff collection record of
the state is abysmally dismal in the country with rampant power theft
and tampering of loads. If the government is really serious about
reforms in power sector, it would have to come out with a multipronged
strategy to address all these issues. Otherwise there will be no succor
for ordinary citizens and angry citizens taking to streets to protest
against power cuts would continue to remain a common sight every
year.
6. With minor exception, the treaty, gives India exclusive rights over
the waters of the Eastern Rivers and its tributaries. Similarly Pakistan
has exclusive rights over the use of the West flowing rivers, “But where
are we (people of Jammu and Kashmir)? How much have we earned
from the treaty? It seems the two countries signed it only to engineer
their economic growth from the waters of Jammu & Kashmir,” Dost
Mohammad rules. Power generated through the power projects run by
25 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
N.H.P.C is being supplied to Punjab, Haryana, Delhi, Himachal Pradesh,
and Chandigarh and as far as Utter Pradesh and Rajasthan.
7. NAZAKAT AND NENGROO. With the rapid growth of population
in J&K from 2.5 million 1960 to 10.5 million in 2011, urbanization and
industrial revolution, electricity demand has increased in Jammu and
Kashmir State. Systematic development and utilization of power
resource, is the main importance to meet the increasing exigency of the
State. In fact the requirements of power and its availability have come to
be recognized as the surest index of a state’s overall development in big
way. As compared to hydel generation, thermal generation cannot be a
solution to meet the increasing energy needs of the states, as it is
located away from the pit heads. The increase in demand for power
means the economy is growing and is leading to modernization,
industrialization and improvement in basic amenities culminating into
quality life of the people. The State is not rich in the non-renewable
sources of fossil fuels which could be used for energy generation but
there are huge renewable sources of energy in the form of water
resources which can meet the demand of the people.
8. Economic Analysis of states a study of Northern & Central
states of India by PHD Research Bureau. The state of Jammu and
Kashmir with smallest economic size of $7.36 Billion as against 82.04$
billion in UP showing 6.28% growth and with a third lowest per capita
income of 27250 among all northern states as against Delhi Rs117,000.
Primary sector contributes 25.82% with an annual growth of 1.79%. The
state contributes 1% to India’s GSDP while Uttar Pradesh contributes
the highest among the states at 9%. The secondary sector contributes
about 28.29% to GSDP of state of Jammu and Kashmir. Tertiary sector
contributes around 46% in GSDP. The growth rate of the services sector
is 5% which is rather stagnant in state.
It is observed that services sector is an important growth driver and the
manufacturing sector is relatively stagnant while agricultural
productivity varies significantly in the state.
26 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
The composite performance of state under the parameters of Investment
Environment, Macro-economy, Agriculture, Consumer Markets, Primary
Education, Infrastructure, Governance and Primary Health. The state
has scored3.4out of 10 (10 being highest and 0 being lowest).
Scores on Socio-economic Parameters
States
Parame
ters
Invest
ment
Enviro
nment
Macro
Econo
my
Agric
ultur
e
Cons
umer
Mark
ets
Primar
y
Educa
tion
Infrast
ructur
e
Gover
nance
Prima
ry
Healt
h
Compo
site
Score
4.3 4.0 1.2 3.1 4.4 5.1 1.1 3.8 3.4
The competitiveness report ranked J&K lowest preceded by UP and
Rajasthan.
Total expenditure comprises three important parameters, viz,
Development Expenditure, Social Sector Expenditure and Capital
Outlay. J&K spends the maximum in development and social sectors
with 36.4% and 18.6% of GSDP respectively.
J&K is the most indebted state with a debt-GSDP ratio of 67% followed
by HP at 53.2% and UP at 45.8%.
NAZAKAT AND NENGROO. Though the J&K State has estimated the
total Hydel power potential of the State at 20,000 MWs, of which 16480
MWs have been identified. The harnessed hydro-electricity potential
constitutes just 7.5 percent of the assessed potential, with 92.5 percent
remaining unharnessed. The state has only managed around 2500 MW
because the treaty disallows the J&K state to construction of storage
reservoirs on three western rivers except run-of-river projects. There are
also further restrictions on the water storage level. However total
assessed power potential is on the basis or “run-of-river” schemes with
some small live storage capacity in the upper reaches of the three
western rivers. This type of projects not only raises the construction cost
of the projects but also affects adversely the cost-effectiveness of power
generation from these projects but also generation capacity is very low.
Cost of run-of-the-river projects using small head fall is reported to be
about 75 per cent higher than hydel projects using high head fall. These
high cost hydel projects generate electricity much below their installed
27 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
capacity. In addition to this, though the hydro potential of the State is
about 20,000 MW, annual energy loss works out to 60,000 million units
valuing Rs. 15,000 Crores at Rs. 2.50 per unit per year, which is
substantially less than the prevalent market rate”.
1. Chenab River is leading source of power potential (as shown in figure 2)
of J&K state but there is no effective storage on main Chenab up to
Kishtwar. Also there is no live storage on Salal project and only weekly
storage at Baglihar 0.3MAF, Dulhasti 0.007 MAF and storage of 1.1MAF
is proposed Bursar tributary of Chenab .Thus J&K state is able to
identify only 16480 MWs and out of the identified potential, only 2500
MWs have been harnessed, consisting of 758.70 MWs of J&K State
Sector from 20 power projects, 1680 MWs from three power projects
under Central Sector i.e. 690 MWs from Salal Hydel Electric Project, 480
MWs from Uri-I Hydel Electric Project, from Dulhasti 390 MWs and
17.50 MWs from two private sector projects. Fig. 1 depicts the identified
harnessed and under construction power potential by j & K and central
Government.
Fig. 1: Power Potential by J&K and Central Govt. Source: J&K State Hydroelectric Project
Development Policy 2011
The analysis of figure 1 shows that JKPDC and NHPC collectively
generating 2456.20 MWs hydro potential on three western rivers from
Jhelum, Chenab, Indus and Ravi also. It is revealed from the above
analysis that the actual power potential of Jhelum, Chenab, Indus and
28 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
Ravi are 3560, 10360, 2060 and 50 respectively. The harnessed
potential of these river basins are 750.1MWs, 1563.8MWs, 13.3MWs,
and 129 MWs respectively. The table further shows 570 MWs on
Jhelum, 450 MWs on Chenab, and 90.26 MWs on Indus are under
construction. Thus the analysis depicts that Chenab River has the
highest power potential but only 15.09 percent of it has been harnessed.
Similarly only0.0064 percent of Indus River and 21.07 percent of
Jhelum River has been harnessed.
Moreover, the main power generating projects Salal, Baglihar, Tulbul
and Kishanganga are in the state have become controversial due to the
Pakistan’s objection (as a violation of IWT). The projects end up having
long gestation periods and short working lifespan. Abrogating the Indus
Waters Treaty would provide greater benefits and open up several
avenues for unrestrained development of the state of Jammu &
Kashmir. It can:
? Improve hydro-electricity sector's potential as storage facilities could
be developed
? Pave the way for industrialization of the state
? Improve irrigation facilities which in turn would boost agricultural
growth
? Give rise to employment opportunities, which will indirectly keep a
check on external interference in state affairs
? Help attract private investments, propelling the state's position on
India's investment map.
While there is some progress in power generating sector, but shortage of
power continues to haunt the State and is becoming major constraint
for the development of inhibiting the growth of industry, agriculture and
tourism sector as well. During the past forty years, since the Indus
Treaty was signed, there has been sizeable increase in the State's
population also the standards and life style of living have changed.
Simultaneously, the State has witnessed a big leap in demand for
electricity.
29 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
Moreover the shortage of power in the state has not only been causing
problems for domestic consumption. As such there have been
fundamental changes in the ground situation, so far as the actual power
requirement of the State for domestic, agricultural and industrial uses,
is concerned. The greatest weakness is on the distribution front which
comes under the domain of the State. Aggregate Technical and
Commercial (AT&C) losses of State is about 72 percent and this had
made the PDD financially sick. In this context the State is also unable to
invest adequately in additional generation capacity as the State Power
Department is running in huge losses. Over the course of five decades,
some have suggested that the loss to the state in terms of development
of industry, power and agriculture could be nearly US$ 4.5 billion. This
loss of development is a fundamental question. If the entire power
potential of the state is to be utilized, the power generation can be run
as an industry on commercial lines and state can supply surplus power
to the entire region. Apart from IWT climate is another factor which is
hampering the state’s power potential. Being a mountainous states;
majority of rivers water are snow fed, the water discharge in different
rivers gets depleted in winter months from September to February. Thus
the installed power generation capacity goes down from 25 percent to 30
percent and state is obliged to run high cost gas based generation and
imports power from central government, northern grid.
To meet the growing demand of power the state has planned to achieve
6000 MWs electricity within next five years, to boost the industrial
sector of the state. But keep in mind presently the J&K and central
government collectively generating 2500 MWs on western rivers. Some
power projects which are already objected from Pakistan (as the
violation of IWT). Nowadays Pakistan is facing serious water and energy
crisis which are directly link with Indus Water Treaty. If J&K will try to
build more power projects or exploit more water from western rivers,
what would be the reaction of water stressed Pakistan? The result may
be armed conflict between India and Pakistan. Before turning into
conflict both countries again revisit the existed agreement.
30 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
Fig. 2: Jammu & Kashmir’s Energy Shortfalls (MUs).
Source: Economic Survey of J&K 2011-12
At other side J&K experienced increasing electricity shortages in terms
of peak demand each year from 2000 to halfway through 2003, resulting
in electricity shortages of between (11 and 16 percent and J&K’s power
generating capacity of 940 MW is far short of the 1169 MW peak
demand in 2002–2003. Moreover it is estimated that the state’s power
demand is likely to be increase 2,600 MW in 2012–13 and 5,500 MW by
2025–26. At these figures average shortage is 13800MU per year.
The energy shortfall in various years in J&K state is shown in figure 2.
The figure shows that from 2006-07 to 2010-11the actual demand has
increased from 11343 MUs to 16544 MUs respectively. The power
availability from J&K PDC and free received from NHPC has increased
from 1717.64 MUs to 3379.692 MUs over the years. Furthermore the
power shortfall has also been increased at an alarming rate. It means
both the market forces are growing at an increasing rate, resulting in
the continuous positive gap between the two.
As there is an increasing demand for power in J&K state. The
state has purchased power rest of the state especially from northern grid
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of central government. The power purchased from outside of the state by
J&K state in various years is shown in figure 3. The figure shows that
except in 2007-08 there was continuous increased in the power
purchased from 1999-00t0 2008-09 and it has almost doubled over the
years. It means that J&K has to pay a huge amount for power
purchasing from other state. Has the state been allowed to utilize its
water resources freely, the state could have been able to produce the
increased amount of electricity within the state and the huge amount of
money which it has to pay for purchasing the power outside the state
could have been invested for other developmental purposes resulting in
overall growth of the J&K state economy. Also because of its abundant
water resources it could have been able to generate surplus electricity
which it can export to neighboring states, resulting additional revenue
to the state.
The growth in power demand inadequate capacity addition has resulted
in power shortages which are affecting all the economic sectors.
Furthermore, power shortage is becoming a source of conflict and
instability especially during winter season in the state. It is easy to
understand in 2012 January, when a young man has lost his life and
two others injured when CISF personnel opened fire on Monday to
disperse the protesters agitated over power shortage in Boniyar area of
Baramulla district in the Kashmir Valley. Therefore, the core of the
Kashmiri discourse on the shortage of power is the distribution of water
resources that was agreed to between India and Pakistan through the
instrumentality of the Indus Water Treaty (1960).
Albeit, three main river basins of the state include Indus and its
tributaries, Jhelum and its tributaries, Chenab and its tributaries offer
great scope for generation of power through Hydroelectric plant. Since
power and water has become an intensive need for industrialization and
hence development, if some kind of raw material is available for
exploitation, it should to be utilized fully. Then optimal exploitation of
the available resources of the State would meet the State’s demand and
also will boost the overall economy of the state. Also estimated power
32 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
potential of the state is helpful to bring peace and stability in the
ongoing crisis in J&K State. As 2002 report “Reshaping the Agenda in
Kashmir” by Waslekar comments that the disputed territory’s potential
could help to transform it “from a valley of death and destruction to a
center of excellence in…engineering.
33 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
PROBLEM STATEMENT
This project is going to analyse the fiscal potential of hydro power
projects of Kashmir and analyze whether the hydro-electric projects will
have any significant impact on state economy which faces the
challenges of underdevelopment and unemployment. The research will
also analyse the impact of revenue on per capita income by relating it to
the state economic growth and development.
34 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
OBJECTIVES
1. To verify the total cost of all new hydro-power projects of Jammu and
Kashmir.
2. To analyse various model project and determine cost associated with
them.
3. To find out the revenue generation capacity by all projects.
4. To analyse the impact of projects developed by the state and the
central authorities
5. To analyse the impact of revenue on the economic growth and
development.
6. To ascertain the impact of electricity generated on industries.
7. To determine the standard of living of state subjects.
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RESEARCH METHODOLOGY
The area selected for the study is Jammu and Kashmir. The
subject selected for the study is Fiscal potential of Hydro-power Projects
of Jammu and Kashmir. The study is an empirical study based on the
collection of relevant primary and secondary data. Efforts were made to
arrive at the logical conclusions that are very much closest to reality.
Primary data was collected from various authorities, experts, officials
and Kashmir civil society members through direct personal interview.
The major sources of secondary data used in the study was collected
from various annual reports, statistical reports, annual budgets,
published documents of government and non-government organizations,
Plan documents, Economic Surveys etc. not only this but also the data
was collected from various magazines, journals, newspapers and the
internet.
Data analysis:
The data collected for the study is properly compiled and tabulated and
put to test through various statistical tools like measures of central
tendency like mean, median. Use of percentages and correlation
analysis is also be used to draw logical inferences from the data
collected.
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SCOPE OF STUDY:
The study covers all existing hydro power projects of Kashmir and all
upcoming projects in the valley, there are various stake holders like
Kashmir government, Kashmir civil society, various experts’ social
thinkers and researchers. The study will be spreading over a large
number of institutions and officials. This acts as a guide for future
researches.
Limitations:
? Time: The time for this study is limited.
? Problem of accessibility: It would be very difficult in approaching the
executives or the guests, as they would be busy, despite prior
appointments; they may be inaccessible at times being engaged
elsewhere.
37 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
EXPECTED CONTRIBUTION OF THE STUDY
This study is going to analyse the fiscal potential of all hydro
power projects of the state and look into the case of Kashmir’s
underdevelopment and analyze whether the hydroelectric projects would
be able to help the socio-economic growth and development of the state.
The study is intended to study the relationship between
hydroelectric projects and the development of indigenous industry,
micro, small and medium industries and major services like tourism,
transport, communication, banking, insurance, entertainment,
education and health and their role on the overall economic
development of the state of Jammu and Kashmir besides impact on per
capita income and living standards of people. The study will help in
capital budgeting decisions as it will provide insight into a model project
which will facilitate financial decision making in this regard. The study
shall also extend to an appraisal of the export potential of the State to
provide various services across the boundaries of the state and also
across the boundaries of the country. This study will also throw the light
on the contribution of various services on the state domestic product of
the state. The research is intended to highlight the problems that the
hydro sector of the state is confronted with and will also throw light on
the future growth prospects of the service sector in the state of Jammu
and Kashmir.
38 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
CLASSIFICATION OF POWER PROJECTS
Model of 1 MW Hydroelectric power project
Water power can be harnessed in many ways; tidal flows can be utilised
to produce power by building a barrage across an estuary and releasing
water in a controlled manner through a turbine; large dams hold water
which can be used to provide large quantities of electricity; wave power
is also harnessed in various ways. It is a technology that has been
utilised throughout the world, by a diverse range of societies and
cultures, for many centuries. Water can be harnessed on a large or a
small scale - Table 1, below outlines the categories used to define the
power output from hydropower. Micro-hydro power is the small-scale
harnessing of energy from falling water; for example, harnessing enough
water from a local river to power a small factory or village. This fact
sheet will concentrate mainly at micro-hydro power.
Large- hydro More than 100 MW and usually feeding into a
large electricity grid
Medium-
hydro
15 - 100 MW - usually feeding a grid
Small-hydro 1 - 15 MW - usually feeding into a grid
Mini-hydro Above 100 kW, but below 1 MW; either
stand-alone schemes or more often feeding
into the grid
Micro-hydro From 5kW up to 100 kW; usually provided
power for a small community or rural
industry in remote areas away from the grid.
Pico-hydro From a few hundred watts up to 5kW
39 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
Classification of hydropower by size.
KW (kilowatt) - 1000 Watts; MW (megawatt) - 1 000,000 Watts or 1000
kW
In the UK, water mills are known to have been in use 900 years ago.
Their numbers grew steadily and by the 19th century, there were over
20,000 in operation in England alone. In Europe, Asia and parts of
Africa, water wheels were used to drive a variety of industrial machinery,
such as mills and pumps. The first effective water turbines appeared in
the mid-19th century and it was not long before they were replacing
water wheels in many applications. In contrast to water wheels and the
early turbines, modern turbines are compact, highly efficient and
capable of turning at very high speed. Hydropower is a well-proven
technology, relying on a non-polluting, renewable and indigenous
resource, which can integrate easily with irrigation and water supply
projects. China alone has more than 85,000 small-scale, electricity
producing, hydropower plants. Over the last few decades, there has
been a growing realisation in developing countries that micro-hydro
schemes have an important role to play in the economic development of
remote rural areas, especially mountainous ones. Micro-hydro schemes
can provide power for industrial, agricultural and domestic uses
through direct mechanical power or by the coupling of the turbine to a
generator to produce electricity.
Micro-hydro power
Small-scale hydropower systems are those that generate less than 30
MW of electricity. They can be installed in small rivers or streams with
little or no discernable environmental effect on things such as fish
migration. All hydropower systems use the energy in flowing water to
produce electricity or mechanical energy. In small-scale hydropower,
run-of-the-river systems, which do not require large storage reservoirs,
are often used. For run-of-the-river systems, a portion of the river’s
water is diverted to a water conveyance, such as a channel or pipeline,
which delivers the water to a waterwheel or turbine. The moving water
rotates the wheel, which spins a shaft. The motion of the shaft produces
electricity, which can then be used directly or fed into the grid. Small-
scale hydro plants producing less than 30 MW of power are often
considered renewable Sources of electricity. Hydropower is a renewable
resource because it uses the continuous flow of rivers and streams to
40 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
produce electricity without using up the water resource. It is also a
clean technology because it does not rely on the burning of fuels like oil,
coal, or natural gas to produce power. There are different types of small-
scale hydropower developments. Micro-hydro has a power output of 100
kW or less, and is typically used to supply electricity on a residential
scale, for one or two houses. Mini-hydro has a power output of 100 kW
to 1 MW, and is typically used for a small factory or isolated community.
Small-scale hydropower is used for regional supply into a grid, and
produces 1 MW to 30 MW of power. Maintenance costs are generally
minimal; however production costs for a small-scale hydropower project
can vary, based on site conditions. A sufficient quantity of falling water
must be available in order to make this economically feasible. This
usually means that hilly or mountainous sites are best. To determine
the amount of power available at the site, one would need to determine
the “head” and “flow” of the water source. Head is the vertical the head
the better because one needs less water to produce a given amount of
power, and smaller, less expensive equipment can be used. Flow is the
quantity of water falling, usually determined in gallons per minute. A
higher flow rate can produce more electricity, and therefore be more
economically viable over many years. Most of the environmental impacts
of small-scale hydro developments can be avoided in part or in whole by
a good design and appropriate construction and operating practices.
Small scale hydropower developments do not take up much space and
rarely cause significant shoreline flooding or required river diversions.
Project design
Many companies offer standardized turbine generator packages in the
approximate size range of 200 kW to 10 MW. These "water to wire"
packages simplify the planning and development of the site since one
vendor looks after most of the equipment supply. Since non-recurring
engineering costs are minimized and development cost is spread over
multiple units, the cost of such systems is improved. While synchronous
generators capable of isolated plant operation are often used, small
41 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
hydro plants connected to an electrical grid system can use economical
induction generators to further reduce installation cost and simplify
control and operation. Micro-hydro plants may use purpose-designed
turbines or use industrial centrifugal pumps, connected in reverse to act
as turbines. While these machines rarely have optimum hydraulic
characteristics when operated as turbines, their low purchase cost
makes them attractive for micro-hydro class installations. Regulation of
small hydro generating units may require diversion of water around the
turbine, since the project may have no reservoir to store unused water.
For micro-hydro schemes feeding only a few loads, a resistor bank may
be used to dissipate electrical energy as heat during periods of low
demand. In a sense this energy is wasted but the incremental fuel cost
is negligible so there is little economic loss. Since small hydro projects
usually have minimal environmental and licensing procedures, and
since the equipment is usually in serial production, standardized and
simplified, and since the civil works construction is also small, small
hydro projects may be developed very rapidly. The physically small size
of equipment makes it easier to transport to remote areas without good
road or rail access. Micro-hydro installations can also provide multiple
uses. For instance, micro-hydro projects in rural Asia have incorporated
agro-processing facilities such as rice mills - alongside standard
electrification - into the project design.
SCHEME COMPONENTS
Figure 1 shows the main components of a run-of-the-river micro-hydro
scheme. This type of scheme requires no water storage but instead
diverts some of the water from the river which is channeled along the
side of a valley before being 'dropped' into the turbine via a penstock. In
figure 1, the turbine drives a generator that provides electricity for a
workshop. The transmission line can be extended to a local village to
supply domestic power for lighting and other uses.
42 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
Figure 1: Layout of a typical micro hydro scheme
Description of Small Hydro Power Plants
A small hydro generating station can be described under two main
headings: civil works.
And electrical and mechanical equipment.
1. Civil works
The main civil works of a small hydro development are the diversion
dam or weir, the water passages and the powerhouse. The diversion
dam or weir directs the water into a canal, tunnel, penstock or turbine
inlet. The water then passes through the turbine, spinning it with
enough force to create electricity in a generator. The water then flows
back into the river via a tailrace. Generally, small hydro projects built
for application at an isolated area are run-of-river developments,
meaning that water is not stored in a reservoir and is used only as it is
available. The cost of large water storage dams cannot normally be
justified for small waterpower projects and consequently, a low dam or
diversion weir of the simplest construction is normally used.
Construction can be of concrete, wood, masonry or a combination of
these materials. Considerable effort continues to be spent to lower the
cost of dams and weirs for small hydro projects, as the cost of this item
alone frequently renders a project not financially viable.
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Small Hydro Background
The water passages of a small hydro project comprise the following:-
An intake which includes trash racks, a gate and an entrance to a
canal and penstock or directly to the turbine depending on the type of
development. The intake is generally built of reinforced concrete, the
trash rack of steel, and the gate of wood or steel. A canal, tunnel and/or
penstock, which carries the water to the powerhouse in developments
where the powerhouse is located at a distance downstream from the
intake. Canals are generally excavated and follow the contours of the
existing terrain. Tunnels are underground and excavated by drilling and
blasting or by using a tunnel-boring machine. Penstocks, which convey
water under pressure, can be made of steel, iron, fiberglass, plastics,
concrete or wood. The entrance and exit of the turbine, which include
the valves and gates necessary to shut off flow to the turbine for
shutdown and maintenance. These components are generally made of
steel or iron. Gates downstream of the turbine, if required for
maintenance, can be made of wood.
2. Electrical and mechanical equipments
The primary electrical and mechanical components of a small hydro
plant are the turbine(s) and generator(s).
A number of different types of turbines have been designed to
cover the broad range of hydropower site conditions found around the
world. Turbines used for small hydro applications are scaled-down
versions of turbines used in conventional large hydro developments.
Turbines used for low to medium head applications are usually of the
reaction type and include Francis and fixed and variable pitch (Kaplan)
propeller turbines. The runner or turbine “wheel” of a reaction turbine is
completely submersed in water. Turbines used for high-head
applications are generally referred to as impulse turbines. Impulse
turbines include the Pelton, Turgo and cross flow designs. The runner of
an impulse turbine spins in the air and is driven by a high-speed jet of
44 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
water. Small hydro turbines can attain efficiencies of about 90%. Care
must be given to selecting the preferred turbine design for each
application as some turbines only operate efficiently over a limited flow
range (e.g. propeller turbines with fixed blades and Francis turbines).
For mostrun-of-river small hydro sites where flows vary considerably,
turbines that operate efficiently over a wide flow range are usually
preferred (e.g. Kaplan, Pelton, Turgo and cross flow designs).
Alternatively, multiple turbines that operate within limited flow
ranges can be used. There are two basic types of generators used in
small hydro plants - synchronous or induction (asynchronous). A
synchronous generator can be operated in isolation while an induction
generator must normally be operated in conjunction with other
generators. Synchronous generators are used as the primary source of
power produced by utilities and for isolated diesel-grid and stand-alone
small hydro applications. Induction generators with interconnection or
transmission and distribution system.
Turbines
A turbine converts the energy in falling water into shaft power. There are
various types of turbine which can be categorised in one of several ways.
The choice of turbine will depend mainly on the pressure head available
and the design flow for the proposed hydropower installation. As shown
in table 2 below, turbines are broadly divided into three groups; high,
medium and low head, and into two categories: impulse and reaction.
The difference between impulse and reaction can be explained simply by
stating that the impulse turbines convert the kinetic energy of a jet of
water in air into movement by striking turbine buckets or blades - there
is no pressure reduction as the water pressure is atmospheric on both
sides of the impeller. The blades of a reaction turbine, on the other
hand, are totally immersed in the flow of water, and the angular as well
as linear momentum of the water is converted into shaft power - the
pressure of water leaving the runner is reduced to atmospheric or lower.
45 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
CLASSIFICATION OF TURBINE TYPES.
1. Kaplan (reaction turbine)
The Kaplan turbine is a propeller-type water turbine which has
adjustable blades. It was developed in 1913 by the Austrian
professor Viktor Kaplan, who combined automatically adjusted propeller
blades with automatically adjusted wicket gates to achieve efficiency
over a wide range of flow and level. The Kaplan turbine was an evolution
of the Francis turbine. Its invention allowed efficient power production
in low-head applications that was not possible with Francis turbines.
The head ranges from 10-70 meters and the output from 5 to 120 MW.
Runner diameters are between 2 and 8 meters. The range of the turbine
is from 79 to 429 rpm. Kaplan turbines are now widely used throughout
the world in high-flow, low-head power production.
Theory of operation
The Kaplan turbine is an inward flow reaction turbine, which means
that the working fluid changes pressure as it moves through the turbine
and gives up its energy. Power is recovered from both the hydrostatic
head and from the kinetic energy of the flowing water. The design
combines features of radial and axial turbines. The inlet is a scroll-
shaped tube that wraps around the turbine's wicket gate. Water is
directed tangentially through the wicket gate and spirals on to a
propeller shaped runner, causing it to spin. The outlet is a specially
shaped draft tube that helps decelerate the water and recover energy. The
turbine does not need to be at the lowest point of water flow as long as
the draft tube remains full of water. A higher turbine location, however,
increases the suction that is imparted on the turbine blades by the draft
tube. The resulting pressure drop may lead to cavitation. Variable
geometry of the wicket gate and turbine blades allow efficient operation
for a range of flow conditions. Kaplan turbine efficiencies are typically
over 90%, but may be lower in very low head applications. Current areas
of research include CFD driven efficiency improvements and new
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designs that raise survival rates of fish passing through. Because the
propeller blades are rotated by high-pressure hydraulic oil, a critical
element of Kaplan design is to maintain a positive seal to prevent
emission of oil into the waterway. Discharge of oil into rivers is not
permitted.
2. Francis turbine
The Francis turbine is a type of water turbine that was developed
by James B. Francis in Lowell, Massachusetts. It is an inward-
flow reaction turbine that combines radial and axial flow concepts.
Francis turbines are the most common water turbine in use today. They
operate in a head range of 10 to 650 meters (33 to 2,133 feet) and are
primarily used for electrical power production. The power output
generally ranges from 10 to 750 megawatts, though mini-hydro
installations may be lower. Runner diameters are between 1 and 10
meters (3 and 33 feet). The speed range of the turbine is from 83 to
1000 rpm. Medium size and larger Francis turbines are most often
arranged with a vertical shaft. Vertical shaft may also be used for small
size turbines, but normally they have horizontal shaft.
3. Propeller turbine
A type of reaction turbine with a propeller-style runner. Water passes
through the runner and drives the propeller blades. Propeller turbines
can be used from 2 to 300 feet of head, and can be as large as 100
megawatts.
4. Pelton (impulse turbine)
The Pelton wheel is a water impulse turbine. It was invented by Lester
Allan Pelton in the 1870s. The Pelton wheel extracts energy from
the impulse of moving water, as opposed to its weight like traditional
overshot water wheel. Although many variations of impulse turbines
existed prior to Pelton's design, they were less efficient than Pelton's
design; the water leaving these wheels typically still had high speed, and
carried away much of the energy. Pelton's paddle geometry was designed
so that when the rim runs at ½ the speed of the water jet, the water
47 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
leaves the wheel with very little speed, extracting almost all of its energy,
and allowing for a very efficient turbine.
Function
The water flows along the tangent to the path of the runner. Nozzles
direct forceful streams of water against a series of spoon-shaped
buckets mounted around the edge of a wheel. As water flows into the
bucket, the direction of the water velocity changes to follow the contour
of the bucket. When the water-jet contacts the bucket, the water exerts
pressure on the bucket and the water is decelerated as it does a "u-turn"
and flows out the other side of the bucket at low velocity. In the process,
the water's momentum is transferred to the turbine. This "impulse"
does work on the turbine. For maximum power and efficiency, the
turbine system is designed such that the water-jet velocity is twice the
velocity of the bucket. A very small percentage of the water's
original kinetic energy will still remain in the water; however, this allows
the bucket to be emptied at the same rate it is filled, (see conservation of
mass), thus allowing the water flow to continue uninterrupted. Often
two buckets are mounted side-by-side, thus splitting the water jet in
half (see photo). This balances the side-load forces on the wheel, and
helps to ensure smooth, efficient momentum transfer of the fluid jet to
the turbine wheel. Because water and most liquids are nearly
incompressible, almost all of the available energy is extracted in the first
stage of the hydraulic turbine. Therefore, Pelton wheels have only one
turbine stage, unlike gas turbines that operate with compressible fluid.
4. Turgo (impulse turbine)
The Turgo turbine is an impulse water turbine designed for
medium head applications. Operational Turgo Turbines achieve
efficiencies of about 87%. In factory and lab tests Turgo Turbines
perform with efficiencies of up to 90%. It works with net heads between
15 and 300 m. Developed in 1919 by Gilkes as a modification of
the Pelton wheel, the Turgo has some advantages over Francis and
Pelton designs for certain applications. First, the runner is less
48 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
expensive to make than a Pelton wheel. Second, it doesn't need an
airtight housing like the Francis. Third, it has higher specific speed and
can handle a greater flow than the same diameter Pelton wheel, leading
to reduced generator and installation cost.Turgos operate in a head
range where the Francis and Pelton overlap. While many large Turgo
installations exist, they are also popular for small hydro where low cost
is very important. Like all turbines with nozzles, blockage by debris
must be prevented for effective operation.
Theory of operation The Turgo turbine is an impulse type
turbine; water does not change pressure as it moves through the turbine
blades. The water’s potential is converted to kinetic energy with a nozzle.
The high speed water jet is then directed on the turbine blades which
deflect and reverse the flow. The resulting impulse spins the turbine
runner, imparting energy to the turbine shaft. Water exits with very little
energy. Turgo runners are extremely efficient. ATurgo runner looks like
a Pelton runner split in half. For the same power, the Turgo runner is
one half the diameter of the Pelton runner, and so twice the specific
speed. The Turgo can handle a greater water flow than the Pelton
because exiting water doesn't interfere with adjacent buckets. The
specific speed of Turgo runners is between the Francis and Pelton.
Single or multiple nozzles can be used. Increasing the number of jets
increases the specific speed of the runner by the square root of the
number of jets (four jets yield twice the specific speed of one jet on the
same turbine).
5. Cross-flow (generally classified as an impulse turbine).
A cross-flow turbine, Banki-Michell turbine, or Ossberger turbine is
a water turbine developed by the Australian Anthony Michell, the
Hungarian DonátBánki and the German Fritz Ossberger. Michell
obtained patents for his turbine design in 1903, and the manufacturing
company Weymouth made it for many years. Ossberger's first patent
was granted in 1933 ("Free Jet Turbine" 1922, Imperial Patent No.
361593 and the "Cross Flow Turbine" 1933, Imperial Patent No.
49 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
615445), and he manufactured this turbine as a standard product.
Today, the company founded by Ossberger is the leading manufacturer
of this type of turbine. Unlike most water turbines, which have axial or
radial flows, in a cross-flow turbine the water passes through the
turbine transversely, or across the turbine blades. As with a water
wheel, the water is admitted at the turbine's edge. After passing the
runner, it leaves on the opposite side. Going through the runner twice
provides additional efficiency. When the water leaves the runner, it also
helps clean the runner of small debris and pollution. The cross-flow
turbine is a low-speed machine that is well suited for locations with a
low head but high flow. Although the illustration shows one nozzle for
simplicity, most practical cross-flow turbines have two, arranged so that
the water flows do not interfere. Cross-flow turbines are often
constructed as two turbines of different capacity that share the same
shaft. The turbine wheels are the same diameter, but different lengths to
handle different volumes at the same pressure. The subdivided wheels
are usually built with volumes in ratios of 1:2. The subdivided
regulating unit, the guide vane system in the turbine's upstream
section, provides flexible operation, with 33, 66 or 100% output,
depending on the flow. Low operating costs are obtained with the
turbine's relatively simple construction.
SMALL HYDRO PROJECT DEVELOPMENT
The development of small hydro projects typically takes from 2 to 5
years to complete, from conception to final commissioning. This time is
required to undertake studies and design work, to receive the necessary
approvals and to construct the project. Once constructed, small hydro
plants require little maintenance over their useful life, which can be well
over 50 years. Normally, one part-time operator can easily handle
operation and routine maintenance of a small hydro plant, with periodic
maintenance of the larger components of a plant usually requiring help
from outside contractors. The technical and financial viability of each
potential small hydro project are very site specific. Power output
depends on the available water (flow) and head (drop in elevation). The
50 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
amount of energy that can be generated depends on the quantity of
water available and the variability of flow throughout the year. The
economics of a site depends on the power (capacity) and the energy that
a project can produce, whether or not the energy can be sold, and the
price paid for the energy. In an isolated area (off-grid and isolated-grid
applications) the value of energy generated for consumption is generally
significantly more than for systems that are connected to a central-grid.
However, isolated areas may not be able to use all the available energy
from the small hydro plant and, may be unable to use the energy when
it is available because of seasonal variations in water flow and energy
consumption. A conservative, rule-of-thumb” relationship is that power
for a hydro project is equal to seven times the product of the flow (Q)
and gross head (H) at the site (P = 7QH). Producing 1 kW of power at a
site with 100 m of head will require one-tenth the flow of water that a
site with 10 m of head would require. The hydro turbine size depends
primarily on the flow of water it has to accommodate. Thus, the
generating equipment for higher-head, lower-flow installations is
generally less expensive than for lower-head, higher-flow plants. The
same cannot necessarily be said for the civil works components of a
project which are related much more to the local topography and
physical nature of a site.
TYPES OF SMALL HYDRO DEVELOPMENTS
Small hydro projects can generally be categorized as either “run-of-river
developments” or “water storage (reservoir) developments”, which are
described in more detail below.
Run-of-river developments
Run-of-river” refers to a mode of operation in which the hydro plant
uses only the water that is available in the natural flow of the river.
Run-of-river” implies that there is no water storage and that power
fluctuates with the stream flow. The power output of run-of-river small
hydro plants fluctuates with the hydrologic cycle, so they are often best
suited to provide energy to a larger electricity system. Individually, they
do not generally provide much firm capacity. Therefore, isolated areas
51 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
that use small hydro resources often require supplemental power. A
run-of-river plant can only supply all of the electrical needs of an
isolated area or industry if the minimum flow in the river is sufficient to
meet the load’s peak power requirements. Run-of-river small hydro can
involve diversion of the flow in a river. Diversion is often required to take
advantage of the drop in elevation that occurs over a distance in the
river. Diversion projects reduce the flow in the river between the intake
and the powerhouse. A diversion weir or small dam is usually required
to divert the flow into the intake.
Water storage (reservoir) developments
For a hydroelectric plant to provide power on demand, either to meet a
fluctuating load or to provide peak power, water must be stored in one
or more reservoirs. Unless a natural lake can be tapped, providing
storage usually requires the construction of a dam or dams and the
creation of new lakes. This impacts the local environment in both
negative and positive ways, although the scale of development often
magnifies the negative impacts. This often presents a conflict, as larger
hydro projects are attractive because they can provide “stored” power
during peak demand periods. Due to the economies of scale and the
complex approval process, storage schemes tend to be relatively large in
size. The creation of new storage reservoirs for small hydro plants is
generally not financially viable except, possibly, at isolated locations
where the value of energy is very high. Storage at a small hydro plant, if
any, is generally limited to small volumes of water in a new head pond
or existing lake upstream of an existing dam. Pondage is the term used
to describe small volumes of water storage. Pondage can provide benefits
to small hydro plants in the form of increased energy production and/or
increased revenue. Another type of water storage development is
“pumped storage” where water is “recycled between downstream and
upstream storage reservoirs. Water is passed through turbines to
generate power during peak periods and pumped back to the upper
reservoir during off-peak periods. The economics of pumped storage
52 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
projects depends on the difference between the values of peak and off-
peak power. Due to the inefficiencies involved in pumping versus
generating, the recycling of water results in a net consumption of
energy. Energy used to pump water has to be generated by other
sources.
The environmental impacts that can be associated with small
hydro developments can vary significantly depending on the location
and configuration of the project. The effects on the environment of
developing a run-of-river small hydro plant at an existing dam are
generally minor and similar to those related to the expansion of an
existing facility. Development of a run-of-river small hydro plant at an
undeveloped site can pose additional environmental impacts. A small
dam or diversion weir is usually required. The most economical
development scheme might involve flooding some rapids upstream of the
new small dam or weir. The environmental impacts that can be
associated with hydroelectric developments that incorporate water
storage (typically larger in size) are mainly related to the creation of a
water storage reservoir. The creation of a reservoir involves the
construction of a relatively large dam, or the use of an existing lake to
impound water. The creation of a new reservoir with a dam involves the
flooding of land upstream of the dam. The use of water stored in the
reservoir behind a dam or in a lake results in the fluctuation of water
levels and flows in the river downstream. A rigorous environmental
assessment is typically required for any project involving water storage.
Load factor
The load factor is the amount of power used divided by the amount of
power that is available if the turbine were to be used continuously.
Unlike technologies relying on costly fuel sources, the 'fuel' for
hydropower generation is free and therefore the plant becomes more
cost effective if run for a high percentage of the time. If the turbine is
only used for domestic lighting in the evenings then the plant factor will
be very low. If the turbine provides power for rural industry during the
day, meets domestic demand during the evening, and maybe pumps
53 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
water for irrigation in the evening, then the plant factor will be high. It is
very important to ensure a high plant factor if the scheme is to be cost
effective and this should be taken into account during the planning
stage. Many schemes use a 'dump' load (in conjunction with an
electronic load controller - see below), which is effectively a low priority
energy demand that can accept surplus energy when an excess is
produced e.g. water heating, storage heaters or storage cookers.
Water into watts
To determine the power potential of the water flowing in a river or
stream it is necessary to determine both the flow rate of the water and
the head through which the water can be made to fall. The flow rate is
the quantity of water flowing past a point in a given time. Typical flow
rate units are liters per second or cubic meters per second. The head is
the vertical height, in meters, from the turbine up to the point where the
water enters the intake pipe or penstock.
The potential power can be calculated as follows:
Theoretical power (P) = Flow rate (Q) x Head (H) x Gravity (g) (G= 9.81
m/s
2
). When Q is in cubic meters per second, H in meters and g = 9.81
m/s
2
) then, P = 9.81 x Q x H (kW)
However, energy is always lost when it is converted from one form to
another. Small water turbines rarely have efficiencies better than 80%.
Power will also be lost in the pipe carrying the water to the turbine, due
to frictional losses. By careful design, this loss can be reduced to only a
small percentage. A rough guide used for small systems of a few kW
rating is to take the overall efficiency as approximately 50%. Thus, the
theoretical power must be multiplied by 0.50 for a more realistic figure.
Example: A turbine generator set operating at a head of 10 meters with
flow of 0.3 cubic meters per second will deliver approximately, (9.81 x 0.5
x 0.3 x 10 =) 15 kilowatts of electricity.
If a machine is operated under
conditions other than full-load or full-flow then other significant
inefficiencies must be considered. Part flow and part load characteristics
54 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
of the equipment need to be known to assess the performance under
these conditions. It is always preferable to run all equipment at the
rated design flow and load conditions, but it is not always practical or
possible where river flow fluctuates throughout the year or where daily
load patterns vary considerably. Depending on the end user
requirements of the generated power, the output from the turbine shaft
can be used directly as mechanical power or the turbine can be
connected to an electrical generator to produce electricity. For many
rural industrial applications shaft power is suitable (for food processing
such as milling or oil extraction, sawmill, carpentry workshop, small
scale mining equipment, etc.), but many applications require conversion
to electrical power. For domestic applications electricity is preferred.
This can be provided either:
• directly to the home via a small electrical distribution system or,
• can be supplied by means of batteries which are returned
periodically to the power house for recharging - this system is common
where the cost of direct electrification is prohibitive due to scattered
housing (and hence an expensive distribution system),
Where a generator is used alternating current (a.c.) electricity is
normally produced. Single phase power is satisfactory on small
installations up to 20kW, but beyond this, 3-phase power is used to
reduce transmission losses and to be suitable for larger electric motors.
An a.c. power supply must be maintained at a constant 50 or 60
cycles/second for the reliable operation of any electrical equipment
using the supply. This frequency is determined by the speed of the
turbine which must be very accurately governed.
Suitable conditions for micro-hydro power.
The best geographical areas for exploiting small-scale hydro power are
those where there are steep rivers flowing all year round, for example,
the hill areas of countries with high year-round rainfall, or the great
mountain ranges and their foothills, like the Andes and the Himalayas.
55 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
Islands with moist marine climates, such as the Caribbean Islands, the
Philippines and Indonesia are also suitable. Low-head turbines have
been developed for small-scale exploitation of rivers where there is a
small head but sufficient flow to provide adequate power. To assess the
suitability of a potential site, the hydrology of the site needs to be known
and asite survey carried out, to determine actual flow and head data.
Hydrological information can be obtained from the meteorology or
irrigation department usually run by the national government. This data
gives a good overall picture of annual rain patterns and likely
fluctuations in precipitation and, therefore, flow patterns. The site
survey gives more detailed information of the site conditions to allow
power calculation to be done and design work to begin. Flow data
should be gathered over a period of at least one full year where possible,
so as to ascertain the fluctuation in river flow over the various seasons.
There are many methods for carrying out flow and head measurements
and these can be found in the relevant texts.
The Environmental Impact.
Unlike traditional power stations that use fossil fuels, micro-hydro
generators have practically no effect on the environment. And because
they don’t depend on dams to store and direct water, they’re also better
for the environment than large-scale hydro-electric stations.In fact, by
reducing the need to cut down trees for firewood and increasing farming
efficiency, micro-hydro has a positive effect on the local environment.
The power to recharge communities
Micro-hydro power can also be supplied to villages via portable
rechargeable batteries. People can use these convenient sources of
electricity to fuel anything from workshop machines to domestic lighting
– and there are no expensive connection costs. The batteries are charged
at a station in the village, thus providing the local community with a
clean, renewable source of power. For industrial use, the output from
the turbine shaft can be used directly as mechanical power, as opposed
to converting it into electricity via a generator or batteries. This is
suitable for agro-processing activities such as milling, oil extraction and
56 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
carpentry. Micro-hydro schemes are owned and operated by the
communities they serve, with any maintenance carried out by skilled
members of that community. So they provide employment in
themselves, as well as providing the power to re-energise entire
communities.
What does it cost?
Costs are different for every case, and it is impossible to give an
accurate figure without knowing the specifics of the site. From the
experience, the cost varies from approximately 8 to 10 Crore rupees per
MW, when using appropriate technologies, which are much cheaper
than using conventional approaches and technologies.
Other issues
The economics - cost reduction
Normally, small-scale hydro installations in rural areas of developing
countries can offer considerable financial benefits to the communities
served, particularly where careful planning identifies income-generating
uses for the power. The major cost of a scheme is for site preparation
and the capital cost of equipment. In general, unit cost decreases with a
larger plant and with high heads of water. It could be argued that small-
scale hydro technology does not bring with it the advantages of
'economy of scale', but many costs normally associated with larger
hydro schemes have been 'designed out' or 'planned out' of micro hydro
systems to bring the unit cost in line with bigger schemes. This includes
such innovations as:
• using run-of-the-river schemes where possible - this does away
with the cost of an expensive dam for water storage
• locally manufactured equipment where possible and appropriate
• use of HDPE (plastic) penstocks where appropriate
• Electronic load controller- allows the power plant to be left
unattended, thereby reducing labour costs, and introduces useful
57 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
by-products such as battery charging or water heating as dump
loads for surplus power; also does away with bulky and expensive
mechanical control gear.
• using existing infrastructure, for example, a canal which serves
an irrigation scheme
• sitting of power close to village to avoid expensive high voltage
distribution equipment such as transformers
• using pumps as turbines (PAT) - in some circumstances standard
pumps can be used 'in reverse' as turbines; this reduces costs,
delivery time, and makes for simple installation and maintenance
• using motors as generators - as with the PAT idea, motors can be
run 'in reverse' and used as generators; pumps are usually
purchased with a motor fitted and the whole unit can be used as a
turbine/generator set
• use of local materials for the civil works
• use of community labor.
• good planning for a high plant factor (see above) and well
balanced load pattern (energy demand fluctuation throughout the
day)
• low-cost connections for domestic users
• self-cleaning intake screens - this is a recent innovation which is
fitted to the intake weir and prevents stones and silt from entering
the headrace canal; this does away with the need for overspill and
desalting structures along the headrace canal and also means
that, in many cases, the canal can be replaced by a low-pressure
conduit buried beneath the ground - this technology is, at
present, still in its early stages of dissemination
Hydroelectric power
• Development of large-scale hydroelectric power has environmental
impacts associated with the change in water flow and the impoundment
58 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
of water in a reservoir. Dams may block the passage of fish. The natural
flow of silt down the river will be interrupted, affecting downstream
ecosystems. Where large reservoirs are not cleared of trees before
flooding, the methane gas released by decaying wood can be comparable
in greenhouse effect to the CO2 emissions of a fossil-fuel plant of similar
output. The filling of large reservoirs can induce earth tremors, which
may be large enough to be objectionable or destructive. For example, the
1967 Koynanagar earthquake of 6.9 magnitude was created after the
filling of the Koyna Dam in India, with 180 fatalities. A magnitude 7.9
earthquake near the Zipingpu Dam, China, in 2004, with 70,000
fatalities may also have been triggered by the weight of the reservoir.
Negawatt power
• Negawatt power refers to investment to reduce electricity
consumption rather than investing to increase supply capacity. In this
way investing in Negawatts can be considered as an alternative to a new
power station and the costs and environmental concerns can be
compared. Negawatt investment alternatives to reduce consumption by
improving efficiency include:
• Providing customers with energy efficient lamps - low
environmental impact.
• Improved thermal insulation and air tightness for buildings - low
environmental impact
• Replacing older industrial plant - low environmental impact. Can
have a positive impact due to reduced emissions.
• Negawatt investment alternatives to reduce peak electrical load by
time shifting demand include;
• Storage heaters - older systems had asbestos. Newer systems have
low environmental impact.
• Demand response control systems where the electricity board can
control certain customer loads - minimal environmental impact.
59 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
• Thermal storage systems such as Ice storage systems to make ice
during the night and store it to use it for air conditioning during the day
- minimal environmental impact.
• Pumped storage hydroelectricity - Can have a significant
environmental impact - see hydroelectricity.
• Other Grid energy storage technologies - impact varies.
• Note that time shifting does not reduce total energy consumed or
system efficiency however it can be used to avoid the need to build a
new power station to cope with a peak load.
60 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
ANALYSIS OF HYDRO ELECTRIC PROJECTS OF THE
STATE OF JAMMU AND KASHMIR.
State Run Projects
S.
No
Name of the
project
Year of
commencement
Installed capacity Present
Derated
Capacity
1. Ganderbal 1956 2 x 3 + 2 X 4.5 = 15 MW 8.00 MW
2. Upper Sindh 1965 2x11.3 22.6MW 17.00 MW
3. Upper Sindh ii 1973-74 3x35MW = 105MW 105.00MW
4. Karnah
1991 (I Unit)
19979II unit)
2 X 1=2MW 1.00 MW
5. Lower Jhelum 1907 3 x 35= 105MW 90.00 MW
6. Pahalgam 2 x 1.5 =3MW
7. CHENAB BASIN
Chenani I
1971 (Unit I, II, III)
1975 (Unit IV & V)
5 X 4.66 = 23.30 MW 17.00 MW
8. Chenani II 1996 2 X 1 =2 MW 1.00 MW
9. Chennani III 2001 3 x 2.5 = 7.5 MW 7.50 MW
10.
Bhaderwah 2 x 0.5MW 1.00 MW
11.
Baglihar 3x150=450MW 450.00 MW
12. RAVI BASIN
Sewa III
2002 3 X 3 =9 MW 9.00 MW
13. INDUS BASIN
Iqbal
1956 3 x 1.25 = 3.75MW 3.75MW
14. Hunder 1995 2x 200 KW = 400KW 0.40 MW
15. Sumoor 1993 2x 0..50 KW 100KW 0.10MW
16. Bazgo 1994 2x 1.50 KW = 300KW 0.30MW
17. Igo-Mercellong 2x1.50=MW 3.00 MW
18.
Marpachoo 3x0.25=0.75MW 0.75MW
19.
Haftal 2x0.50MW 1.00MW
20.
Stakna 2x2=4MW 4.00 MW
TOTAL Total 758.70 Mw 719.8MW
CENTRAL
SECTOR
Installed capacity
Present
Derated
Capacity
1 Salal HEP 6x115 690MW
2 Uri –I 4x120 480MW
3
Dul-Hasti 3x130 390MW
Total 1560MW
1560MW
The JKSPDC presently has only 20 hydroelectric projects with
installed capacity of 758.70 MW and actual production of 719.8MWs
61 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
located in various districts of J&K including 450 MW Baglihar
Hydroelectric project. Besides NHPC owns three main projects viz Salal,
Dul-Hasti and Uri 1 with the installed capacity of 1560 MW of power.
Being rich in hydro resources the state is suffering from deficiency
of 1567.70MW of electricity to meet the demand of state. Contribution of
electricity supply from all sources is shown in the table below where in
state contributes 29% and the share of central government projects is
around 9% and a meager contribution comes from the private sector
projects which is 0.7% less than one percent.
STATEMENT SHOWING ACTUAL DEFICIENCY IN HEP SUPPLY
Particulars Units % Units Total
1 Requirement of Electricity by the
state
100% 2500.00MW
2(a) Actual production 719.80MW 28.79%
2(b) Central sector Share 12.5% of
1560 MW
195.00MW 7.8%
2(c) 17.50 MWs from two private
sector projects.
17.50 MW 0.7%
3 Total available[2a+2b+2c] 932.30MW 37.28%
Deficiency (1-3) 62.7% 1567.70MW
It is evident from the diagram that there is a big gap between the
availability of and the demand for electricity. Though the hydro
potential of the State is about 22,000 MW, annual energy loss works out
to 60,000 million units valuing Rs. 30,000 Crores at Rs. 5 per unit per
year, which is substantially less than the prevalent market rate.
State
Authorities
29%
Central Share
8%
Private Sector
0.07%
Deficiency
63%
Requirement 2500
62 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
Main source for the development of hydro power projects to the
state of Jammu and Kashmir are Jhelum, Chenab, Indus and Ravi on
which main power projects are developed and developing. The table
below shows the figures of actual capacity, harnessed power and it also
shows the status of construction of new projects with power potential.
River Jhelum has a total identified potential of 3560 MW potential of
which only 750.1 MWs have been tapped and projects under
construction will add 570 MWs to the power pool of country.
River Chenab has the highest potential of 10360 MWs of which only
1563.8 MWs have been tapped and further 450 MWs are under
construction.
Actual, harnessed potential, under construction and unutilised
power potential of Jhelum, Chenab, Indus and Ravi.
S.
No
Name
of the
River
Actual
Potential
Under
construction
%
Harnessed
Harnessed
Potential
Unutilised
Capacity
1 Jhelum 3560 570 MWs 21.07% 750.1MW 78.93%
2 Chenab 10360 450 MWs 15.09% 1563.8MW 84.91%
3 Indus 2060 90.26 MWs 4.38% 13.3MW 95.62%
4 Ravi 500 00.00MWs 25.80% 129.0MW 74.20%
Jhelum Chenab Indus Ravi
Actual 3560 10360 2060 500
Under construction 570 450 90.26 2.8
Harnessed Potential 750.1 1563.8 13.3 129
0
2000
4000
6000
8000
10000
12000
63 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
Indus is the third biggest source of hydro power in the state with the
total capacity of 2060 MWs of which only 13.3 MWs have been
harnessed and 90.26 MWs are under construction.
River Ravi has a potential of 500 MWs of power and 25.8% have been
tapped and still 74% is available which needs to be considered for the
development as well as no efforts have been made to construct any
projects on it.
It is also evident from the table that there lies a big gap between actual
potential and unharnessed potential, 78.93% of the total potential of
Jhelum is un-utilized, 84.91% of Chenab, 95.62% of Indus is unutilized
and there is the least done to tap its potential and also only 74.20%
power potential of Ravi is yet to be utilized.
Though the hydro potential of the State is about 22,000 MW, annual
energy loss works out to 60,000 million units valuing Rs. 30,000 Crores
at Rs. 5 per unit per year, which is substantially less than the prevalent
market rate. The state needs an investment of US $ 33.84 Billion for
achieving the target of generating 22000 MW of electricity. (Present
dollar at 65 INR). In order to overcome the present shortage the state
needs an investment of 15852 Crore.
[Cost of generating 1MW=100,000,000[10 crores]
Cost of generating 22000 MW= 22000x10
=220000 crore
Dividing the figure of 2200000000000 by present dollar rate @ 65We get 33.84 Billion Dollars]
FUNDS REQUIRED TO MEET THE DEFICIENCY BY STATE AT PRESENT
and FUNDS REQUIRED TO GENERATE UNTAPPED POWER RESOURCES
Particulars Figure in Crores
1 Cost of generating 1MW 10.00cr
2 Cost of generating 1585.20 MW 15,852.00cr
3 Cost of generating 21085.2 210,852.00cr
The state has great prospects for the development if it taps all its
estimated power potential which is 22000MWs and of which state
produces 719.8 MWs and the state receives 12% from central projects
64 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
which is 195MWs from 1560 MWs tapped by the central projects. Table
below shows the figures of untapped power which is 21085.20 MWs
having the potential to fetch Rs.105426 Crore revenue to the state and
the total revenue from all hydroelectric power resources will be Rs.
110000.Crore.
Revenue Generating Capacity if developed by the state authorities
production Power In MW Unit Price Rs In Crores
1 Actual production
719.80MW 5 3599.00cr
2 Central sector
12% OF 1560 MW
195.00MW 5 975.00cr
3 Unharnessed
resources
21085.20 MW 5 105426.00cr
TOTAL REVENUE FROM ALL PROJECTS 110000.00cr
To the contrary if the hydro power projects are developed by the central
government, it will lead to tremendous loss to the state as it is evident
from the below produced figures that state will have meager 17752.25
Crore revenue as against Rs. 105426.00cr which state will be able to
generate if projects are taken up by the state herself. Every effort should
be made by the state government to decide the avenues of finance
required for the most precious assets to protect the state from losing Rs.
87673.75 Crore annually.
BY STATE
, 3599
BY CENTRE,
975
UNHARNESSED
, 105426
TOTAL
POTENTIAL,
110000
0
20000
40000
60000
80000
100000
120000
REVENUE POTENTIAL RS IN CRORE
Revenue Potential
65 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
Revenue Generating Capacity if developed by the central
authorities
production Power In MW Unit Price Rs In Crores
1 Actual production 719.80MW 5 3599.00 Cr
2 Central sector 12%
OF 1560 MW
195.00MW 5 975.00 Cr
3 Unharnessed
resources
12% OF
21085.20 MW
2530.22MW
5 12651.1 Cr
TOTAL REVENUE FROM ALL PROJECTS 17225.10 Cr
State will only be entitled to 2530.22MW from the total of 21085.20MWs
which is still untapped. Likewise the state will share 12% in the form of
royalty from the revenue generated by the central government projects
which is 12651.1 Cr as compared to 105426 Crores if developed by the
state. Furthermore the central government will have an incremental
income of Rs. 88200.9 Crore comprising 88% revenue from hydro power
projects of the state of Jammu and Kashmir.
REVENUE LOSS IF THE POWER PROJECTS ARE DEVELOPED BY
THE CVENTREAL GOVERNMENT
production Power In MW Total Revenue/ anum
Total Potential 22000.00 MW 110000.00Cr
1 If Developed by the state 21085.20 MW 105426.00cr
2 If Developed by the centre 2530.22MW 12651.10Cr
Net Revenue Loss to the
State(1-2)
18554.98MW 92775.10cr
The revenue of 17752.25 Crore will not be sufficient to the state to meet
its revenue expenditures and hence with this revenue only state
administration can be run leaving least for the development of primary,
secondary and tertiary industry as the dependence of state is more than
51% of its budget on central grant.
The projects can be developed phase wise and if the development is
assumed instant than we can have the idea of payback period which is
two years considering the total cost of projects and the net annual cash
inflows. It means if the projects are developed in one year and operated
at full capacity then the payback will be two years. Therefore it points
66 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
towards a very favorable situation for the prosperity of state as the
borrowed money will easily be repaid within two years.
Calculation of Payback period (UNDER STATE CONTROL)
Payback period= cost of project/net annual cash inflows
Payback period= 210852/105426
Payback period=2 years
As against this if the state hands over the construction of power projects
to central authority, then at the existing royalty rates which is 12%
presently. Central government will utilize the projects for twelve years
and in such situation payback period will be twelve years.
Calculation of Payback period (UNDER CENTRAL CONTROL)
Payback period= cost of project/net annual cash inflows
Payback period= 210852/17752.25
Payback period=11.9 years OR 12 years appx.
There are other possibilities on the basis of which payback period can be
calculated. Phase wise construction can also considered for calculation
of payback period of the projects.
If the development of total power potential is divided into four phases
then every phase will develop 5271.3MWs and cost associated with every
phase will be 52713 Crore rupees which will recover in two years.
5271.3MWs will generate 105426 Crores in four years and out of which
52713 has to be repaid to the lending agencies and the remaining
amount will serve as a basis for the construction of the second phase of
5271.3 MWs for which state needs no external financing as the money
generate within four years after repayment will be sufficient to be
invested into it. The payback period will be 8 years if phase wise
construction is considered.
This will have a very positive impact on the state Economy. Albeit
presently the state economy is the smallest in country after M.P where
in Primary sector contributes 25.82% the secondary sector contributes
about 28.29% and the tertiary sector contributes around 46% in GSDP.
With the development of hydro-power projects the contribution of the
services sector will increase from 45.89% to 83.11%.
67 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
Present share of Primary, Secondary and Tertiary sector in the State Economy
No Sector Revenue (In Crore) Percentage Total (In
Crore)
1 Primary 12352.29 25.82%
2 Secondary 13533.94 28.29%
3 tertiary 21953.77 45.89%
Total 100.00% 47840
Future Share of Primary, Secondary and Tertiary sector in the State Economy
No Sector Revenue
(In Crore)
Percentage Total (In
Crore)
1 Primary 12352.29 8.06%
2 Secondary 13533.94 8.83%
3 Tertiary(21953.77+105426)
(Old share + New share)
127379.77 83.11%
Total 100% 153266
Service sector will surpass the primary and secondary sector by Rs
105426 crore and will lead the economy as the major contributor
towards the state economy which will change the nature of economy
from agrarian to a dynamic service economy. The figures in table above
show the impact on electricity on the primary, secondary and tertiary
sector. Share of service sector changes positively from 45.89% to
83.11% whereas the share of primary and secondary sectors show a
negative growth at 8% which will increase with the time as electricity
serves the basis for the development of both the sectors.
68 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
CONCLUSION
The State is not rich in the non-renewable sources of fossil fuels
which could be used for energy generation but there are huge renewable
sources of energy in the form of water resources which can meet the
demand of the people. There is little scope for any other forms of power
generation in the state since there are few feasible sites for plants and
the area’s difficult topography makes the transport of raw materials
complicated and costly.
The state of Jammu and Kashmir with smallest economic size of $7.36
Billion as against 82.04$ billion in UP showing 6.28% growth and with a
third lowest per capita income of 27250. Primary sector contributes
25.82% with an annual growth of 1.79%. The state contributes 1% to
India’s GSDP. The secondary sector contributes about 28.29%. Whereas
the tertiary sector contributes around 46% in GSDP. The growth rate of
the services sector is 5% which is rather stagnant in state.
The economic prosperity of the state is inextricable from that of
its water resources, and its future depends on finding an equitable,
sustainable outcome for the region’s most valuable resource. Failing to
address the acute and escalating water issues will generate increasingly
dire consequences, particularly considering the rising pressures of
population growth and climate change. Integrated water cooperation and
sharing between Pakistan and India is important enough in its own
right, but perhaps finding a new way to navigate Kashmir’s waters will
provide the path to peace that the people of Jammu Kashmir, its parent
countries, and the wider international community seek. The disputed
territory’s potential could help to transform it “from a valley of death and
destruction to a center of excellence in…engineering.”
The main asset of Jammu & Kashmir state is its water resources.
There are near about twenty (20) rivers flowing through Jammu &
Kashmir. Three rivers the Indus, Jhelum and Chenab have to go to
Pakistan whereas Water of Sutlej, Beas and Ravi are to be consumed by
India. The state needs an investment of US $ 33.84 Billion for achieving
69 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
the target of generating 22000 MW of electricity according to the new
estimates.
The JKSPDC presently has only 20 hydroelectric projects with
installed capacity of 758.70 MW and actual production of 719.8MWs
located in various districts of J&K including 450 MW Baglihar
Hydroelectric project. Besides NHPC owns three main projects viz Salal,
Dul-Hasti and Uri 1 with the installed capacity of 1560 MW of power.
Being rich in hydro resources with hydro potential of about
22,000 MW the state is suffering from deficiency of 1567.70MW of
electricity to meet the demand of state and also the annual energy loss
of 60,000 million units valuing Rs. 30,000 Crores. Contribution of
electricity supply from all sources is 38.7% where in state contributes
29% and the share of central government projects is around 9% and a
meager contribution comes from the private sector projects which is
0.7% less than one percent. The state needs a huge investment of US $
33.84 Billion for achieving the target of generating 22000 MW of
electricity.
Despite of being rich in hydroelectric resources Kashmir has been
unable to grow to the optimum potential of its agriculture and electricity
sectors, its most vital needs for economic and human development.
Various factors have been identified which include:
? Indus Water Treaty: IWT permits building storage aggregating 3.6
million acre feet (MAF) on the three rivers of the Indus, Jhelum and
the Chenab.
? The projects handed over to NHPC on power sharing agreement basis
are presently completely under the control of NHPC and no
consideration is being given to the State in terms of power supply as
per the earlier agreement. In fact power generated within the State
by NHPC is being fed to the Northern Grid from where J&K is
purchasing its power requirement.
? The state of J&K having hostile terrain already suffers from huge
amount of transmission and distribution losses.
70 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
? Excess payment of Rs. 2340 Crores on power purchases from Salal
project. Whereas the agreement provides that J&K was entitled to 47
percent of power from Salal including 35 percent NSG at bus bar rate
(generation cost) and 12 percent of royalty cost.
? Huge amount for power purchasing from other state.
? The state not been allowed to utilize its water resources freely, the
state could have been able to produce the increased amount of
electricity within the state and the huge amount of money which it
has to pay for purchasing the power outside the state could have
been invested for other developmental purposes resulting in overall
growth of the J&K state economy.
? The absence of any legislation regarding taking over the power
projects being run within the State. There is also at the same time
need to review the existing power policy to make it more investor
friendly. This is all the more essential in order to rope in greater
number of private players for investing and sharing their expertise in
power sector.
With a growth in population the need for the supply of electric power is
growing very fast which provide an incentive for the development of the
industry as services sector is an important growth driver. The increase
in demand for power will help the economy grow and it will lead to
modernization, industrialization and improvement in basic amenities
culminating into quality life of the people. There has been a growing
realisation in developing countries that micro-hydro schemes have an
important role to play in the economic development of remote rural
areas, especially mountainous ones like the valley of Kashmir.
Hydropower is a renewable resource because it uses the continuous flow
of rivers and streams to produce electricity without using up the water
resource. It is also a clean technology because it does not rely on the
burning of fuels like oil, coal, or natural gas to produce power.
The best hydro power projects suitable to the state are Mini-hydro power
projects. Generally, small hydro projects built for application at an
isolated area are run-of-river developments and for this purpose the
71 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
topography of valley is very suitable and relevant. The best geographical
areas for exploiting small-scale hydro power are those where there are
steep rivers flowing all year round.
Mini-hydro has a power output of 100 kW to 1 MW, and is typically used
for a small factory or isolated community. Most of the environmental
impacts of small-scale hydro developments can be avoided in part or in
whole by a good design and appropriate construction and operating
practices. Since small hydro projects usually have minimal
environmental and licensing procedures, and since the equipment is
usually standardized and simplified, and since the civil works
construction is also small, small hydro projects should be developed
very rapidly in the state which will help in tapping the total identified
power potential of 22000MWs.
For this purpose the main source for the development of hydro power
projects to the state of Jammu and Kashmir are Jhelum, Chenab, Indus
and Ravi on which main power projects are developed and developing.
Total identified potential of River Jhelum is 3560 MW potential of which
only 750.1 MWs have been tapped and projects under construction will
produce 570 MWs. River Chenab has the highest potential of 10360
MWs of which only 1563.8 MWs have been tapped and further 450 MWs
are under construction. Indus is the third biggest source of hydro power
in the state with the total capacity of 2060 MWs of which only 13.3 MWs
have been harnessed and 90.26 MWs are under construction. River Ravi
has a potential of 500 MWs of power and 25.8% have been tapped and
still 74.2% is available.
Nevertheless, there lies a big gap between actual potential and
unharnessed potential; 78.93% of the total potential of Jhelum is un-
utilized, 84.91% of Chenab, 95.62% of Indus and also 74.20% power
potential of Ravi is yet to be utilized.
The focus should be on the main three river basins of the state include
Indus and its tributaries, Jhelum and its tributaries, Chenab and its
tributaries who offer great scope for generation of power through
Hydroelectric plant and whose potential is identified and on these rivers
72 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
the development of mini-hydro will prove cost effective and profitable as
well. Also because of the abundant water resources state could have
been able to generate surplus electricity which it can export to
neighboring states, resulting additional revenue to the state. The actual
requirement of the state is 2500MWs and the actual potential is 22000
MWs. The state would earn a net incremental revenue of Rs. 97500
crore [15Billion$] after meeting the shortfall and exporting the
remaining portion of 19500MWs to the neighboring states.
Since power and water has become an intensive need for
industrialization and hence development, if some kind of raw material is
available for exploitation, it should to be utilized fully. Then optimal
exploitation of the available resources of the State would meet the
State’s demand and also will boost the overall economy of the state.
The revenue generating capacity of all projects is estimated at Rs.
110000cr per annum, this will help the state to invest sufficiently in
primary, secondary and tertiary sector for which present expenditure is
Rs.8000 crore (Budget figure 2013-14).
Service sector will lead the economy as the major portion of (105426
crore) to the state revenue of (153266 crore) will come from the service
sector to the state which inturn will change the nature of the state
economy from agrarian to the tertiary economy.
Presently the revenue surplus from all sources is Rs. 5280Cr difference
Capital
Reciepts
11%
own taxes
18%
share of central
taxes
12%
own non-taxe
8%
Central Grants
51%
Budget 2013-14
73 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
between revenue receipts Rs.33970 Crore and revenue expenditure
Rs.27096cr.Total resources available to the state is Rs.19748 crore
(Budget figure 2013-14). Total capital and revenue receipts are 38068 of
which 51% is received in the form of Central grant.
If the power projects are financed by World Bank, IMF and other funding
agencies, the state would be able earn Rs.105426 Crore revenue from
untapped resources and hence the total revenue from all hydroelectric
power resources will be Rs. 110000 Crore which will be used to first
repay all the debts within two years.
If the hydro power projects are developed by the central government, it
will lead to tremendous loss to the state and the state will generate only
17752.25 Crore revenue from state run and central share in comparison
to Rs. 105426 crore if the projects are taken up by the state herself
which is less than the borrowed funds 19414.68 crore from the central
government. Every effort should be made by the state government to
decide the avenues of finance required for the most precious assets to
protect the state from losing Rs. 87673.75 Crore annually. Besides a net
income of Rs.18555 comprising 88% revenue from hydro power projects
of the state of Jammu and Kashmir will go to the central pool and the
share of state from added pool will be very minor and will not have any
significant impact on state economy.
To the contrary if the projects are developed by the state and if the
development is assumed instant and projects operated at full capacity,
then the payback period will be two years dividing the total cost of
projects by the net annual cash inflows. It means if the projects are
developed in one year and operated at full capacity then the payback
will be two years. Albeit it seems theoretically an ideal alternative and a
very favorable situation for the prosperity of state as the borrowed
money will easily be repaid within two years but it needs a very strong
initiative and government support in arranging finances for the purpose
which has not happened so far.
Projects can also be developed in different phases and different payback
period can be calculated.
74 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
The best option would be if the development of total power projects is
divided into four phases wherein every phase will develop 5271.3MWs
and cost associated with every phase will be will recover in two years.
5271.3MWs will generate 52713 in two years excluding the construction
phase and Rs 105426 Crores in four years. Out of this amount 52713
has to be repaid to the lending agencies and the remaining amount will
serve as a basis for the construction of the second phase of 5271.3 MWs
for which state needs no external financing as the money generate with
in four years after repayment will be sufficient to be invested into it. The
payback period will be 8 years if phase wise construction is considered.
This will have a very positive impact on the state Economy. With the
development of hydro-power projects the contribution of the services
sector will increase from 45.89% to 83.11%.Service sector will surpass
the primary and secondary sector by Rs 105426 crore and will lead the
economy as the major contributor of towards the state economy which
will change the nature of economy from agrarian to a dynamic service
economy.
The impact of the development of hydro-electric power projects by the
state on the primary, secondary and tertiary sector of the state will be
very dynamic as the share of service sector changes positively from
45.89% to 83.11% whereas the share of primary and secondary sectors
show a negative growth at 8% which will increase at a very fast rate with
the time in future as electricity serves the basis for the development of
all the sectors.
The state would be able to manage its economy independently and the
contribution towards National GDP would increase significantly because
the pace of development of primary secondary and tertiary industry will
multiply manifold. With the development of power sector to its fullest
capacity revenue of the state will increase from 5280 to115280Crore,
which is (twenty two) 22time more than present position. Expenditure
on power will be very low and 9% of (27096) 2438.64 crore of
expenditure on power and 9% expenditure on Interest will be utilised for
developing the infrastructure of the state and other social sectors.
75 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
Therefore, with the owned funds for the administration, the state would
be able to save around 5000 Crore rupees and this surplus will be an
extra capital available for the development of social infrastructure of the
state.
Unemployment in the state will be alleviated as with the huge surplus
available with the state, new industries on modern lines will be
developed, all the unemployed educated youth who are millions in
number will find the livelihood within the state which will serve as a
stimulus for peace and prosperity and the sense of alienation will
eliminate.
This will strengthen not only the state economy, promote peace and
prosperity but also the living standard and per capita income of people
will change proportionately to change in economic size of the state from
$7.36 US Billion to $24.22 US Billion, thereby increasing the per capita
income of the people of state from Rs. 40000(615$) to Rs. 131600
(2025$) preceding to Delhi with per capita income of Rs 117000 and
Haryana with 78781. This development will promote the state as the first
richest state among the northern states of India.
salaries
37%
Pension
9%
Interest
9%
Power
9%
Capital
Expenditure
25%
Others
11%
State's Expenditure
76 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
Micro-hydro schemes should be owned and operated by the
communities they serve, with any maintenance carried out by skilled
members of that community. So they provide employment in
themselves, as well as providing the power to re-energize entire
communities. State can also provide the industrial loan to the budding
entrepreneurs who in turn will create numerous avenues of employment
for the young, dynamic and talented youth of the state. Therefore,
estimated power potential of the state is very helpful to bring peace,
prosperity and stability in the ongoing crisis in J&K State.
77 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
Annexure 1
Existing Power Projects
Ganderbal
1. Year of commissioning 1956
2. Installed capacity
2 x 3 + 2 X 4.5 = 15
MW
3. Present derated capacity 8 MW
4. Head
137 M (Unit I & II)
140 M (Unit III & IV)
5. Length of Power canal 15 km
6. Designed discharge Capacity 473 cusecs
Upper Sindh ii
1. Year of commissioning 1973-74
2. Installed capacity
2x 1.30MW =
22.6MW
3. Present derated capacity 14MW
4. Head 149 M
5. Length of water Conductor 11 KM
6. Design discharge capacity 425 cusecs
Karnah
1. Year of Commissioning
1991 (I Unit)
19979II unit)
2. Installed capacity 2 X 1=2MW
3. Present Capacity 1 MW
4. Net DesignHead 36 M
5 Length of the Diversion Structure 315 M
6 Maximum Discharge Capacity 8.496 Cumecs
78 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
CHENAB BASIN
Chenani I
1. Year of commissioning
1971 (Unit I, II, III)
1975 (Unit IV & V)
2. Installed capacity
5 X 4.66 = 23.30
MW
3. Present derated Capacity 17 MW
4. Length of canal 18.64 Kms
5. Net head 365.83 M
Chenani II
1. Year of commissioning 1996
2. Installed capacity 2 X 1 =2 MW
3. Location
4 District Udhampur
Stage-II
Latitude 32 Deg-55'N
Longitude 75 Deg-09
E
5 Hydrology and climate condition
River Tawi
Catchment area upto power house
stage-I
652 Sq. Km
6. Water Conductor System
Total Length 2.315 Kms
Carrying Capacity 7.12 cumecs
7. Penstock
Feeder Penstock 50 M
Diameter 2600 mm.
79 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
Bifurcation
No. of pipes 2
Length of each pipe 18 Mt.
Diameter of each pipe 1900m
8. Power House
Location
Upstream of
SalmeyAcqueduct on
left bank of river tawi
Installed Capacity 2 Units of 1 MW each
Type Surface
Size 26m x 11.4 m
No. of Units 2 No.s
Gross Head 32.50
Net head 32.50
Type of turbine Francis
Rated output 1 MW
9 Generator
No. and type 2 x 1000 Kw
Generating Volt. 415 V
80 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
Chennani III
1. Year of commissioning 2001
2. Installed capacity 3 x 2.5 = 7.5 MW
3. Head 74.4 M
4. BR Capacity 16560 Cusecs
5. Length of canal 5.753 Kms
6. Location
District Udhampur
Stage-II
Latitude 32 Deg 52
Mn
Longitude 75 Deg
10 ME
5 Hydrology and climate condition
River Tawi
Catchment area upto power house
stage-I
625 Sq. Kms
6. Water Conductor System
Total Length 5.753 Kms
Carrying Capacity
Diversion to desailting tank 15.0 cumecs
Desilting tank onwards 13.0 cumecs
Diameter of each pipe 1900 m
7. Power House
Location
On the right bank of
river Tawi at Kawa.
Installed Capacity
3 Units of 2.5 MW
each
Type Surface
Size 45.30 M x 12.15 M
No. of Units 3 No.
Gross Head 80.0
Net head 74.7 M
Type of turbine Francis
9 Generator
No. and type
3 X 1000 KW
Synchronous.
81 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
RAVI BASIN
Sewa III
1. Year of commissioning 2002
2. Installed capacity 3 X 3 =9 MW
3. Head 38 M
4. Length of Canal 2.89 kms
5. Location 365.83 M
State Jammu & Kashmir
District Kathua
6 Hydrology
Catchment area at diversion area 494 Sq. Km
50% dependable discharge 24.13 cumecs
75% dependable discharge 6.94 cumecs
7. Diversion Structures
Type
Barrage 113.50 met
between flanks
8 Intake Staructure
No. &wideth of bays One bay of 5 M
Crest level 590 M
Design discharge 36.62 cumecs
9. Penstock
Number 3
Size 1.9M dia. Each
Length 62 M
10. Power House
Location
Near SudhaNAllah
on right bank of
river tawi.
Type Pit type
Gross Head 42.80 M
Net Head 38.00 M
82 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
INDUS BASIN
Iqbal
1. Year of commissioning 1956
2. Installed capacity 3 x 1.25 = 3.75MW
3. Head 15 M
5. Length of water Conductor 1.5 Km
Hunder
1. Year of commissioning 1995
2. Installed capacity
2x 200 KW =
400KW
3. No. of Units 2
4. Type of turbine Francis
5 Net Head in meter 32.01
6. Output at Generator terminals 200 KW
Sumoor
1. Year of commissioning 1993
2. Installed capacity
2x 0..50 KW
100KW
3. Make Jyoti Ltd., Baroda
4. No. of Units 2
5. Type of turbine Turbo
6. Net Head in meter 58
7. Output at Generator terminals 150 KW
83 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
Bazgo
1. Year of commissioning 1994
2. Installed capacity
2x 1.50 KW =
300KW
3. Make Jyoti Ltd., Baroda
4. No. of Units 2
5. Type of turbine Turbo
6. Net Head in meter 58
7. Output at Generator terminals 150 KW
8. Mounting Horizontal
5 Cooling Water cooled
10 Type of Governor
Hydro Mechanical
Bell Drive.
Annexure II
Upcoming power projects in Jammu and Kashmir
Name of Power
Project
Capacity in MW
STATE SECTOR
Baglihar Stage-II 450
Pahalgam (3rd Unit) 1.50
Matchil 0.35
Baderwah (3rd
Unit)
0.5
Sanjak 1.26
Total 453.61
CENTRAL SECTOR
Uri-II 240
Sewa-II 120
NimoBazgo 45
Chutak 44
Total 449
84 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
REFERENCES
1. HYPERLINKhttp://www.jkspdc.nic.in/us1.htm
2. ShakeelQalander former president J&K FCIK
3. Kashmir Civil Society
4. Nazakat R. and Nengroo A.
5. Mohammad D, Bhat AS (2002). Problems of Power Sector
Development. In ShriPrakash and G.M. Shah, eds., Towards
Understanding the Kashmir Crisis, Delhi, p.175.
6. Shahmiri J (2010). Indus Water Treaty J&K Perspective, (this
Speech is Delivered in New Delhi on India-Pakistan Water
Dialogue) published by Greater Kashmir Srinagar, p.7
7. Miner M et al (2009). Water sharing between India and Pakistan: a
critical evaluation of the Indus Water Treaty, journal of water
international Vol. 34, No. 2, June, pp 204–216
8. Ali N (2011). J&K Vis New Delhi, at
http//www.himalmag.com/component/.../4560-j-a-k-vs-new-
delhi-.html
9. SC Sud (2005). Optimizing Hydel Development in Chenab Basin,
Journal of Himalayan and Central Asian Studies VOL. 9. , No.3.
p.27.
10. BukhariS (2000). "Serious Power Shortage Stalks J&K", the
Hindu, 18, January.
11. Sinha R (2006). Transboundary Disputes: Two Neighbors and a
Treaty, Journal of Economic and Political Weekly, p.209.
12. Waslekar S (2005). The Final Settlement: Restructuring India-
Pakistan Relations, Mumbai: Strategic Foresight Group, pp 54-62.
doc_316481574.docx
The State is not rich in the non-renewable sources of fossil fuels which could be used for energy generation but there are huge renewable sources of energy in the form of water resources which can meet the demand of the people. There is little scope for any other forms of power generation in the state since there are few feasible sites for plants and the area’s difficult topography makes the transport of raw materials complicated and costly.
The state of Jammu and Kashmir with smallest economic size of $7.36 Billion as against 82.04$ billion in UP showing 6.28% growth and with a third lowest per capita income of 27250. Primary sector contributes 25.82% with an annual growth of 1.79%. The state contributes 1% to India’s GSDP. The secondary sector contributes about 28.29%. Whereas the tertiary sector contributes around 46% in GSDP. The growth rate of the services sector is 5% which is rather stagnant in state.
The economic prosperity of the state is inextricable from that of its water resources, and its future depends on finding an equitable, sustainable outcome for the region’s most valuable resource. Failing to address the acute and escalating water issues will generate increasingly dire consequences, particularly considering the rising pressures of population growth and climate change. Integrated water cooperation and sharing between Pakistan and India is important enough in its own right, but perhaps finding a new way to navigate Kashmir’s waters will provide the path to peace that the people of Jammu Kashmir, its parent countries, and the wider international community seek. The disputed territory’s potential could help to transform it “from a valley of death and destruction to a center of excellence in…engineering.”
The main asset of Jammu & Kashmir state is its water resources. There are near about twenty (20) rivers flowing through Jammu & Kashmir. Three rivers the Indus, Jhelum and Chenab have to go to Pakistan whereas Water of Sutlej, Beas and Ravi are to be consumed by India. The state needs an investment of US $ 33.84 Billion for achieving the target of generating 22000 MW of electricity according to the new estimates.
The JKSPDC presently has only 20 hydroelectric projects with installed capacity of 758.70 MW and actual production of 719.8MWs located in various districts of J&K including 450 MW Baglihar Hydroelectric project. Besides NHPC owns three main projects viz Salal, Dul-Hasti and Uri 1 with the installed capacity of 1560 MW of power.
Being rich in hydro resources with hydro potential of about 22,000 MW the state is suffering from deficiency of 1567.70MW of electricity to meet the demand of state and also the annual energy loss of 60,000 million units valuing Rs. 30,000 Crores. Contribution of electricity supply from all sources is 38.7% where in state contributes 29% and the share of central government projects is around 9% and a meager contribution comes from the private sector projects which is 0.7% less than one percent. The state needs a huge investment of US $ 33.84 Billion for achieving the target of generating 22000 MW of electricity.
Despite of being rich in hydroelectric resources Kashmir has been unable to grow to the optimum potential of its agriculture and electricity sectors, its most vital needs for economic and human development. Various factors have been identified which include:
• Indus Water Treaty: IWT permits building storage aggregating 3.6 million acre feet (MAF) on the three rivers of the Indus, Jhelum and the Chenab.
• The projects handed over to NHPC on power sharing agreement basis are presently completely under the control of NHPC and no consideration is being given to the State in terms of power supply as per the earlier agreement. In fact power generated within the State by NHPC is being fed to the Northern Grid from where J&K is purchasing its power requirement.
• The state of J&K having hostile terrain already suffers from huge amount of transmission and distribution losses.
• Excess payment of Rs. 2340 Crores on power purchases from Salal project. Whereas the agreement provides that J&K was entitled to 47 percent of power from Salal including 35 percent NSG at bus bar rate (generation cost) and 12 percent of royalty cost.
• Huge amount for power purchasing from other state.
• The state not been allowed to utilize its water resources freely, the state could have been able to produce the increased amount of electricity within the state and the huge amount of money which it has to pay for purchasing the power outside the state could have been invested for other developmental purposes resulting in overall growth of the J&K state economy.
• The absence of any legislation regarding taking over the power projects being run within the State. There is also at the same time need to review the existing power policy to make it more investor friendly. This is all the more essential in order to rope in greater number of private players for investing and sharing their expertise in power sector.
With a growth in population the need for the supply of electric power is growing very fast which provide an incentive for the development of the industry as services sector is an important growth driver. The increase in demand for power will help the economy grow and it will lead to modernization, industrialization and improvement in basic amenities culminating into quality life of the people. There has been a growing realisation in developing countries that micro-hydro schemes have an important role to play in the economic development of remote rural areas, especially mountainous ones like the valley of Kashmir. Hydropower is a renewable resource because it uses the continuous flow of rivers and streams to produce electricity without using up the water resource. It is also a clean technology because it does not rely on the burning of fuels like oil, coal, or natural gas to produce power.
The best hydro power projects suitable to the state are Mini-hydro power projects. Generally, small hydro projects built for application at an isolated area are run-of-river developments and for this purpose the topography of valley is very suitable and relevant. The best geographical areas for exploiting small-scale hydro power are those where there are steep rivers flowing all year round.
Mini-hydro has a power output of 100 kW to 1 MW, and is typically used for a small factory or isolated community. Most of the environmental impacts of small-scale hydro developments can be avoided in part or in whole by a good design and appropriate construction and operating practices. Since small hydro projects usually have minimal environmental and licensing procedures, and since the equipment is usually standardized and simplified, and since the civil works construction is also small, small hydro projects should be developed very rapidly in the state which will help in tapping the total identified power potential of 22000MWs.
For this purpose the main source for the development of hydro power projects to the state of Jammu and Kashmir are Jhelum, Chenab, Indus and Ravi on which main power projects are developed and developing. Total identified potential of River Jhelum is 3560 MW potential of which only 750.1 MWs have been tapped and projects under construction will produce 570 MWs. River Chenab has the highest potential of 10360 MWs of which only 1563.8 MWs have been tapped and further 450 MWs are under construction. Indus is the third biggest source of hydro power in the state with the total capacity of 2060 MWs of which only 13.3 MWs have been harnessed and 90.26 MWs are under construction. River Ravi has a potential of 500 MWs of power and 25.8% have been tapped and still 74.2% is available.
Nevertheless, there lies a big gap between actual potential and unharnessed potential; 78.93% of the total potential of Jhelum is un-utilized, 84.91% of Chenab, 95.62% of Indus and also 74.20% power potential of Ravi is yet to be utilized.
The focus should be on the main three river basins of the state include Indus and its tributaries, Jhelum and its tributaries, Chenab and its tributaries who offer great scope for generation of power through Hydroelectric plant and whose potential is identified and on these rivers the development of mini-hydro will prove cost effective and profitable as well. Also because of the abundant water resources state could have been able to generate surplus electricity which it can export to neighboring states, resulting additional revenue to the state. The actual requirement of the state is 2500MWs and the actual potential is 22000 MWs. The state would earn a net incremental revenue of Rs. 97500 crore [15Billion$] after meeting the shortfall and exporting the remaining portion of 19500MWs to the neighboring states.
Since power and water has become an intensive need for industrialization and hence development, if some kind of raw material is available for exploitation, it should to be utilized fully. Then optimal exploitation of the available resources of the State would meet the State’s demand and also will boost the overall economy of the state.
The revenue generating capacity of all projects is estimated at Rs. 110000cr per annum, this will help the state to invest sufficiently in primary, secondary and tertiary sector for which present expenditure is Rs.8000 crore (Budget figure 2013-14).
Service sector will lead the economy as the major portion of (105426 crore) to the state revenue of (153266 crore) will come from the service sector to the state which inturn will change the nature of the state economy from agrarian to the tertiary economy.
Presently the revenue surplus from all sources is Rs. 5280Cr difference
between revenue receipts Rs.33970 Crore and revenue expenditure Rs.27096cr.Total resources available to the state is Rs.19748 crore (Budget figure 2013-14). Total capital and revenue receipts are 38068 of which 51% is received in the form of Central grant.
If the power projects are financed by World Bank, IMF and other funding agencies, the state would be able earn Rs.105426 Crore revenue from untapped resources and hence the total revenue from all hydroelectric power resources will be Rs. 110000 Crore which will be used to first repay all the debts within two years.
If the hydro power projects are developed by the central government, it will lead to tremendous loss to the state and the state will generate only 17752.25 Crore revenue from state run and central share in comparison to Rs. 105426 crore if the projects are taken up by the state herself which is less than the borrowed funds 19414.68 crore from the central government. Every effort should be made by the state government to decide the avenues of finance required for the most precious assets to protect the state from losing Rs. 87673.75 Crore annually. Besides a net income of Rs.18555 comprising 88% revenue from hydro power projects of the state of Jammu and Kashmir will go to the central pool and the share of state from added pool will be very minor and will not have any significant impact on state economy.
To the contrary if the projects are developed by the state and if the development is assumed instant and projects operated at full capacity, then the payback period will be two years dividing the total cost of projects by the net annual cash inflows. It means if the projects are developed in one year and operated at full capacity then the payback will be two years. Albeit it seems theoretically an ideal alternative and a very favorable situation for the prosperity of state as the borrowed money will easily be repaid within two years but it needs a very strong initiative and government support in arranging finances for the purpose which has not happened so far.
Projects can also be developed in different phases and different payback period can be calculated.
The best option would be if the development of total power projects is divided into four phases wherein every phase will develop 5271.3MWs and cost associated with every phase will be will recover in two years. 5271.3MWs will generate 52713 in two years excluding the construction phase and Rs 105426 Crores in four years. Out of this amount 52713 has to be repaid to the lending agencies and the remaining amount will serve as a basis for the construction of the second phase of 5271.3 MWs for which state needs no external financing as the money generate with in four years after repayment will be sufficient to be invested into it. The payback period will be 8 years if phase wise construction is considered.
This will have a very positive impact on the state Economy. With the development of hydro-power projects the contribution of the services sector will increase from 45.89% to 83.11%.Service sector will surpass the primary and secondary sector by Rs 105426 crore and will lead the economy as the major contributor of towards the state economy which will change the nature of economy from agrarian to a dynamic service economy.
The impact of the development of hydro-electric power projects by the state on the primary, secondary and tertiary sector of the state will be very dynamic as the share of service sector changes positively from 45.89% to 83.11% whereas the share of primary and secondary sectors show a negative growth at 8% which will increase at a very fast rate with the time in future as electricity serves the basis for the development of all the sectors.
The state would be able to manage its economy independently and the contribution towards National GDP would increase significantly because the pace of development of primary secondary and tertiary industry will multiply manifold. With the development of power sector to its fullest capacity revenue of the state will increase from 5280 to115280Crore, which is (twenty two) 22time more than present position. Expenditure on power will be very low and 9% of (27096) 2438.64 crore of expenditure on power and 9% expenditure on Interest will be utilised for developing the infrastructure of the state and other social sectors. Therefore, with the owned funds for the administration, the state would be able to save around 5000 Crore rupees and this surplus will be an extra capital available for the development of social infrastructure of the state.
Unemployment in the state will be alleviated as with the huge surplus available with the state, new industries on modern lines will be developed, all the unemployed educated youth who are millions in number will find the livelihood within the state which will serve as a stimulus for peace and prosperity and the sense of alienation will eliminate.
This will strengthen not only the state economy, promote peace and prosperity but also the living standard and per capita income of people will change proportionately to change in economic size of the state from $7.36 US Billion to $24.22 US Billion, thereby increasing the per capita income of the people of state from Rs. 40000(615$) to Rs. 131600 (2025$) preceding to Delhi with per capita income of Rs 117000 and Haryana with 78781. This development will promote the state as the first richest state among the northern states of India.
Micro-hydro schemes should be owned and operated by the communities they serve, with any maintenance carried out by skilled members of that community. So they provide employment in themselves, as well as providing the power to re-energize entire communities. State can also provide the industrial loan to the budding entrepreneurs who in turn will create numerous avenues of employment for the young, dynamic and talented youth of the state. Therefore, estimated power potential of the state is very helpful to bring peace, prosperity and stability in the ongoing crisis in J&K State.
1 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
A STUDY
ON
(FISCAL POTENTIAL OF HYDRO-POWER PROJECTS OF
JAMMU AND KASHMIR AND ITS IMPACT ON
REGIONAL ECONOMIC DEVELOPMENT)
RESEARCH REPORT
By
(Khursheed Ahmad Bhat)
Assistant Prof. Finance Department of Hospital Administration
Teerthanker Mahaveer University
Under the supervision of
(ShakeelQalander)
(Former President FCIK J&K)
Professor K.K. Pandey (Director International Affairs TMU)
OFFICIAL ADDRESS SIGNATURE
Khursheed Ahmad Bhat
Assistant Prof.Accounting&Finance
Deptt.Of Hospital Administration
TMU Moradabad 244001
TEERTHANKER MAHAVEER UNIVERSITY
MORADABAD, U.P., INDIA
2013
2 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
ACKNOWLEDGEMENT
My sincere thanks to Professor R. K. Mittal Vice-Chancellor
Teerthanker Mahaveer University who allowed me to complete this
research on the most significant topic concerning Kashmir society. I am
highly grateful to Professor G. Q. Lone H.O.D Department of Commerce
and Management studies. I own my sincere gratitude to Mr. Shakeel
Qalander my research guide former president Federation of Chamber of
Industries Kashmir (FCIK).Professor Hameeda Nayeemand to all the
members of Kashmir Civil Society who extended their support and their
precious time. I take this opportunity to thank each and every one who
have stood by my side and have motivated me to complete this research
particularly my best friend Miss Shazia Rasool. Last but not the least I
thank to Mr. Ajaz Ahmad secretary J&K Cable Car Corporation
Department of Government of Jammu and Kashmir and project
Consultant government of Jammu & Kashmir who has helped me with the
technical support and guided me in the right direction.
3 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
Dedication
The entire project has been dedicated to the
economically deprived youth and citizens of J&K as a
light to a better future.
4 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
Contents
Page No.
1. Introduction 6-19
1.1 introduction 6-10
1.2
Existing and upcoming power projects and
their capacity.
11
1.3
Lower Jhelum
Upper Sindh 1
12-14
1.4
Indus Water Treaty [IWT], 1960
15-19
2. Literature Review 20-32
3. Problem Statement 33
4. Objectives of the Study 34
4.1 Objectives of the Study 35
6. Research Methodology 35
6.1
Research Methodology,
Data analysis
36
Scope and limitations of the study 3
7. Expected Contribution of the Study 37
8
Classification of power projects 38
Model of 1 MW Hydroelectric power project
Classification of hydropower by size.
39
41
Classification of power projects
Project design
40
41
5 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
Scheme components
Classification of turbine types.
Small hydro project development
45
50-59
9
Analysis of all hydro electric projects of the
state of Jammu and Kashmir
60-68
10 Conclusion 69-77
11 Annexure
11.1 List of existing Power projects 78-83
11.2 B List of upcoming
Power Projects
References 84
6 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
INTRODUCTION
Jammu and Kashmir is the northern most state of India. It is situated
mostly in the Himalayan mountains. Jammu and Kashmir shares a
border with the states of Himachal Pradesh and Punjab to the south and
internationally with the People's Republic of China to the north and east
and the Pakistan-administered territories of Kashmir and Gilgit–
Baltistan, to the west and northwest respectively. Formerly a part of the
erstwhile Princely State of Kashmir and Jammu, which governed the
larger historic region of Kashmir, this territory is disputed among China,
India and Pakistan. Pakistan, which claims the territory as disputed,
refers to it alternatively as Indian-occupied Kashmir or Indian-held
Kashmir, while some international agencies such as the United
Nations, call it Indian-administered Kashmir. The regions under the
control of Pakistan are referred to as Azad Kashmir. Jammu and
Kashmir consists of three regions: Jammu, the Kashmir valley and
Ladakh. Srinagar is the summer capital, and Jammu is the winter
capital. While the Kashmir valley is famous for its beautiful
mountainous landscape, Jammu's numerous shrines attract tens of
thousands of Hindu pilgrims every year. Ladakh, also known as
"Little Tibet", is renowned for its remote mountain beauty
and Buddhist culture.
The State of Jammu and Kashmir, being the mountainous state is
deficient in major renewable resources other than water and forest. In
fact nature has endowed unending supply of water resources in the
state which are the backbone of J&K State’s economy. The Water bodies
7 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
of the J&K State have enormous economic potential in the shape of
hydro power generation, irrigation to enhance the agriculture, artificial
lakes and pounds for healthy growth of tourism. Unfortunately, these
rivers water has not been adequately harnessed because of inadequacy
of funds, political instability and lack of the will are the main factors for
utilization of water resources in the State. Some restrictions are imposed
by theIndus Water Treaty [IWT], 1960, because J&K state cannot
exploit its water resources in best manner. However taking together all
these factors have resulted in an economic backwardness of the state. In
the past five decades none of the work has done in J&K state to quantify
the impact of IWT, neither from power department nor from agriculture
department. From last couple of years by the thought provoking efforts
of some economists of J&K state, this issue was raised at state level.
Now there have been growing concern and anger in the state over the
negative consequences of IWT on state economy. Both official and public
circle in the J&K state are pleading the review of IWT, according to the
requirements of the J&K state immediately.
The water resources of Indus Basin managed between India and
Pakistan within the framework of the Indus Waters Treaty. As per the
terms and conditions of the IWT, six rivers have been taken into
consideration along with the tributaries and natural reservoirs which
were termed into “eastern and western group of rivers”. The water of
three rivers the Indus, Jhelum and Chenab has to go to Pakistan
whereas Water of Sutlej, Beas and Ravi are to be consumed by India.
The Eastern Rivers, whose use was exclusively given to India, flows
through well-defined legal territory which formed the part of the Indian
Union created by the partition of the British-India. While the western
rivers flowing through the disputed territory of Jammu and Kashmir
state. The IWT treaty giving exclusive rights to India over the use of
waters from eastern rivers for any purposes, but the scope of J&K over
western rivers is guided by IWT. At the time of the signing of IWT nobody
has taken care of this forgotten disputed land and people. Subsequently
the State of Jammu and Kashmir, which is mainly effected at the
8 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
benefits of the two countries, could utilize through residual benefits of
its resources to the optimum and deficits caused by the two agreeing
parties.
The IWT was a first bilateral approached to begin the relation between
two countries. Though IWT was cordially welcomed in both countries
and also protected all water rights of both parties. Subsequently the
Pakistan has built Mangla and Tarbela dams and several storage
facilities on Indus, Jhelum and Chenab rivers and India also has built
various Dams and Barrages on Sutlej, Beas and Ravi Rivers. It is
unfortunate that Srinagar, Muzaffarabad and Gilgit governments have
failed to defend the manner and extent to which the people of Jammu
and Kashmir are entitled to have a role in the use of their water
resources at Mangla (Pakistan administrative Kashmir), Salal, Dulhasti,
Uri, (Indian administrative Kashmir) and Diamir Basha Dam in Gilgit
(Pakistan has illegally made his province). Yet, India and Pakistan are
not acceding to the water and electricity requirements in both sides of
Kashmir. Also both countries are never talking about the helpless people
of Kashmir and their legitimate rights of water from their own rivers.
The Jhelum, Chenab and Indus Rivers all flow through Jammu and
Kashmir, yet under the IWT the state must seek permission from Indus
water commissioners before any economic development.
The treaty which was carried out in the best interest of both nations
has, however, deprived the Jammu and Kashmir state to use its own
water resources and thereby severely affected the developmental process
of the state. Conforming to the treaty criteria, State cannot fully exploit
the water potentialities of the Indus, Jhelum and Chenab rivers.
Nevertheless Kashmir is well-known for its renewable resources all over
the world. The main asset of Jammu & Kashmir state is its water
resources. There are near about twenty (20) rivers flowing through
Jammu & Kashmir.
These rivers are mentioned as below:
9 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
1)-Chenab River
2)-Doda River
3)-Dras River
4)-Indus River
5)-Jhelum River
6)-Lidder River
7)-Markha River (India)
8)-NalaPalkhu
9)-Neelum River
10)-Nubra River
11)-Ravi River
12)-Saltoro River
13)-Shingo River
14)-Sind River
15)-Suru River (Indus)
16) Shyok
17)-Tawi River
18)-Tsarap River
19)-Yapola River
20)-Zanskar River
Of above all the rivers there are four rivers on which power projects are
established .These rivers are:-
• Chenab River.
• Indus River.
• Jhelum River.
• Ravi River.
Chenab River:-The Chenab River is a major river of Jammu and
Kashmir and the Punjab in Pakistan. It forms in the upper Himalayas in
the Lahaul and Spiti district of Himachal Pradesh, India, and flows
through the Jammu region of Jammu and Kashmir into the plains of
the Punjab, Pakistan. The waters of the Chenab are allocated
to Pakistan under the terms of the Indus Waters Treaty.
Indus River:-The Indus River is a major river which flows
through Pakistan. It also has courses through western Tibet (in China)
and India. Originating in the Tibetan plateau in the vicinity of Lake
Mansarovar, the river runs a course through the Ladakh region
of Jammu and Kashmir, Gilgit, Baltistan and flows through Pakistan
in a southerly direction along the entire length of Pakistan to merge into
the Arabian Sea near the port city of Karachi in Sindh. The total length
of the river is 3,180 km (1,980 mi). It is Pakistan's longest river. The
river has a total drainage area exceeding 1,165,000 km
2
(450,000
sq mi). Its estimated annual flow stands at around 207 km
3
(50 cu mi),
making it the twenty-first largest river in the world in terms of annual
flow. Zanskar is its left bank tributary in Ladakh. In the plains, its left
bank tributary is Chenab which itself has four tributaries, namely,
Jhelum, Ravi, Beas and Satluj.Its principal right bank tributaries
are Shyok , Gilgit, Kabul, Gomal and Kurram. Beginning at the heights
10 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
of the world in a spring and fed with glaciers and rivers in the
Himalayas, the river supports ecosystems of temperate
forests, plains and arid countryside.
River Jhelum:-The River Jhelum rises from a spring at Verinag situated
at the foot of the PirPanjal in the south-eastern part of the valley
of Kashmir in India. It flows through Srinagar and the Wular
Lake before entering Pakistan through a deep narrow gorge. The Neelum
River, the largest tributary of the Jhelum, joins it, at
Domel Muzaffarabad, as does the next largest, the Kunhar River of
the Kaghan valley. It also connects with rest of Pakistan and Pakistan
occupied Kashmir on Kohala Bridge east of Circle Bakote. It is then
joined by the Poonch River, and flows into the Mangla Dam reservoir in
the district of Mirpur. The Jhelum enters the Punjab in the Jhelum
District. From there, it flows through the plains of Pakistan's Punjab,
forming the boundary between the Chaj and SindhSagar Doabs. It ends
in a confluence with the Chenab at Trimmu in District Jhang. The
Chenab merges with the Sutlej to form the River which joins the Indus
River at Mithankot.
Ravi River:-The Ravi is a trans-boundary river flowing through North-
western India and eastern Pakistan. It is one of the six rivers of
the Indus System in Punjab region (name of Punjab means "Five Rivers.
After the partition of India in August 1947, the waters of the Ravi River,
along with five other rivers of the Indus system (Beas, Sutlej, Chenab,
Jhelum and Indus), divided India and Pakistan under the Indus Water
Treaty, which was facilitated by the “World Bank”. Subsequently, Indus
Basin Project has been developed in Pakistan and many Inter Basin
Water Transfers, Irrigation, Hydropower and multipurpose projects have
been built in India
11 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
EXISTING AND UPCOMING POWER PROJECTS AND
THEIR CAPACITY.
STATE SECTOR Configuration Installed Capacity in MW
Name of Power House
JHELUM RIVER BASIN
Lower Jhelum 3 x 35 105
Upper Sindh 2x11.3 22.6
Ganderbal 2x3+2x4.5 15
Upper SindhII 3x35 105
Pahalgam 2 x 1.5 3
Karnah 2x1 2
CHENAB BASIN
Chenani-I 5x4.66 23.30
Chennai-II 2x1 2
Chenani-III 3x2.5 7.50
Bhaderwah 2 x 0.5 1
Baglihar 3x150 450
RAVI BASIN
Sewa-III 3x3 9
INDUS BASIN
Iqbal 3x1.25 3.75
Hunder 2x0.20 0.40
Sumoor 2x0.05 0.10
Igo-Mercellong 2x1.50 3
Haftal 2x0.50 1
Marpachoo 3x0.25 0.75
Bazgo 2x0.15 0.30
Stakna 2x2 4
Total 758.70 Mw
CENTRAL SECTOR
Salal HEP 6x115 690
Uri –I 4x120 480
Dul-Hasti 3x130 390
Total 1560
12 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
LOWER JEHLUM
The Lower Jhelum Hydel Power Project (LJHP) has a distinction. It is the
last power project that PDC owns on the Jhelum. Beyond this, it is a
roaring Jhelum that NHPC taps at Uri-I and Uri-II, shortly before it
gushes across the LoC. Even since the project was commissioned in
1978, LJHP has stopped generations only once for a prolonged duration.
That was in April 2001 when its fore bay was damaged and within a
year it was back to work. There have been some minor snags that
disrupted generation; the last one was in May 2011 when two of the
three units stopped working for a few days. Conceived in late sixties, the
LJHP was taken up for implementation in 1970. With an installed
capacity of 105 MW, its three units of 35 MW each are currently
generating only 90 MW. The first one was commissioned in February
1978 and was followed by second unit in January 1979 and the last
unit in November 1979. While the locals managed most of the civil
works, mostly by the Tirath Ram Ahuja Construction Company and
Continental Constructions Limited (now Continental Construction
Projects Ltd), the electro-magnetic part of the project was managed by
Bharat Heavy Electricals Limited (BHEL). Housed on Jhelum’s gorgeous
banks, the power house is nested in lush green mountains. The journey
towards the power house starts at the right side of river Jehlum at
Gantamulla wherefrom the 9-km water conductor takes off. The 7700
cusecs canal snakes around the foothills till it reaches the barrage. Its
length is 371 feet and has the capacity of holding 80000 cusecs of flood
discharge. Inside it is a spill way, a fish pan and under knives which
function as garbage cutters. It has 10 bays of 13 meters each. A silt
ejector is located around 2.5 km away. A few kilometers ahead is the
balancing reservoir used for maintaining the requisite level of discharge.
It is an earthenware water reservoir 1036 meters long with an average
width of 183 meters. The canal then travels three more kilometers to
reach the forebay where from the penstocks take off. The project has a
head of 202.72 meters. It has three penstocks feeding three units.
13 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
UPPER SINDH 1
The indigenously built power station has never stopped working with
returns of several times of the investment made in constructing the
project, making some to call it a golden goose. A Kashmir Life report.
The dusky village of Sumbal, 17 kms from Kangan, has one of
Kashmir’s prized assets located on Sindh rivulet – a power project.
While it distinguishes the hamlet from its entire neighborhood, the
project itself is unique. It is Kashmir’s first locally designed and
constructed power house that is running uninterrupted since it was set
up with no complaints and no major issues unlike its cousins
downstream. Every year, it evacuates energy to the grid which is five
times the investment that the state government made in it in seventies.
In a way, yes, it is a golden goose, said a young engineer overseeing its
operations. “It trips only when discharge goes up and we put it off.”
Conceived in sixties, the work on the project started in the
summer of 1965. Most of the civil works were managed by local
contractors who laid the canal and set up colonies and the main power
house buildings. Part of the civil works were executed by the Build
Right, a Kolkotta based firm. The electrical part of the plant was directly
managed by Bharat Heavy Electrical, then Heavy Electrical only. The
twin units went into generation in December 1973 and Jun1974,
respectively. Projects water conductor takes off at Kulan. The canal goes
underground for 396 meters to enter the balancing reservoir – where the
PDC is keen to develop a tourist facility owing to the availability of vast
stretch of land running parallel to the highway. The gravitation canal is
a long 11.6 km structure that zig-zags the foothills falling in the Sindh
forest division to reach the forebay. In between, it passes through 400
meters of tunnel and a duct near Gund. It has a single penstock with a
head of 149 meters that bifurcates to run the two Francis vertical
turbines at Sumbal. What is interesting is that the two turbines are of
the capacity of 11.3 MW each but the discharge is less. When the
project was ready and the BHEL was asked to supply the two 7 MW
turbines, they responded saying the state government will have to wait
14 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
for two years, Singh said. The government was desperate to see the
project taking off and purchased two machines of 11.3 MW with an idea
that it will be later upgraded.”
But the capacity of the canal was the main limitation. Since it could
only get 420 cusecs of water, there was no possibility of generating more
than 14 MW. So the additional capacity of the machines could not be
utilized.
Last year, however, the PDC improved the canal by upgrading its
capacity. Now it can bring in 510 cusecs which has improved
generations. The project generates 17 MW. The project could generate
more but planners have hit a major problem – the capacity of the tunnel
cannot be improved at all because it was designed for water required for
14 MW only. By now the USHP-I must have generated more than 3100
million units. Though the machine is perfectly fine but the PDC is keen
to prolong its life. This has become all the more necessary as BHEL says
it does not have many of the spares of the machinery because the
technology has improved. Already RMU has been approved at a cost of
Rs 24.99 Crore that will add to its capacity by around 3 MW. The Power
Finance Corporation has approved Rs16 Crore funding as early as
January 2006.Some of the spares have started landing on the site.
Initially the hydraulic governors are being replaced by electronic ones.
SF6 brakers would be replaced and excitation systems would be
installed. Apparently it would be at the latter stage that the functional
turbines would be replaced because the RMU will improve its condition,
and output to add to its life.
Interestingly, the April 1970 DPR re-appropriated the fund requirement
of the project, and accessed by Kashmir Life, put a cost of Rs 10.72
Crore on the project. Engineers say it might have taken a bit more
because of price escalations. SERC has put its cost at Rs 69.12 Crore
and its tariff at Rs 0.70 per unit. The project generated 337.98 lakh
units in 2010-11 and 821.21 lakh units in 2011-12. [1]
15 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
INDUS WATER TREATY
On September 19, 1960, India and Pakistan has signed Indus Water
Treaty (IWT) over the water sharing of Indus basin. The water of Indus
basin is divided between eastern and western rivers. The Eastern
Rivers, whose use was exclusively given to India, flows through well-
defined legal territory which formed the part of the Indian Union created
by the partition of the British-India. While the western rivers flowing
through the disputed territory of Jammu and Kashmir. But the IWT
gives exclusive rights to India over the use of waters from eastern rivers
for any purposes; however the scope of J&K over western rivers is
guided by IWT, which has snatched J&K’s inherent rights over water.
Subsequently the State of Jammu and Kashmir, which is mainly
effected at the benefits of the two countries, could utilize through
residual benefits of its resources to the optimum and deficits caused by
the two agreeing parties. Due to restrictions imposed by IWT on tapping
of water resources, the Jammu & Kashmir has been unable to grow to
the optimum potential of its agriculture and electricity sectors.[4]
NATURE OF AGREEMENT BETWEEN STATE AND CENTRAL
GOVERNMENT AGENCIES.
1. The State of Jammu and Kashmir, being the mountainous state is
deficient in major renewable resources other than water and forest. In
fact nature has endowed unending supply of water resources in the
state which are the backbone of J&K State’s economy. The Water bodies
of the J&K State have enormous economic potential in the shape of
hydro power generation, irrigation to enhance the agriculture, artificial
lakes and pounds for healthy growth of tourism. Unfortunately, these
rivers water has not been adequately harnessed because of inadequacy
of funds, political instability and lack of the will are the main factors for
utilization of water resources in the State. Some restrictions are imposed
by the IWT, 1960, because J&K state cannot exploit its water resources
in best manner. However taking together all these factors have resulted
in an economic backwardness of the state. In the past five decades none
of the work has done in J&K state to quantify the impact of IWT, neither
16 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
from power department nor from agriculture department. From last
couple of years by the thought provoking efforts of some economists of
J&K state, this issue was raised at state level. Now there have been
growing concern and anger in the state over the negative consequences
of IWT on state economy. Both official and public circle in the J&K state
are pleading the review of IWT, according to the requirements of the J&K
state immediately.
The water resources of Indus Basin managed between India and
Pakistan within the framework of the Indus Waters Treaty. As per the
terms and conditions of the IWT, six rivers have been taken into
consideration along with the tributaries and natural reservoirs which
were termed into “eastern and western group of rivers. The water of
three eastern rivers the Indus, Jhelum and Chenab has to go to
Pakistan whereas Water of Sutlej, Beas and Ravi are to be consumed by
India. The Eastern Rivers, whose use was exclusively given to India,
flows through well-defined legal territory which formed the part of the
Indian Union created by the partition of the British-India. While the
western rivers flowing through the disputed territory of Jammu and
Kashmir state. The IWT treaty giving exclusive rights to India over the
use of waters from eastern rivers for any purposes, but the scope of J&K
over western rivers is guided by IWT. At the time of the signing of IWT
nobody has taken care of this forgotten disputed land and people.
Subsequently the State of Jammu and Kashmir, which is mainly
effected at the benefits of the two countries, could utilize through
residual benefits of its resources to the optimum and deficits caused by
the two agreeing parties.
The IWT was a first bilateral approached to begin the relation between
two countries. Though IWT was cordially welcomed in both countries
and also protected all water rights of both parties. Subsequently the
Pakistan has built Mangla and Tarbela dams and several storage
facilities on Indus, Jhelum and Chenab rivers and India also has built
various Dams and Barrages on Sutlej, Beas and Ravi Rivers. It is
unfortunate that Srinagar, Muzaffarabad and Gilgit governments have
17 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
failed to defend the manner and extent to which the people of Jammu
and Kashmir are entitled to have a role in the use of their water
resources at Mangla (Pakistan administrative Kashmir), Salal, Dulhasti,
Uri, (Indian administrative Kashmir) and DiamirBasha Dam in Gilgit
(Pakistan has illegally made his province). Yet, India and Pakistan are
not acceding to the water and electricity requirements in both sides of
Kashmir. Also both countries are never talking about the helpless people
of Kashmir and their legitimate rights of water from their own rivers.
The Jhelum, Chenab and Indus Rivers all flow through Jammu and
Kashmir, yet under the IWT the state must seek permission from Indus
water commissioners before any economic development.
The treaty which was carried out in the best interest of both nations
has, however, deprived the Jammu and Kashmir state to use its own
water resources and thereby severely affected the developmental process
of the state. Conforming to the treaty criteria, State cannot fully exploit
the water potentialities of the Indus, Jhelum and Chenab rivers.
2. According to Kashmir Civil Society, the Salal, Uri, Dalhoste and the
Sewa II power Project are under N.H.P.C and generate 1680 MW of
electricity. The state is producing 308 MW from projects regulated and
run by the Jammu & Kashmir State Power Development Corporation
(JKSDC), falling under the state sector excluding the Baglihar project
which produces another 758 MW. The Total requirement, both domestic
and industrial, of the state is 2500 MWs Jammu and Kashmir State
Government purchase power from the N.H.P.C worth Rupees Three
Thousand Crores despite having the potential of generating 30,000 MW
Civil Society found that the power sharing and the very basis of N.H.P.C
as illegal after filling the PIL, it was revealed that there was no
agreement between N.H.P.C and the state Government because the
N.H.P.C never sought a license for setting up any of the Hydro Projects.
This, therefore, amounts to fraud and illegal occupation of land
resources of the state. Due to the corruption the misplacement of a very
important file dating back to 1975 pertaining to the agreement between
the state and the centre for execution, energy sharing and transfer of
18 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
salal power project on the chenab to J&K has prompted the Civil
Society group to approach the Court. It has found that the then
chairman of National Hydro- Electric Power Corporation (NHPC.), the
only state subject of J&K to head the corporation and the ten state
power commissioner were involved in deliberately misplacing the records
due to which the state suffered a whooping loss of well over Rs 10000
Crores the value of energy generated by Salal per annum over the years.
Due to negligence on the part of officials who were responsible for safe
maintenance of significant agreement which were lost because of which
state suffered a whooping loss of Rs 10000 Crores which is confirmed by
Minister of State for P.H.E, Flood Control and irrigation Minister, Mr. Taj
Mohi-ud-din. Mr. Taj Mohi-ud-din also confirmed that agreement had
been signed on a 50-50 partnership basis which was not implemented
and due to which the state could not get back salal in 2002 as per the
agreement.
3. Civil Society has also found that J&K Government has given away
1.20 Lac Kanal of land to Punjab for Their Dam and as per the
agreement signed with Punjab, J&K was to get 20 percent water and
power from the project. But so far Kashmir has not got a single
Megawatt of electricity and Kashmir should be compensated for the
same. Besides, power sharing with N.H.P.C and other central
Government agencies, the people of the state also regret the Indus Water
Treaty (IWT) and term it as sheer exploitation of the state’s resources for
the benefit of the people of India and Pakistan.
4. Experts believe that the I.W.T. is responsible for the present power
crisis in the state while the benefits are being reaped by both India and
Pakistan. The treaty ensures prosperity to others at the cost of the
state’s population, they argue. The treaty is purely flawed, signed by
then Indian Prime Minister Jawahir Lal Nehru and the then Pakistan
President Ayub Khan in 1960, it is a big trick played on the Jammu &
Kashmir people, Kashmiris’ in particular. The two countries are minting
money from the river of Jammu & Kashmir while the state is yet to be
properly compensated for its water resources, Prof Dost Mohammad
19 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
Khan, Dean Management studies, Baba Ghulam Shah Badshah
University (BGBU) Rajouri said. Professor A.M. Bhat, who heads the
Department of Economic at Kashmir University, feels there are other
reasons which compound the state’s power problems. He feels to realise
the full potential of power generation in Jammu and Kashmir, the state
needs an investment of US $ 20 Billion for achieving the target of
generating 20000 MW of electricity.
20 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
REVIEW OF RELATED LITERATURE:
The literature survey is the most simple and fruitful basis of formulating
precisely the research problem. For this purpose the researcher has to
review the works already done by others. The various studies came into
being and few of them are discussed here:
1. Hilal Ahmad Shah in his research titled “Role of Jammu And
Kashmir Water Resources in Indian Economy” published in Golden
Research Thoughts Volume 2, Issue. 7, Jan. 2013 highlights the role of
water resources in the development of state economy. According to him,
the economic prosperity and social well-being of a country largely
depends both directly or indirectly on its water resources. From time
immemorial the picturesque state of Jammu and Kashmir is known all
over the world for its economic prosperity.
What makes Jammu and Kashmir so special? Many things, but
especially its water resources such as snowcapped mountains,
crisscrossed by rivers and studded with lakes, springs, canals which
originate from this state, the role of water resources of Jammu and
Kashmir is very important for the development of many sectors of state
economy like agriculture, hydroelectricity, food, construction, transport,
minerals, industry etc.
2. Erin Blankenship in his research paper Kashmiri Water: Good
Enough for Peace? He suggests that, ”Kashmir is at the headwaters for
the Indus Rivers as well as the broader conflict between Pakistan and
India. Its situation is inextricable from that of its water, and its future
depends on finding an equitable, sustainable outcome for the region’s
most valuable resource. Failing to address the acute and escalating
water issues will generate increasingly dire consequences, particularly
considering the rising pressures of population growth and climate
change. Integrated water cooperation and sharing between Pakistan and
India is important enough in its own right, but perhaps finding a new
way to navigate Kashmir’s waters will provide the path to peace that the
people of Jammu Kashmir, its parent countries, and the wider
international community seek. Due to restrictions imposed on tapping of
21 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
water resources, in conjunction with faltering policies of successive state
governments, Kashmir has been unable to grow to the optimum
potential of its agriculture and electricity sectors, its most vital needs for
economic and human development. The Treaty permits building storage
aggregating 3.6 million acre feet (MAF) on the three rivers of the Indus,
Jhelum and the Chenab. This capacity is shared between hydropower,
flood moderation and general storage for non-consumptive uses. The
Treaty further permits additional irrigation of only 1.21 lakh hectares
since its effective date of April 1st, 1960. These restrictions act as a
chokehold on Kashmir’s capacity for progress. As far as irrigation goes,
while about 80 percent of Pakistan’s cultivated areas are irrigated,
Kashmir has only been able to do about 10 percent. In Pakistani
Kashmir only 13 percent of the land is under farming, but provides the
livelihood for close to 84 percent of the households. Of its enormous
hydroelectricity potential estimated at around 15,000 MW, Kashmir has
been able to harness barely 10 percent, a critical barrier to the area’s
growth. Over 90 percent of Kashmir’s capacity comes from hydroelectric
plants. There is little scope for any other forms of power generation in
the state since there are few feasible sites for plants and the area’s
difficult topography makes the transport of raw materials complicated
and costly. Further, each of the state’s power projects begun and
currently under construction has become controversial due to the
competing agendas of the parent states.[47] As India and Pakistan battle
over the legalities of the technical engineering and the Treaty details for
each proposed dam, spillway, and plant, Kashmir waits.
3. According to Erin Blankenship, Kashmir’s untapped potential
for its energy and agricultural growth represents the equally foregone
possibility for bridging important gaps in the ongoing crisis. A 2002
report “Reshaping the Agenda in Kashmir” by Waslekar comments that
the disputed territory’s potential could help to transform it “from a valley
of death and destruction to a center of excellence in…engineering.”
Other experts agree in the potential that Kashmir’s geography offers.
Amending the limitations of the Indus Waters Treaty so that sustainable
22 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
development is integrated throughout the area would greatly improve
the hydroelectricity sector’s potential, improve irrigation facilities and
regulations which would in turn boost agricultural growth, give rise to
employment opportunities, help attract private investment, and in
general pave the way for a healthy industrialization of the state.
Agreement on a joint development strategy for the Indus Waters Basin
that would implement sustainable projects would thus be a major
contribution to economic growth, which according to multiple sources is
a top priority in securing peace for the region. Other positive
developments could build from the economic growth’s impact on
stability and the water sharing and joint development structure, such as
a mutual confidence in peaceful and cooperative means of solving
disputes.[48],[49]
4. Economic Analysis of states A study of Northern & Central
states of India by PHD Research Bureau. Kashmir is at 7th rank in its
Aggregate Scores of States registering high fiscal deficits, high
unemployment and poverty and a weak social sector. Economic growth
registered is merely 4.92 while the cost of doing business 9.9 which is
highest in comparison to nine northern states, fiscal performance is also
very low, it is the second lowest after HP, yield of food grains is
satisfactory but the infrastructure is the poorest among all states,
unemployment is highest in the state as compared to nine northern
states of the country besides social sector.
State Disparity Index
A wide disparity was observed amongst the states’ aggregate scores.
While Delhi outperforms all states by far at 65.15, Haryana and Punjab
post relatively low scores at about 53. The rest of the states are within
the range of 40-50 points, while MP lags far behind at 38.34.
Only Delhi, Haryana and Punjab lie above the mean value of 47.02,
whereas J&K with 42.55 lie below the average level.
States like Delhi and Haryana have shown strong fiscal heath, while
J&K, HP and UP are poor performers in this regard. Rajasthan, J&K and
UP have posted the lowest literacy rates among the states.
23 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
5. According to the J&K State Power Development Corporation
JKSPDC the power potential of the State is estimated to be around
22,000MW, but it is far from realizing its full potential. The state has a
power potential of generating near about 30,000MW. The projects
handed over to NHPC on power sharing agreement basis are presently
completely under the control of NHPC and no consideration is being
given to the State in terms of power supply as per the earlier
agreement. In fact power generated within the State by NHPC is being
fed to the Northern Grid from where J&K is purchasing its power
requirement. The Northern grid in its turn is catering to states like
Punjab, Haryana, Delhi, Chandigarh, Utter Pradesh and Rajasthan
apart from J&K and as the mercury soars in north India, so does the
power needs of the States resulting in each state vying each other for
power. In J&K the grim power scenario is the direct result of low self-
sufficiency in power generation, transmission and generation losses and
most importantly the years of exploitation indulged by NHPC. Very
recently one of the senior ministers within the State cabinet has raised
fingers on the role of NHPC in the missing cabinet order related to Salal
power project. The cabinet subcommittee constituted by the state
government has also revealed that J&K has made an excess payment of
Rs. 2340 Crores on power purchases from Salal project. It is said that as
per the agreement between J&K government and NHPC, J&K was
entitled to 47 percent of power from Salal including 35 percent NSG at
bus bar rate (generation cost) and 12 percent of royalty cost. But the
role played by NHPC in the State of violating all norms and agreements
only proves the fact that NHPC has no legal sanctity to function in J&K.
While the government may find it easy to pass the buck for its power
woes on NHPC, it cannot absolve itself for not delivering adequately on
the power front. J&K Power Development Corporation Limited was
incorporated as Private Limited Company in 1995 to take over, execute,
complete, operate and maintain all power stations and power projects in
the State. The Corporation presently has only 20 hydroelectric projects
with installed capacity of 758.70 MW located in various districts of J&K
24 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
including 450 MW Baglihar Hydroelectric project. The State government
has yet not come out with any legislation regarding taking over the
power projects being run within the State. There is also at the same time
need to review the existing power policy to make it more investor
friendly. This is all the more essential in order to rope in greater number
of private players for investing and sharing their expertise in power
sector. It should also explore the prospects of taking up development of
power projects in the state on BOOT (Build, Own, Operate and Transfer)
basis in the manner similar to the recently awarded Rattle Hydroelectric
power project on BOOT basis through tariff based competitive bidding.
At the same time, J&K should shed the moulds of despondency
when it comes to revenue generation and power tariffs. The Committee
at the Centre headed by former Comptroller and Auditor General V. K.
Shunglu to recommend ways to reduce losses suffered by distribution
has recommended the need to take action against inactive State
Regulatory Authorities which actually set the tariff. The state of J&K
having hostile terrain already suffers from huge amount of transmission
and distribution losses. On top of it, the power tariff collection record of
the state is abysmally dismal in the country with rampant power theft
and tampering of loads. If the government is really serious about
reforms in power sector, it would have to come out with a multipronged
strategy to address all these issues. Otherwise there will be no succor
for ordinary citizens and angry citizens taking to streets to protest
against power cuts would continue to remain a common sight every
year.
6. With minor exception, the treaty, gives India exclusive rights over
the waters of the Eastern Rivers and its tributaries. Similarly Pakistan
has exclusive rights over the use of the West flowing rivers, “But where
are we (people of Jammu and Kashmir)? How much have we earned
from the treaty? It seems the two countries signed it only to engineer
their economic growth from the waters of Jammu & Kashmir,” Dost
Mohammad rules. Power generated through the power projects run by
25 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
N.H.P.C is being supplied to Punjab, Haryana, Delhi, Himachal Pradesh,
and Chandigarh and as far as Utter Pradesh and Rajasthan.
7. NAZAKAT AND NENGROO. With the rapid growth of population
in J&K from 2.5 million 1960 to 10.5 million in 2011, urbanization and
industrial revolution, electricity demand has increased in Jammu and
Kashmir State. Systematic development and utilization of power
resource, is the main importance to meet the increasing exigency of the
State. In fact the requirements of power and its availability have come to
be recognized as the surest index of a state’s overall development in big
way. As compared to hydel generation, thermal generation cannot be a
solution to meet the increasing energy needs of the states, as it is
located away from the pit heads. The increase in demand for power
means the economy is growing and is leading to modernization,
industrialization and improvement in basic amenities culminating into
quality life of the people. The State is not rich in the non-renewable
sources of fossil fuels which could be used for energy generation but
there are huge renewable sources of energy in the form of water
resources which can meet the demand of the people.
8. Economic Analysis of states a study of Northern & Central
states of India by PHD Research Bureau. The state of Jammu and
Kashmir with smallest economic size of $7.36 Billion as against 82.04$
billion in UP showing 6.28% growth and with a third lowest per capita
income of 27250 among all northern states as against Delhi Rs117,000.
Primary sector contributes 25.82% with an annual growth of 1.79%. The
state contributes 1% to India’s GSDP while Uttar Pradesh contributes
the highest among the states at 9%. The secondary sector contributes
about 28.29% to GSDP of state of Jammu and Kashmir. Tertiary sector
contributes around 46% in GSDP. The growth rate of the services sector
is 5% which is rather stagnant in state.
It is observed that services sector is an important growth driver and the
manufacturing sector is relatively stagnant while agricultural
productivity varies significantly in the state.
26 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
The composite performance of state under the parameters of Investment
Environment, Macro-economy, Agriculture, Consumer Markets, Primary
Education, Infrastructure, Governance and Primary Health. The state
has scored3.4out of 10 (10 being highest and 0 being lowest).
Scores on Socio-economic Parameters
States
Parame
ters
Invest
ment
Enviro
nment
Macro
Econo
my
Agric
ultur
e
Cons
umer
Mark
ets
Primar
y
Educa
tion
Infrast
ructur
e
Gover
nance
Prima
ry
Healt
h
Compo
site
Score
4.3 4.0 1.2 3.1 4.4 5.1 1.1 3.8 3.4
The competitiveness report ranked J&K lowest preceded by UP and
Rajasthan.
Total expenditure comprises three important parameters, viz,
Development Expenditure, Social Sector Expenditure and Capital
Outlay. J&K spends the maximum in development and social sectors
with 36.4% and 18.6% of GSDP respectively.
J&K is the most indebted state with a debt-GSDP ratio of 67% followed
by HP at 53.2% and UP at 45.8%.
NAZAKAT AND NENGROO. Though the J&K State has estimated the
total Hydel power potential of the State at 20,000 MWs, of which 16480
MWs have been identified. The harnessed hydro-electricity potential
constitutes just 7.5 percent of the assessed potential, with 92.5 percent
remaining unharnessed. The state has only managed around 2500 MW
because the treaty disallows the J&K state to construction of storage
reservoirs on three western rivers except run-of-river projects. There are
also further restrictions on the water storage level. However total
assessed power potential is on the basis or “run-of-river” schemes with
some small live storage capacity in the upper reaches of the three
western rivers. This type of projects not only raises the construction cost
of the projects but also affects adversely the cost-effectiveness of power
generation from these projects but also generation capacity is very low.
Cost of run-of-the-river projects using small head fall is reported to be
about 75 per cent higher than hydel projects using high head fall. These
high cost hydel projects generate electricity much below their installed
27 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
capacity. In addition to this, though the hydro potential of the State is
about 20,000 MW, annual energy loss works out to 60,000 million units
valuing Rs. 15,000 Crores at Rs. 2.50 per unit per year, which is
substantially less than the prevalent market rate”.
1. Chenab River is leading source of power potential (as shown in figure 2)
of J&K state but there is no effective storage on main Chenab up to
Kishtwar. Also there is no live storage on Salal project and only weekly
storage at Baglihar 0.3MAF, Dulhasti 0.007 MAF and storage of 1.1MAF
is proposed Bursar tributary of Chenab .Thus J&K state is able to
identify only 16480 MWs and out of the identified potential, only 2500
MWs have been harnessed, consisting of 758.70 MWs of J&K State
Sector from 20 power projects, 1680 MWs from three power projects
under Central Sector i.e. 690 MWs from Salal Hydel Electric Project, 480
MWs from Uri-I Hydel Electric Project, from Dulhasti 390 MWs and
17.50 MWs from two private sector projects. Fig. 1 depicts the identified
harnessed and under construction power potential by j & K and central
Government.
Fig. 1: Power Potential by J&K and Central Govt. Source: J&K State Hydroelectric Project
Development Policy 2011
The analysis of figure 1 shows that JKPDC and NHPC collectively
generating 2456.20 MWs hydro potential on three western rivers from
Jhelum, Chenab, Indus and Ravi also. It is revealed from the above
analysis that the actual power potential of Jhelum, Chenab, Indus and
28 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
Ravi are 3560, 10360, 2060 and 50 respectively. The harnessed
potential of these river basins are 750.1MWs, 1563.8MWs, 13.3MWs,
and 129 MWs respectively. The table further shows 570 MWs on
Jhelum, 450 MWs on Chenab, and 90.26 MWs on Indus are under
construction. Thus the analysis depicts that Chenab River has the
highest power potential but only 15.09 percent of it has been harnessed.
Similarly only0.0064 percent of Indus River and 21.07 percent of
Jhelum River has been harnessed.
Moreover, the main power generating projects Salal, Baglihar, Tulbul
and Kishanganga are in the state have become controversial due to the
Pakistan’s objection (as a violation of IWT). The projects end up having
long gestation periods and short working lifespan. Abrogating the Indus
Waters Treaty would provide greater benefits and open up several
avenues for unrestrained development of the state of Jammu &
Kashmir. It can:
? Improve hydro-electricity sector's potential as storage facilities could
be developed
? Pave the way for industrialization of the state
? Improve irrigation facilities which in turn would boost agricultural
growth
? Give rise to employment opportunities, which will indirectly keep a
check on external interference in state affairs
? Help attract private investments, propelling the state's position on
India's investment map.
While there is some progress in power generating sector, but shortage of
power continues to haunt the State and is becoming major constraint
for the development of inhibiting the growth of industry, agriculture and
tourism sector as well. During the past forty years, since the Indus
Treaty was signed, there has been sizeable increase in the State's
population also the standards and life style of living have changed.
Simultaneously, the State has witnessed a big leap in demand for
electricity.
29 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
Moreover the shortage of power in the state has not only been causing
problems for domestic consumption. As such there have been
fundamental changes in the ground situation, so far as the actual power
requirement of the State for domestic, agricultural and industrial uses,
is concerned. The greatest weakness is on the distribution front which
comes under the domain of the State. Aggregate Technical and
Commercial (AT&C) losses of State is about 72 percent and this had
made the PDD financially sick. In this context the State is also unable to
invest adequately in additional generation capacity as the State Power
Department is running in huge losses. Over the course of five decades,
some have suggested that the loss to the state in terms of development
of industry, power and agriculture could be nearly US$ 4.5 billion. This
loss of development is a fundamental question. If the entire power
potential of the state is to be utilized, the power generation can be run
as an industry on commercial lines and state can supply surplus power
to the entire region. Apart from IWT climate is another factor which is
hampering the state’s power potential. Being a mountainous states;
majority of rivers water are snow fed, the water discharge in different
rivers gets depleted in winter months from September to February. Thus
the installed power generation capacity goes down from 25 percent to 30
percent and state is obliged to run high cost gas based generation and
imports power from central government, northern grid.
To meet the growing demand of power the state has planned to achieve
6000 MWs electricity within next five years, to boost the industrial
sector of the state. But keep in mind presently the J&K and central
government collectively generating 2500 MWs on western rivers. Some
power projects which are already objected from Pakistan (as the
violation of IWT). Nowadays Pakistan is facing serious water and energy
crisis which are directly link with Indus Water Treaty. If J&K will try to
build more power projects or exploit more water from western rivers,
what would be the reaction of water stressed Pakistan? The result may
be armed conflict between India and Pakistan. Before turning into
conflict both countries again revisit the existed agreement.
30 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
Fig. 2: Jammu & Kashmir’s Energy Shortfalls (MUs).
Source: Economic Survey of J&K 2011-12
At other side J&K experienced increasing electricity shortages in terms
of peak demand each year from 2000 to halfway through 2003, resulting
in electricity shortages of between (11 and 16 percent and J&K’s power
generating capacity of 940 MW is far short of the 1169 MW peak
demand in 2002–2003. Moreover it is estimated that the state’s power
demand is likely to be increase 2,600 MW in 2012–13 and 5,500 MW by
2025–26. At these figures average shortage is 13800MU per year.
The energy shortfall in various years in J&K state is shown in figure 2.
The figure shows that from 2006-07 to 2010-11the actual demand has
increased from 11343 MUs to 16544 MUs respectively. The power
availability from J&K PDC and free received from NHPC has increased
from 1717.64 MUs to 3379.692 MUs over the years. Furthermore the
power shortfall has also been increased at an alarming rate. It means
both the market forces are growing at an increasing rate, resulting in
the continuous positive gap between the two.
As there is an increasing demand for power in J&K state. The
state has purchased power rest of the state especially from northern grid
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of central government. The power purchased from outside of the state by
J&K state in various years is shown in figure 3. The figure shows that
except in 2007-08 there was continuous increased in the power
purchased from 1999-00t0 2008-09 and it has almost doubled over the
years. It means that J&K has to pay a huge amount for power
purchasing from other state. Has the state been allowed to utilize its
water resources freely, the state could have been able to produce the
increased amount of electricity within the state and the huge amount of
money which it has to pay for purchasing the power outside the state
could have been invested for other developmental purposes resulting in
overall growth of the J&K state economy. Also because of its abundant
water resources it could have been able to generate surplus electricity
which it can export to neighboring states, resulting additional revenue
to the state.
The growth in power demand inadequate capacity addition has resulted
in power shortages which are affecting all the economic sectors.
Furthermore, power shortage is becoming a source of conflict and
instability especially during winter season in the state. It is easy to
understand in 2012 January, when a young man has lost his life and
two others injured when CISF personnel opened fire on Monday to
disperse the protesters agitated over power shortage in Boniyar area of
Baramulla district in the Kashmir Valley. Therefore, the core of the
Kashmiri discourse on the shortage of power is the distribution of water
resources that was agreed to between India and Pakistan through the
instrumentality of the Indus Water Treaty (1960).
Albeit, three main river basins of the state include Indus and its
tributaries, Jhelum and its tributaries, Chenab and its tributaries offer
great scope for generation of power through Hydroelectric plant. Since
power and water has become an intensive need for industrialization and
hence development, if some kind of raw material is available for
exploitation, it should to be utilized fully. Then optimal exploitation of
the available resources of the State would meet the State’s demand and
also will boost the overall economy of the state. Also estimated power
32 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
potential of the state is helpful to bring peace and stability in the
ongoing crisis in J&K State. As 2002 report “Reshaping the Agenda in
Kashmir” by Waslekar comments that the disputed territory’s potential
could help to transform it “from a valley of death and destruction to a
center of excellence in…engineering.
33 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
PROBLEM STATEMENT
This project is going to analyse the fiscal potential of hydro power
projects of Kashmir and analyze whether the hydro-electric projects will
have any significant impact on state economy which faces the
challenges of underdevelopment and unemployment. The research will
also analyse the impact of revenue on per capita income by relating it to
the state economic growth and development.
34 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
OBJECTIVES
1. To verify the total cost of all new hydro-power projects of Jammu and
Kashmir.
2. To analyse various model project and determine cost associated with
them.
3. To find out the revenue generation capacity by all projects.
4. To analyse the impact of projects developed by the state and the
central authorities
5. To analyse the impact of revenue on the economic growth and
development.
6. To ascertain the impact of electricity generated on industries.
7. To determine the standard of living of state subjects.
35 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
RESEARCH METHODOLOGY
The area selected for the study is Jammu and Kashmir. The
subject selected for the study is Fiscal potential of Hydro-power Projects
of Jammu and Kashmir. The study is an empirical study based on the
collection of relevant primary and secondary data. Efforts were made to
arrive at the logical conclusions that are very much closest to reality.
Primary data was collected from various authorities, experts, officials
and Kashmir civil society members through direct personal interview.
The major sources of secondary data used in the study was collected
from various annual reports, statistical reports, annual budgets,
published documents of government and non-government organizations,
Plan documents, Economic Surveys etc. not only this but also the data
was collected from various magazines, journals, newspapers and the
internet.
Data analysis:
The data collected for the study is properly compiled and tabulated and
put to test through various statistical tools like measures of central
tendency like mean, median. Use of percentages and correlation
analysis is also be used to draw logical inferences from the data
collected.
36 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
SCOPE OF STUDY:
The study covers all existing hydro power projects of Kashmir and all
upcoming projects in the valley, there are various stake holders like
Kashmir government, Kashmir civil society, various experts’ social
thinkers and researchers. The study will be spreading over a large
number of institutions and officials. This acts as a guide for future
researches.
Limitations:
? Time: The time for this study is limited.
? Problem of accessibility: It would be very difficult in approaching the
executives or the guests, as they would be busy, despite prior
appointments; they may be inaccessible at times being engaged
elsewhere.
37 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
EXPECTED CONTRIBUTION OF THE STUDY
This study is going to analyse the fiscal potential of all hydro
power projects of the state and look into the case of Kashmir’s
underdevelopment and analyze whether the hydroelectric projects would
be able to help the socio-economic growth and development of the state.
The study is intended to study the relationship between
hydroelectric projects and the development of indigenous industry,
micro, small and medium industries and major services like tourism,
transport, communication, banking, insurance, entertainment,
education and health and their role on the overall economic
development of the state of Jammu and Kashmir besides impact on per
capita income and living standards of people. The study will help in
capital budgeting decisions as it will provide insight into a model project
which will facilitate financial decision making in this regard. The study
shall also extend to an appraisal of the export potential of the State to
provide various services across the boundaries of the state and also
across the boundaries of the country. This study will also throw the light
on the contribution of various services on the state domestic product of
the state. The research is intended to highlight the problems that the
hydro sector of the state is confronted with and will also throw light on
the future growth prospects of the service sector in the state of Jammu
and Kashmir.
38 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
CLASSIFICATION OF POWER PROJECTS
Model of 1 MW Hydroelectric power project
Water power can be harnessed in many ways; tidal flows can be utilised
to produce power by building a barrage across an estuary and releasing
water in a controlled manner through a turbine; large dams hold water
which can be used to provide large quantities of electricity; wave power
is also harnessed in various ways. It is a technology that has been
utilised throughout the world, by a diverse range of societies and
cultures, for many centuries. Water can be harnessed on a large or a
small scale - Table 1, below outlines the categories used to define the
power output from hydropower. Micro-hydro power is the small-scale
harnessing of energy from falling water; for example, harnessing enough
water from a local river to power a small factory or village. This fact
sheet will concentrate mainly at micro-hydro power.
Large- hydro More than 100 MW and usually feeding into a
large electricity grid
Medium-
hydro
15 - 100 MW - usually feeding a grid
Small-hydro 1 - 15 MW - usually feeding into a grid
Mini-hydro Above 100 kW, but below 1 MW; either
stand-alone schemes or more often feeding
into the grid
Micro-hydro From 5kW up to 100 kW; usually provided
power for a small community or rural
industry in remote areas away from the grid.
Pico-hydro From a few hundred watts up to 5kW
39 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
Classification of hydropower by size.
KW (kilowatt) - 1000 Watts; MW (megawatt) - 1 000,000 Watts or 1000
kW
In the UK, water mills are known to have been in use 900 years ago.
Their numbers grew steadily and by the 19th century, there were over
20,000 in operation in England alone. In Europe, Asia and parts of
Africa, water wheels were used to drive a variety of industrial machinery,
such as mills and pumps. The first effective water turbines appeared in
the mid-19th century and it was not long before they were replacing
water wheels in many applications. In contrast to water wheels and the
early turbines, modern turbines are compact, highly efficient and
capable of turning at very high speed. Hydropower is a well-proven
technology, relying on a non-polluting, renewable and indigenous
resource, which can integrate easily with irrigation and water supply
projects. China alone has more than 85,000 small-scale, electricity
producing, hydropower plants. Over the last few decades, there has
been a growing realisation in developing countries that micro-hydro
schemes have an important role to play in the economic development of
remote rural areas, especially mountainous ones. Micro-hydro schemes
can provide power for industrial, agricultural and domestic uses
through direct mechanical power or by the coupling of the turbine to a
generator to produce electricity.
Micro-hydro power
Small-scale hydropower systems are those that generate less than 30
MW of electricity. They can be installed in small rivers or streams with
little or no discernable environmental effect on things such as fish
migration. All hydropower systems use the energy in flowing water to
produce electricity or mechanical energy. In small-scale hydropower,
run-of-the-river systems, which do not require large storage reservoirs,
are often used. For run-of-the-river systems, a portion of the river’s
water is diverted to a water conveyance, such as a channel or pipeline,
which delivers the water to a waterwheel or turbine. The moving water
rotates the wheel, which spins a shaft. The motion of the shaft produces
electricity, which can then be used directly or fed into the grid. Small-
scale hydro plants producing less than 30 MW of power are often
considered renewable Sources of electricity. Hydropower is a renewable
resource because it uses the continuous flow of rivers and streams to
40 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
produce electricity without using up the water resource. It is also a
clean technology because it does not rely on the burning of fuels like oil,
coal, or natural gas to produce power. There are different types of small-
scale hydropower developments. Micro-hydro has a power output of 100
kW or less, and is typically used to supply electricity on a residential
scale, for one or two houses. Mini-hydro has a power output of 100 kW
to 1 MW, and is typically used for a small factory or isolated community.
Small-scale hydropower is used for regional supply into a grid, and
produces 1 MW to 30 MW of power. Maintenance costs are generally
minimal; however production costs for a small-scale hydropower project
can vary, based on site conditions. A sufficient quantity of falling water
must be available in order to make this economically feasible. This
usually means that hilly or mountainous sites are best. To determine
the amount of power available at the site, one would need to determine
the “head” and “flow” of the water source. Head is the vertical the head
the better because one needs less water to produce a given amount of
power, and smaller, less expensive equipment can be used. Flow is the
quantity of water falling, usually determined in gallons per minute. A
higher flow rate can produce more electricity, and therefore be more
economically viable over many years. Most of the environmental impacts
of small-scale hydro developments can be avoided in part or in whole by
a good design and appropriate construction and operating practices.
Small scale hydropower developments do not take up much space and
rarely cause significant shoreline flooding or required river diversions.
Project design
Many companies offer standardized turbine generator packages in the
approximate size range of 200 kW to 10 MW. These "water to wire"
packages simplify the planning and development of the site since one
vendor looks after most of the equipment supply. Since non-recurring
engineering costs are minimized and development cost is spread over
multiple units, the cost of such systems is improved. While synchronous
generators capable of isolated plant operation are often used, small
41 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
hydro plants connected to an electrical grid system can use economical
induction generators to further reduce installation cost and simplify
control and operation. Micro-hydro plants may use purpose-designed
turbines or use industrial centrifugal pumps, connected in reverse to act
as turbines. While these machines rarely have optimum hydraulic
characteristics when operated as turbines, their low purchase cost
makes them attractive for micro-hydro class installations. Regulation of
small hydro generating units may require diversion of water around the
turbine, since the project may have no reservoir to store unused water.
For micro-hydro schemes feeding only a few loads, a resistor bank may
be used to dissipate electrical energy as heat during periods of low
demand. In a sense this energy is wasted but the incremental fuel cost
is negligible so there is little economic loss. Since small hydro projects
usually have minimal environmental and licensing procedures, and
since the equipment is usually in serial production, standardized and
simplified, and since the civil works construction is also small, small
hydro projects may be developed very rapidly. The physically small size
of equipment makes it easier to transport to remote areas without good
road or rail access. Micro-hydro installations can also provide multiple
uses. For instance, micro-hydro projects in rural Asia have incorporated
agro-processing facilities such as rice mills - alongside standard
electrification - into the project design.
SCHEME COMPONENTS
Figure 1 shows the main components of a run-of-the-river micro-hydro
scheme. This type of scheme requires no water storage but instead
diverts some of the water from the river which is channeled along the
side of a valley before being 'dropped' into the turbine via a penstock. In
figure 1, the turbine drives a generator that provides electricity for a
workshop. The transmission line can be extended to a local village to
supply domestic power for lighting and other uses.
42 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
Figure 1: Layout of a typical micro hydro scheme
Description of Small Hydro Power Plants
A small hydro generating station can be described under two main
headings: civil works.
And electrical and mechanical equipment.
1. Civil works
The main civil works of a small hydro development are the diversion
dam or weir, the water passages and the powerhouse. The diversion
dam or weir directs the water into a canal, tunnel, penstock or turbine
inlet. The water then passes through the turbine, spinning it with
enough force to create electricity in a generator. The water then flows
back into the river via a tailrace. Generally, small hydro projects built
for application at an isolated area are run-of-river developments,
meaning that water is not stored in a reservoir and is used only as it is
available. The cost of large water storage dams cannot normally be
justified for small waterpower projects and consequently, a low dam or
diversion weir of the simplest construction is normally used.
Construction can be of concrete, wood, masonry or a combination of
these materials. Considerable effort continues to be spent to lower the
cost of dams and weirs for small hydro projects, as the cost of this item
alone frequently renders a project not financially viable.
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Small Hydro Background
The water passages of a small hydro project comprise the following:-
An intake which includes trash racks, a gate and an entrance to a
canal and penstock or directly to the turbine depending on the type of
development. The intake is generally built of reinforced concrete, the
trash rack of steel, and the gate of wood or steel. A canal, tunnel and/or
penstock, which carries the water to the powerhouse in developments
where the powerhouse is located at a distance downstream from the
intake. Canals are generally excavated and follow the contours of the
existing terrain. Tunnels are underground and excavated by drilling and
blasting or by using a tunnel-boring machine. Penstocks, which convey
water under pressure, can be made of steel, iron, fiberglass, plastics,
concrete or wood. The entrance and exit of the turbine, which include
the valves and gates necessary to shut off flow to the turbine for
shutdown and maintenance. These components are generally made of
steel or iron. Gates downstream of the turbine, if required for
maintenance, can be made of wood.
2. Electrical and mechanical equipments
The primary electrical and mechanical components of a small hydro
plant are the turbine(s) and generator(s).
A number of different types of turbines have been designed to
cover the broad range of hydropower site conditions found around the
world. Turbines used for small hydro applications are scaled-down
versions of turbines used in conventional large hydro developments.
Turbines used for low to medium head applications are usually of the
reaction type and include Francis and fixed and variable pitch (Kaplan)
propeller turbines. The runner or turbine “wheel” of a reaction turbine is
completely submersed in water. Turbines used for high-head
applications are generally referred to as impulse turbines. Impulse
turbines include the Pelton, Turgo and cross flow designs. The runner of
an impulse turbine spins in the air and is driven by a high-speed jet of
44 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
water. Small hydro turbines can attain efficiencies of about 90%. Care
must be given to selecting the preferred turbine design for each
application as some turbines only operate efficiently over a limited flow
range (e.g. propeller turbines with fixed blades and Francis turbines).
For mostrun-of-river small hydro sites where flows vary considerably,
turbines that operate efficiently over a wide flow range are usually
preferred (e.g. Kaplan, Pelton, Turgo and cross flow designs).
Alternatively, multiple turbines that operate within limited flow
ranges can be used. There are two basic types of generators used in
small hydro plants - synchronous or induction (asynchronous). A
synchronous generator can be operated in isolation while an induction
generator must normally be operated in conjunction with other
generators. Synchronous generators are used as the primary source of
power produced by utilities and for isolated diesel-grid and stand-alone
small hydro applications. Induction generators with interconnection or
transmission and distribution system.
Turbines
A turbine converts the energy in falling water into shaft power. There are
various types of turbine which can be categorised in one of several ways.
The choice of turbine will depend mainly on the pressure head available
and the design flow for the proposed hydropower installation. As shown
in table 2 below, turbines are broadly divided into three groups; high,
medium and low head, and into two categories: impulse and reaction.
The difference between impulse and reaction can be explained simply by
stating that the impulse turbines convert the kinetic energy of a jet of
water in air into movement by striking turbine buckets or blades - there
is no pressure reduction as the water pressure is atmospheric on both
sides of the impeller. The blades of a reaction turbine, on the other
hand, are totally immersed in the flow of water, and the angular as well
as linear momentum of the water is converted into shaft power - the
pressure of water leaving the runner is reduced to atmospheric or lower.
45 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
CLASSIFICATION OF TURBINE TYPES.
1. Kaplan (reaction turbine)
The Kaplan turbine is a propeller-type water turbine which has
adjustable blades. It was developed in 1913 by the Austrian
professor Viktor Kaplan, who combined automatically adjusted propeller
blades with automatically adjusted wicket gates to achieve efficiency
over a wide range of flow and level. The Kaplan turbine was an evolution
of the Francis turbine. Its invention allowed efficient power production
in low-head applications that was not possible with Francis turbines.
The head ranges from 10-70 meters and the output from 5 to 120 MW.
Runner diameters are between 2 and 8 meters. The range of the turbine
is from 79 to 429 rpm. Kaplan turbines are now widely used throughout
the world in high-flow, low-head power production.
Theory of operation
The Kaplan turbine is an inward flow reaction turbine, which means
that the working fluid changes pressure as it moves through the turbine
and gives up its energy. Power is recovered from both the hydrostatic
head and from the kinetic energy of the flowing water. The design
combines features of radial and axial turbines. The inlet is a scroll-
shaped tube that wraps around the turbine's wicket gate. Water is
directed tangentially through the wicket gate and spirals on to a
propeller shaped runner, causing it to spin. The outlet is a specially
shaped draft tube that helps decelerate the water and recover energy. The
turbine does not need to be at the lowest point of water flow as long as
the draft tube remains full of water. A higher turbine location, however,
increases the suction that is imparted on the turbine blades by the draft
tube. The resulting pressure drop may lead to cavitation. Variable
geometry of the wicket gate and turbine blades allow efficient operation
for a range of flow conditions. Kaplan turbine efficiencies are typically
over 90%, but may be lower in very low head applications. Current areas
of research include CFD driven efficiency improvements and new
46 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
designs that raise survival rates of fish passing through. Because the
propeller blades are rotated by high-pressure hydraulic oil, a critical
element of Kaplan design is to maintain a positive seal to prevent
emission of oil into the waterway. Discharge of oil into rivers is not
permitted.
2. Francis turbine
The Francis turbine is a type of water turbine that was developed
by James B. Francis in Lowell, Massachusetts. It is an inward-
flow reaction turbine that combines radial and axial flow concepts.
Francis turbines are the most common water turbine in use today. They
operate in a head range of 10 to 650 meters (33 to 2,133 feet) and are
primarily used for electrical power production. The power output
generally ranges from 10 to 750 megawatts, though mini-hydro
installations may be lower. Runner diameters are between 1 and 10
meters (3 and 33 feet). The speed range of the turbine is from 83 to
1000 rpm. Medium size and larger Francis turbines are most often
arranged with a vertical shaft. Vertical shaft may also be used for small
size turbines, but normally they have horizontal shaft.
3. Propeller turbine
A type of reaction turbine with a propeller-style runner. Water passes
through the runner and drives the propeller blades. Propeller turbines
can be used from 2 to 300 feet of head, and can be as large as 100
megawatts.
4. Pelton (impulse turbine)
The Pelton wheel is a water impulse turbine. It was invented by Lester
Allan Pelton in the 1870s. The Pelton wheel extracts energy from
the impulse of moving water, as opposed to its weight like traditional
overshot water wheel. Although many variations of impulse turbines
existed prior to Pelton's design, they were less efficient than Pelton's
design; the water leaving these wheels typically still had high speed, and
carried away much of the energy. Pelton's paddle geometry was designed
so that when the rim runs at ½ the speed of the water jet, the water
47 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
leaves the wheel with very little speed, extracting almost all of its energy,
and allowing for a very efficient turbine.
Function
The water flows along the tangent to the path of the runner. Nozzles
direct forceful streams of water against a series of spoon-shaped
buckets mounted around the edge of a wheel. As water flows into the
bucket, the direction of the water velocity changes to follow the contour
of the bucket. When the water-jet contacts the bucket, the water exerts
pressure on the bucket and the water is decelerated as it does a "u-turn"
and flows out the other side of the bucket at low velocity. In the process,
the water's momentum is transferred to the turbine. This "impulse"
does work on the turbine. For maximum power and efficiency, the
turbine system is designed such that the water-jet velocity is twice the
velocity of the bucket. A very small percentage of the water's
original kinetic energy will still remain in the water; however, this allows
the bucket to be emptied at the same rate it is filled, (see conservation of
mass), thus allowing the water flow to continue uninterrupted. Often
two buckets are mounted side-by-side, thus splitting the water jet in
half (see photo). This balances the side-load forces on the wheel, and
helps to ensure smooth, efficient momentum transfer of the fluid jet to
the turbine wheel. Because water and most liquids are nearly
incompressible, almost all of the available energy is extracted in the first
stage of the hydraulic turbine. Therefore, Pelton wheels have only one
turbine stage, unlike gas turbines that operate with compressible fluid.
4. Turgo (impulse turbine)
The Turgo turbine is an impulse water turbine designed for
medium head applications. Operational Turgo Turbines achieve
efficiencies of about 87%. In factory and lab tests Turgo Turbines
perform with efficiencies of up to 90%. It works with net heads between
15 and 300 m. Developed in 1919 by Gilkes as a modification of
the Pelton wheel, the Turgo has some advantages over Francis and
Pelton designs for certain applications. First, the runner is less
48 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
expensive to make than a Pelton wheel. Second, it doesn't need an
airtight housing like the Francis. Third, it has higher specific speed and
can handle a greater flow than the same diameter Pelton wheel, leading
to reduced generator and installation cost.Turgos operate in a head
range where the Francis and Pelton overlap. While many large Turgo
installations exist, they are also popular for small hydro where low cost
is very important. Like all turbines with nozzles, blockage by debris
must be prevented for effective operation.
Theory of operation The Turgo turbine is an impulse type
turbine; water does not change pressure as it moves through the turbine
blades. The water’s potential is converted to kinetic energy with a nozzle.
The high speed water jet is then directed on the turbine blades which
deflect and reverse the flow. The resulting impulse spins the turbine
runner, imparting energy to the turbine shaft. Water exits with very little
energy. Turgo runners are extremely efficient. ATurgo runner looks like
a Pelton runner split in half. For the same power, the Turgo runner is
one half the diameter of the Pelton runner, and so twice the specific
speed. The Turgo can handle a greater water flow than the Pelton
because exiting water doesn't interfere with adjacent buckets. The
specific speed of Turgo runners is between the Francis and Pelton.
Single or multiple nozzles can be used. Increasing the number of jets
increases the specific speed of the runner by the square root of the
number of jets (four jets yield twice the specific speed of one jet on the
same turbine).
5. Cross-flow (generally classified as an impulse turbine).
A cross-flow turbine, Banki-Michell turbine, or Ossberger turbine is
a water turbine developed by the Australian Anthony Michell, the
Hungarian DonátBánki and the German Fritz Ossberger. Michell
obtained patents for his turbine design in 1903, and the manufacturing
company Weymouth made it for many years. Ossberger's first patent
was granted in 1933 ("Free Jet Turbine" 1922, Imperial Patent No.
361593 and the "Cross Flow Turbine" 1933, Imperial Patent No.
49 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
615445), and he manufactured this turbine as a standard product.
Today, the company founded by Ossberger is the leading manufacturer
of this type of turbine. Unlike most water turbines, which have axial or
radial flows, in a cross-flow turbine the water passes through the
turbine transversely, or across the turbine blades. As with a water
wheel, the water is admitted at the turbine's edge. After passing the
runner, it leaves on the opposite side. Going through the runner twice
provides additional efficiency. When the water leaves the runner, it also
helps clean the runner of small debris and pollution. The cross-flow
turbine is a low-speed machine that is well suited for locations with a
low head but high flow. Although the illustration shows one nozzle for
simplicity, most practical cross-flow turbines have two, arranged so that
the water flows do not interfere. Cross-flow turbines are often
constructed as two turbines of different capacity that share the same
shaft. The turbine wheels are the same diameter, but different lengths to
handle different volumes at the same pressure. The subdivided wheels
are usually built with volumes in ratios of 1:2. The subdivided
regulating unit, the guide vane system in the turbine's upstream
section, provides flexible operation, with 33, 66 or 100% output,
depending on the flow. Low operating costs are obtained with the
turbine's relatively simple construction.
SMALL HYDRO PROJECT DEVELOPMENT
The development of small hydro projects typically takes from 2 to 5
years to complete, from conception to final commissioning. This time is
required to undertake studies and design work, to receive the necessary
approvals and to construct the project. Once constructed, small hydro
plants require little maintenance over their useful life, which can be well
over 50 years. Normally, one part-time operator can easily handle
operation and routine maintenance of a small hydro plant, with periodic
maintenance of the larger components of a plant usually requiring help
from outside contractors. The technical and financial viability of each
potential small hydro project are very site specific. Power output
depends on the available water (flow) and head (drop in elevation). The
50 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
amount of energy that can be generated depends on the quantity of
water available and the variability of flow throughout the year. The
economics of a site depends on the power (capacity) and the energy that
a project can produce, whether or not the energy can be sold, and the
price paid for the energy. In an isolated area (off-grid and isolated-grid
applications) the value of energy generated for consumption is generally
significantly more than for systems that are connected to a central-grid.
However, isolated areas may not be able to use all the available energy
from the small hydro plant and, may be unable to use the energy when
it is available because of seasonal variations in water flow and energy
consumption. A conservative, rule-of-thumb” relationship is that power
for a hydro project is equal to seven times the product of the flow (Q)
and gross head (H) at the site (P = 7QH). Producing 1 kW of power at a
site with 100 m of head will require one-tenth the flow of water that a
site with 10 m of head would require. The hydro turbine size depends
primarily on the flow of water it has to accommodate. Thus, the
generating equipment for higher-head, lower-flow installations is
generally less expensive than for lower-head, higher-flow plants. The
same cannot necessarily be said for the civil works components of a
project which are related much more to the local topography and
physical nature of a site.
TYPES OF SMALL HYDRO DEVELOPMENTS
Small hydro projects can generally be categorized as either “run-of-river
developments” or “water storage (reservoir) developments”, which are
described in more detail below.
Run-of-river developments
Run-of-river” refers to a mode of operation in which the hydro plant
uses only the water that is available in the natural flow of the river.
Run-of-river” implies that there is no water storage and that power
fluctuates with the stream flow. The power output of run-of-river small
hydro plants fluctuates with the hydrologic cycle, so they are often best
suited to provide energy to a larger electricity system. Individually, they
do not generally provide much firm capacity. Therefore, isolated areas
51 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
that use small hydro resources often require supplemental power. A
run-of-river plant can only supply all of the electrical needs of an
isolated area or industry if the minimum flow in the river is sufficient to
meet the load’s peak power requirements. Run-of-river small hydro can
involve diversion of the flow in a river. Diversion is often required to take
advantage of the drop in elevation that occurs over a distance in the
river. Diversion projects reduce the flow in the river between the intake
and the powerhouse. A diversion weir or small dam is usually required
to divert the flow into the intake.
Water storage (reservoir) developments
For a hydroelectric plant to provide power on demand, either to meet a
fluctuating load or to provide peak power, water must be stored in one
or more reservoirs. Unless a natural lake can be tapped, providing
storage usually requires the construction of a dam or dams and the
creation of new lakes. This impacts the local environment in both
negative and positive ways, although the scale of development often
magnifies the negative impacts. This often presents a conflict, as larger
hydro projects are attractive because they can provide “stored” power
during peak demand periods. Due to the economies of scale and the
complex approval process, storage schemes tend to be relatively large in
size. The creation of new storage reservoirs for small hydro plants is
generally not financially viable except, possibly, at isolated locations
where the value of energy is very high. Storage at a small hydro plant, if
any, is generally limited to small volumes of water in a new head pond
or existing lake upstream of an existing dam. Pondage is the term used
to describe small volumes of water storage. Pondage can provide benefits
to small hydro plants in the form of increased energy production and/or
increased revenue. Another type of water storage development is
“pumped storage” where water is “recycled between downstream and
upstream storage reservoirs. Water is passed through turbines to
generate power during peak periods and pumped back to the upper
reservoir during off-peak periods. The economics of pumped storage
52 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
projects depends on the difference between the values of peak and off-
peak power. Due to the inefficiencies involved in pumping versus
generating, the recycling of water results in a net consumption of
energy. Energy used to pump water has to be generated by other
sources.
The environmental impacts that can be associated with small
hydro developments can vary significantly depending on the location
and configuration of the project. The effects on the environment of
developing a run-of-river small hydro plant at an existing dam are
generally minor and similar to those related to the expansion of an
existing facility. Development of a run-of-river small hydro plant at an
undeveloped site can pose additional environmental impacts. A small
dam or diversion weir is usually required. The most economical
development scheme might involve flooding some rapids upstream of the
new small dam or weir. The environmental impacts that can be
associated with hydroelectric developments that incorporate water
storage (typically larger in size) are mainly related to the creation of a
water storage reservoir. The creation of a reservoir involves the
construction of a relatively large dam, or the use of an existing lake to
impound water. The creation of a new reservoir with a dam involves the
flooding of land upstream of the dam. The use of water stored in the
reservoir behind a dam or in a lake results in the fluctuation of water
levels and flows in the river downstream. A rigorous environmental
assessment is typically required for any project involving water storage.
Load factor
The load factor is the amount of power used divided by the amount of
power that is available if the turbine were to be used continuously.
Unlike technologies relying on costly fuel sources, the 'fuel' for
hydropower generation is free and therefore the plant becomes more
cost effective if run for a high percentage of the time. If the turbine is
only used for domestic lighting in the evenings then the plant factor will
be very low. If the turbine provides power for rural industry during the
day, meets domestic demand during the evening, and maybe pumps
53 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
water for irrigation in the evening, then the plant factor will be high. It is
very important to ensure a high plant factor if the scheme is to be cost
effective and this should be taken into account during the planning
stage. Many schemes use a 'dump' load (in conjunction with an
electronic load controller - see below), which is effectively a low priority
energy demand that can accept surplus energy when an excess is
produced e.g. water heating, storage heaters or storage cookers.
Water into watts
To determine the power potential of the water flowing in a river or
stream it is necessary to determine both the flow rate of the water and
the head through which the water can be made to fall. The flow rate is
the quantity of water flowing past a point in a given time. Typical flow
rate units are liters per second or cubic meters per second. The head is
the vertical height, in meters, from the turbine up to the point where the
water enters the intake pipe or penstock.
The potential power can be calculated as follows:
Theoretical power (P) = Flow rate (Q) x Head (H) x Gravity (g) (G= 9.81
m/s
2
). When Q is in cubic meters per second, H in meters and g = 9.81
m/s
2
) then, P = 9.81 x Q x H (kW)
However, energy is always lost when it is converted from one form to
another. Small water turbines rarely have efficiencies better than 80%.
Power will also be lost in the pipe carrying the water to the turbine, due
to frictional losses. By careful design, this loss can be reduced to only a
small percentage. A rough guide used for small systems of a few kW
rating is to take the overall efficiency as approximately 50%. Thus, the
theoretical power must be multiplied by 0.50 for a more realistic figure.
Example: A turbine generator set operating at a head of 10 meters with
flow of 0.3 cubic meters per second will deliver approximately, (9.81 x 0.5
x 0.3 x 10 =) 15 kilowatts of electricity.
If a machine is operated under
conditions other than full-load or full-flow then other significant
inefficiencies must be considered. Part flow and part load characteristics
54 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
of the equipment need to be known to assess the performance under
these conditions. It is always preferable to run all equipment at the
rated design flow and load conditions, but it is not always practical or
possible where river flow fluctuates throughout the year or where daily
load patterns vary considerably. Depending on the end user
requirements of the generated power, the output from the turbine shaft
can be used directly as mechanical power or the turbine can be
connected to an electrical generator to produce electricity. For many
rural industrial applications shaft power is suitable (for food processing
such as milling or oil extraction, sawmill, carpentry workshop, small
scale mining equipment, etc.), but many applications require conversion
to electrical power. For domestic applications electricity is preferred.
This can be provided either:
• directly to the home via a small electrical distribution system or,
• can be supplied by means of batteries which are returned
periodically to the power house for recharging - this system is common
where the cost of direct electrification is prohibitive due to scattered
housing (and hence an expensive distribution system),
Where a generator is used alternating current (a.c.) electricity is
normally produced. Single phase power is satisfactory on small
installations up to 20kW, but beyond this, 3-phase power is used to
reduce transmission losses and to be suitable for larger electric motors.
An a.c. power supply must be maintained at a constant 50 or 60
cycles/second for the reliable operation of any electrical equipment
using the supply. This frequency is determined by the speed of the
turbine which must be very accurately governed.
Suitable conditions for micro-hydro power.
The best geographical areas for exploiting small-scale hydro power are
those where there are steep rivers flowing all year round, for example,
the hill areas of countries with high year-round rainfall, or the great
mountain ranges and their foothills, like the Andes and the Himalayas.
55 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
Islands with moist marine climates, such as the Caribbean Islands, the
Philippines and Indonesia are also suitable. Low-head turbines have
been developed for small-scale exploitation of rivers where there is a
small head but sufficient flow to provide adequate power. To assess the
suitability of a potential site, the hydrology of the site needs to be known
and asite survey carried out, to determine actual flow and head data.
Hydrological information can be obtained from the meteorology or
irrigation department usually run by the national government. This data
gives a good overall picture of annual rain patterns and likely
fluctuations in precipitation and, therefore, flow patterns. The site
survey gives more detailed information of the site conditions to allow
power calculation to be done and design work to begin. Flow data
should be gathered over a period of at least one full year where possible,
so as to ascertain the fluctuation in river flow over the various seasons.
There are many methods for carrying out flow and head measurements
and these can be found in the relevant texts.
The Environmental Impact.
Unlike traditional power stations that use fossil fuels, micro-hydro
generators have practically no effect on the environment. And because
they don’t depend on dams to store and direct water, they’re also better
for the environment than large-scale hydro-electric stations.In fact, by
reducing the need to cut down trees for firewood and increasing farming
efficiency, micro-hydro has a positive effect on the local environment.
The power to recharge communities
Micro-hydro power can also be supplied to villages via portable
rechargeable batteries. People can use these convenient sources of
electricity to fuel anything from workshop machines to domestic lighting
– and there are no expensive connection costs. The batteries are charged
at a station in the village, thus providing the local community with a
clean, renewable source of power. For industrial use, the output from
the turbine shaft can be used directly as mechanical power, as opposed
to converting it into electricity via a generator or batteries. This is
suitable for agro-processing activities such as milling, oil extraction and
56 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
carpentry. Micro-hydro schemes are owned and operated by the
communities they serve, with any maintenance carried out by skilled
members of that community. So they provide employment in
themselves, as well as providing the power to re-energise entire
communities.
What does it cost?
Costs are different for every case, and it is impossible to give an
accurate figure without knowing the specifics of the site. From the
experience, the cost varies from approximately 8 to 10 Crore rupees per
MW, when using appropriate technologies, which are much cheaper
than using conventional approaches and technologies.
Other issues
The economics - cost reduction
Normally, small-scale hydro installations in rural areas of developing
countries can offer considerable financial benefits to the communities
served, particularly where careful planning identifies income-generating
uses for the power. The major cost of a scheme is for site preparation
and the capital cost of equipment. In general, unit cost decreases with a
larger plant and with high heads of water. It could be argued that small-
scale hydro technology does not bring with it the advantages of
'economy of scale', but many costs normally associated with larger
hydro schemes have been 'designed out' or 'planned out' of micro hydro
systems to bring the unit cost in line with bigger schemes. This includes
such innovations as:
• using run-of-the-river schemes where possible - this does away
with the cost of an expensive dam for water storage
• locally manufactured equipment where possible and appropriate
• use of HDPE (plastic) penstocks where appropriate
• Electronic load controller- allows the power plant to be left
unattended, thereby reducing labour costs, and introduces useful
57 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
by-products such as battery charging or water heating as dump
loads for surplus power; also does away with bulky and expensive
mechanical control gear.
• using existing infrastructure, for example, a canal which serves
an irrigation scheme
• sitting of power close to village to avoid expensive high voltage
distribution equipment such as transformers
• using pumps as turbines (PAT) - in some circumstances standard
pumps can be used 'in reverse' as turbines; this reduces costs,
delivery time, and makes for simple installation and maintenance
• using motors as generators - as with the PAT idea, motors can be
run 'in reverse' and used as generators; pumps are usually
purchased with a motor fitted and the whole unit can be used as a
turbine/generator set
• use of local materials for the civil works
• use of community labor.
• good planning for a high plant factor (see above) and well
balanced load pattern (energy demand fluctuation throughout the
day)
• low-cost connections for domestic users
• self-cleaning intake screens - this is a recent innovation which is
fitted to the intake weir and prevents stones and silt from entering
the headrace canal; this does away with the need for overspill and
desalting structures along the headrace canal and also means
that, in many cases, the canal can be replaced by a low-pressure
conduit buried beneath the ground - this technology is, at
present, still in its early stages of dissemination
Hydroelectric power
• Development of large-scale hydroelectric power has environmental
impacts associated with the change in water flow and the impoundment
58 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
of water in a reservoir. Dams may block the passage of fish. The natural
flow of silt down the river will be interrupted, affecting downstream
ecosystems. Where large reservoirs are not cleared of trees before
flooding, the methane gas released by decaying wood can be comparable
in greenhouse effect to the CO2 emissions of a fossil-fuel plant of similar
output. The filling of large reservoirs can induce earth tremors, which
may be large enough to be objectionable or destructive. For example, the
1967 Koynanagar earthquake of 6.9 magnitude was created after the
filling of the Koyna Dam in India, with 180 fatalities. A magnitude 7.9
earthquake near the Zipingpu Dam, China, in 2004, with 70,000
fatalities may also have been triggered by the weight of the reservoir.
Negawatt power
• Negawatt power refers to investment to reduce electricity
consumption rather than investing to increase supply capacity. In this
way investing in Negawatts can be considered as an alternative to a new
power station and the costs and environmental concerns can be
compared. Negawatt investment alternatives to reduce consumption by
improving efficiency include:
• Providing customers with energy efficient lamps - low
environmental impact.
• Improved thermal insulation and air tightness for buildings - low
environmental impact
• Replacing older industrial plant - low environmental impact. Can
have a positive impact due to reduced emissions.
• Negawatt investment alternatives to reduce peak electrical load by
time shifting demand include;
• Storage heaters - older systems had asbestos. Newer systems have
low environmental impact.
• Demand response control systems where the electricity board can
control certain customer loads - minimal environmental impact.
59 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
• Thermal storage systems such as Ice storage systems to make ice
during the night and store it to use it for air conditioning during the day
- minimal environmental impact.
• Pumped storage hydroelectricity - Can have a significant
environmental impact - see hydroelectricity.
• Other Grid energy storage technologies - impact varies.
• Note that time shifting does not reduce total energy consumed or
system efficiency however it can be used to avoid the need to build a
new power station to cope with a peak load.
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ANALYSIS OF HYDRO ELECTRIC PROJECTS OF THE
STATE OF JAMMU AND KASHMIR.
State Run Projects
S.
No
Name of the
project
Year of
commencement
Installed capacity Present
Derated
Capacity
1. Ganderbal 1956 2 x 3 + 2 X 4.5 = 15 MW 8.00 MW
2. Upper Sindh 1965 2x11.3 22.6MW 17.00 MW
3. Upper Sindh ii 1973-74 3x35MW = 105MW 105.00MW
4. Karnah
1991 (I Unit)
19979II unit)
2 X 1=2MW 1.00 MW
5. Lower Jhelum 1907 3 x 35= 105MW 90.00 MW
6. Pahalgam 2 x 1.5 =3MW
7. CHENAB BASIN
Chenani I
1971 (Unit I, II, III)
1975 (Unit IV & V)
5 X 4.66 = 23.30 MW 17.00 MW
8. Chenani II 1996 2 X 1 =2 MW 1.00 MW
9. Chennani III 2001 3 x 2.5 = 7.5 MW 7.50 MW
10.
Bhaderwah 2 x 0.5MW 1.00 MW
11.
Baglihar 3x150=450MW 450.00 MW
12. RAVI BASIN
Sewa III
2002 3 X 3 =9 MW 9.00 MW
13. INDUS BASIN
Iqbal
1956 3 x 1.25 = 3.75MW 3.75MW
14. Hunder 1995 2x 200 KW = 400KW 0.40 MW
15. Sumoor 1993 2x 0..50 KW 100KW 0.10MW
16. Bazgo 1994 2x 1.50 KW = 300KW 0.30MW
17. Igo-Mercellong 2x1.50=MW 3.00 MW
18.
Marpachoo 3x0.25=0.75MW 0.75MW
19.
Haftal 2x0.50MW 1.00MW
20.
Stakna 2x2=4MW 4.00 MW
TOTAL Total 758.70 Mw 719.8MW
CENTRAL
SECTOR
Installed capacity
Present
Derated
Capacity
1 Salal HEP 6x115 690MW
2 Uri –I 4x120 480MW
3
Dul-Hasti 3x130 390MW
Total 1560MW
1560MW
The JKSPDC presently has only 20 hydroelectric projects with
installed capacity of 758.70 MW and actual production of 719.8MWs
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located in various districts of J&K including 450 MW Baglihar
Hydroelectric project. Besides NHPC owns three main projects viz Salal,
Dul-Hasti and Uri 1 with the installed capacity of 1560 MW of power.
Being rich in hydro resources the state is suffering from deficiency
of 1567.70MW of electricity to meet the demand of state. Contribution of
electricity supply from all sources is shown in the table below where in
state contributes 29% and the share of central government projects is
around 9% and a meager contribution comes from the private sector
projects which is 0.7% less than one percent.
STATEMENT SHOWING ACTUAL DEFICIENCY IN HEP SUPPLY
Particulars Units % Units Total
1 Requirement of Electricity by the
state
100% 2500.00MW
2(a) Actual production 719.80MW 28.79%
2(b) Central sector Share 12.5% of
1560 MW
195.00MW 7.8%
2(c) 17.50 MWs from two private
sector projects.
17.50 MW 0.7%
3 Total available[2a+2b+2c] 932.30MW 37.28%
Deficiency (1-3) 62.7% 1567.70MW
It is evident from the diagram that there is a big gap between the
availability of and the demand for electricity. Though the hydro
potential of the State is about 22,000 MW, annual energy loss works out
to 60,000 million units valuing Rs. 30,000 Crores at Rs. 5 per unit per
year, which is substantially less than the prevalent market rate.
State
Authorities
29%
Central Share
8%
Private Sector
0.07%
Deficiency
63%
Requirement 2500
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Main source for the development of hydro power projects to the
state of Jammu and Kashmir are Jhelum, Chenab, Indus and Ravi on
which main power projects are developed and developing. The table
below shows the figures of actual capacity, harnessed power and it also
shows the status of construction of new projects with power potential.
River Jhelum has a total identified potential of 3560 MW potential of
which only 750.1 MWs have been tapped and projects under
construction will add 570 MWs to the power pool of country.
River Chenab has the highest potential of 10360 MWs of which only
1563.8 MWs have been tapped and further 450 MWs are under
construction.
Actual, harnessed potential, under construction and unutilised
power potential of Jhelum, Chenab, Indus and Ravi.
S.
No
Name
of the
River
Actual
Potential
Under
construction
%
Harnessed
Harnessed
Potential
Unutilised
Capacity
1 Jhelum 3560 570 MWs 21.07% 750.1MW 78.93%
2 Chenab 10360 450 MWs 15.09% 1563.8MW 84.91%
3 Indus 2060 90.26 MWs 4.38% 13.3MW 95.62%
4 Ravi 500 00.00MWs 25.80% 129.0MW 74.20%
Jhelum Chenab Indus Ravi
Actual 3560 10360 2060 500
Under construction 570 450 90.26 2.8
Harnessed Potential 750.1 1563.8 13.3 129
0
2000
4000
6000
8000
10000
12000
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Indus is the third biggest source of hydro power in the state with the
total capacity of 2060 MWs of which only 13.3 MWs have been
harnessed and 90.26 MWs are under construction.
River Ravi has a potential of 500 MWs of power and 25.8% have been
tapped and still 74% is available which needs to be considered for the
development as well as no efforts have been made to construct any
projects on it.
It is also evident from the table that there lies a big gap between actual
potential and unharnessed potential, 78.93% of the total potential of
Jhelum is un-utilized, 84.91% of Chenab, 95.62% of Indus is unutilized
and there is the least done to tap its potential and also only 74.20%
power potential of Ravi is yet to be utilized.
Though the hydro potential of the State is about 22,000 MW, annual
energy loss works out to 60,000 million units valuing Rs. 30,000 Crores
at Rs. 5 per unit per year, which is substantially less than the prevalent
market rate. The state needs an investment of US $ 33.84 Billion for
achieving the target of generating 22000 MW of electricity. (Present
dollar at 65 INR). In order to overcome the present shortage the state
needs an investment of 15852 Crore.
[Cost of generating 1MW=100,000,000[10 crores]
Cost of generating 22000 MW= 22000x10
=220000 crore
Dividing the figure of 2200000000000 by present dollar rate @ 65We get 33.84 Billion Dollars]
FUNDS REQUIRED TO MEET THE DEFICIENCY BY STATE AT PRESENT
and FUNDS REQUIRED TO GENERATE UNTAPPED POWER RESOURCES
Particulars Figure in Crores
1 Cost of generating 1MW 10.00cr
2 Cost of generating 1585.20 MW 15,852.00cr
3 Cost of generating 21085.2 210,852.00cr
The state has great prospects for the development if it taps all its
estimated power potential which is 22000MWs and of which state
produces 719.8 MWs and the state receives 12% from central projects
64 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
which is 195MWs from 1560 MWs tapped by the central projects. Table
below shows the figures of untapped power which is 21085.20 MWs
having the potential to fetch Rs.105426 Crore revenue to the state and
the total revenue from all hydroelectric power resources will be Rs.
110000.Crore.
Revenue Generating Capacity if developed by the state authorities
production Power In MW Unit Price Rs In Crores
1 Actual production
719.80MW 5 3599.00cr
2 Central sector
12% OF 1560 MW
195.00MW 5 975.00cr
3 Unharnessed
resources
21085.20 MW 5 105426.00cr
TOTAL REVENUE FROM ALL PROJECTS 110000.00cr
To the contrary if the hydro power projects are developed by the central
government, it will lead to tremendous loss to the state as it is evident
from the below produced figures that state will have meager 17752.25
Crore revenue as against Rs. 105426.00cr which state will be able to
generate if projects are taken up by the state herself. Every effort should
be made by the state government to decide the avenues of finance
required for the most precious assets to protect the state from losing Rs.
87673.75 Crore annually.
BY STATE
, 3599
BY CENTRE,
975
UNHARNESSED
, 105426
TOTAL
POTENTIAL,
110000
0
20000
40000
60000
80000
100000
120000
REVENUE POTENTIAL RS IN CRORE
Revenue Potential
65 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
Revenue Generating Capacity if developed by the central
authorities
production Power In MW Unit Price Rs In Crores
1 Actual production 719.80MW 5 3599.00 Cr
2 Central sector 12%
OF 1560 MW
195.00MW 5 975.00 Cr
3 Unharnessed
resources
12% OF
21085.20 MW
2530.22MW
5 12651.1 Cr
TOTAL REVENUE FROM ALL PROJECTS 17225.10 Cr
State will only be entitled to 2530.22MW from the total of 21085.20MWs
which is still untapped. Likewise the state will share 12% in the form of
royalty from the revenue generated by the central government projects
which is 12651.1 Cr as compared to 105426 Crores if developed by the
state. Furthermore the central government will have an incremental
income of Rs. 88200.9 Crore comprising 88% revenue from hydro power
projects of the state of Jammu and Kashmir.
REVENUE LOSS IF THE POWER PROJECTS ARE DEVELOPED BY
THE CVENTREAL GOVERNMENT
production Power In MW Total Revenue/ anum
Total Potential 22000.00 MW 110000.00Cr
1 If Developed by the state 21085.20 MW 105426.00cr
2 If Developed by the centre 2530.22MW 12651.10Cr
Net Revenue Loss to the
State(1-2)
18554.98MW 92775.10cr
The revenue of 17752.25 Crore will not be sufficient to the state to meet
its revenue expenditures and hence with this revenue only state
administration can be run leaving least for the development of primary,
secondary and tertiary industry as the dependence of state is more than
51% of its budget on central grant.
The projects can be developed phase wise and if the development is
assumed instant than we can have the idea of payback period which is
two years considering the total cost of projects and the net annual cash
inflows. It means if the projects are developed in one year and operated
at full capacity then the payback will be two years. Therefore it points
66 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
towards a very favorable situation for the prosperity of state as the
borrowed money will easily be repaid within two years.
Calculation of Payback period (UNDER STATE CONTROL)
Payback period= cost of project/net annual cash inflows
Payback period= 210852/105426
Payback period=2 years
As against this if the state hands over the construction of power projects
to central authority, then at the existing royalty rates which is 12%
presently. Central government will utilize the projects for twelve years
and in such situation payback period will be twelve years.
Calculation of Payback period (UNDER CENTRAL CONTROL)
Payback period= cost of project/net annual cash inflows
Payback period= 210852/17752.25
Payback period=11.9 years OR 12 years appx.
There are other possibilities on the basis of which payback period can be
calculated. Phase wise construction can also considered for calculation
of payback period of the projects.
If the development of total power potential is divided into four phases
then every phase will develop 5271.3MWs and cost associated with every
phase will be 52713 Crore rupees which will recover in two years.
5271.3MWs will generate 105426 Crores in four years and out of which
52713 has to be repaid to the lending agencies and the remaining
amount will serve as a basis for the construction of the second phase of
5271.3 MWs for which state needs no external financing as the money
generate within four years after repayment will be sufficient to be
invested into it. The payback period will be 8 years if phase wise
construction is considered.
This will have a very positive impact on the state Economy. Albeit
presently the state economy is the smallest in country after M.P where
in Primary sector contributes 25.82% the secondary sector contributes
about 28.29% and the tertiary sector contributes around 46% in GSDP.
With the development of hydro-power projects the contribution of the
services sector will increase from 45.89% to 83.11%.
67 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
Present share of Primary, Secondary and Tertiary sector in the State Economy
No Sector Revenue (In Crore) Percentage Total (In
Crore)
1 Primary 12352.29 25.82%
2 Secondary 13533.94 28.29%
3 tertiary 21953.77 45.89%
Total 100.00% 47840
Future Share of Primary, Secondary and Tertiary sector in the State Economy
No Sector Revenue
(In Crore)
Percentage Total (In
Crore)
1 Primary 12352.29 8.06%
2 Secondary 13533.94 8.83%
3 Tertiary(21953.77+105426)
(Old share + New share)
127379.77 83.11%
Total 100% 153266
Service sector will surpass the primary and secondary sector by Rs
105426 crore and will lead the economy as the major contributor
towards the state economy which will change the nature of economy
from agrarian to a dynamic service economy. The figures in table above
show the impact on electricity on the primary, secondary and tertiary
sector. Share of service sector changes positively from 45.89% to
83.11% whereas the share of primary and secondary sectors show a
negative growth at 8% which will increase with the time as electricity
serves the basis for the development of both the sectors.
68 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
CONCLUSION
The State is not rich in the non-renewable sources of fossil fuels
which could be used for energy generation but there are huge renewable
sources of energy in the form of water resources which can meet the
demand of the people. There is little scope for any other forms of power
generation in the state since there are few feasible sites for plants and
the area’s difficult topography makes the transport of raw materials
complicated and costly.
The state of Jammu and Kashmir with smallest economic size of $7.36
Billion as against 82.04$ billion in UP showing 6.28% growth and with a
third lowest per capita income of 27250. Primary sector contributes
25.82% with an annual growth of 1.79%. The state contributes 1% to
India’s GSDP. The secondary sector contributes about 28.29%. Whereas
the tertiary sector contributes around 46% in GSDP. The growth rate of
the services sector is 5% which is rather stagnant in state.
The economic prosperity of the state is inextricable from that of
its water resources, and its future depends on finding an equitable,
sustainable outcome for the region’s most valuable resource. Failing to
address the acute and escalating water issues will generate increasingly
dire consequences, particularly considering the rising pressures of
population growth and climate change. Integrated water cooperation and
sharing between Pakistan and India is important enough in its own
right, but perhaps finding a new way to navigate Kashmir’s waters will
provide the path to peace that the people of Jammu Kashmir, its parent
countries, and the wider international community seek. The disputed
territory’s potential could help to transform it “from a valley of death and
destruction to a center of excellence in…engineering.”
The main asset of Jammu & Kashmir state is its water resources.
There are near about twenty (20) rivers flowing through Jammu &
Kashmir. Three rivers the Indus, Jhelum and Chenab have to go to
Pakistan whereas Water of Sutlej, Beas and Ravi are to be consumed by
India. The state needs an investment of US $ 33.84 Billion for achieving
69 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
the target of generating 22000 MW of electricity according to the new
estimates.
The JKSPDC presently has only 20 hydroelectric projects with
installed capacity of 758.70 MW and actual production of 719.8MWs
located in various districts of J&K including 450 MW Baglihar
Hydroelectric project. Besides NHPC owns three main projects viz Salal,
Dul-Hasti and Uri 1 with the installed capacity of 1560 MW of power.
Being rich in hydro resources with hydro potential of about
22,000 MW the state is suffering from deficiency of 1567.70MW of
electricity to meet the demand of state and also the annual energy loss
of 60,000 million units valuing Rs. 30,000 Crores. Contribution of
electricity supply from all sources is 38.7% where in state contributes
29% and the share of central government projects is around 9% and a
meager contribution comes from the private sector projects which is
0.7% less than one percent. The state needs a huge investment of US $
33.84 Billion for achieving the target of generating 22000 MW of
electricity.
Despite of being rich in hydroelectric resources Kashmir has been
unable to grow to the optimum potential of its agriculture and electricity
sectors, its most vital needs for economic and human development.
Various factors have been identified which include:
? Indus Water Treaty: IWT permits building storage aggregating 3.6
million acre feet (MAF) on the three rivers of the Indus, Jhelum and
the Chenab.
? The projects handed over to NHPC on power sharing agreement basis
are presently completely under the control of NHPC and no
consideration is being given to the State in terms of power supply as
per the earlier agreement. In fact power generated within the State
by NHPC is being fed to the Northern Grid from where J&K is
purchasing its power requirement.
? The state of J&K having hostile terrain already suffers from huge
amount of transmission and distribution losses.
70 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
? Excess payment of Rs. 2340 Crores on power purchases from Salal
project. Whereas the agreement provides that J&K was entitled to 47
percent of power from Salal including 35 percent NSG at bus bar rate
(generation cost) and 12 percent of royalty cost.
? Huge amount for power purchasing from other state.
? The state not been allowed to utilize its water resources freely, the
state could have been able to produce the increased amount of
electricity within the state and the huge amount of money which it
has to pay for purchasing the power outside the state could have
been invested for other developmental purposes resulting in overall
growth of the J&K state economy.
? The absence of any legislation regarding taking over the power
projects being run within the State. There is also at the same time
need to review the existing power policy to make it more investor
friendly. This is all the more essential in order to rope in greater
number of private players for investing and sharing their expertise in
power sector.
With a growth in population the need for the supply of electric power is
growing very fast which provide an incentive for the development of the
industry as services sector is an important growth driver. The increase
in demand for power will help the economy grow and it will lead to
modernization, industrialization and improvement in basic amenities
culminating into quality life of the people. There has been a growing
realisation in developing countries that micro-hydro schemes have an
important role to play in the economic development of remote rural
areas, especially mountainous ones like the valley of Kashmir.
Hydropower is a renewable resource because it uses the continuous flow
of rivers and streams to produce electricity without using up the water
resource. It is also a clean technology because it does not rely on the
burning of fuels like oil, coal, or natural gas to produce power.
The best hydro power projects suitable to the state are Mini-hydro power
projects. Generally, small hydro projects built for application at an
isolated area are run-of-river developments and for this purpose the
71 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
topography of valley is very suitable and relevant. The best geographical
areas for exploiting small-scale hydro power are those where there are
steep rivers flowing all year round.
Mini-hydro has a power output of 100 kW to 1 MW, and is typically used
for a small factory or isolated community. Most of the environmental
impacts of small-scale hydro developments can be avoided in part or in
whole by a good design and appropriate construction and operating
practices. Since small hydro projects usually have minimal
environmental and licensing procedures, and since the equipment is
usually standardized and simplified, and since the civil works
construction is also small, small hydro projects should be developed
very rapidly in the state which will help in tapping the total identified
power potential of 22000MWs.
For this purpose the main source for the development of hydro power
projects to the state of Jammu and Kashmir are Jhelum, Chenab, Indus
and Ravi on which main power projects are developed and developing.
Total identified potential of River Jhelum is 3560 MW potential of which
only 750.1 MWs have been tapped and projects under construction will
produce 570 MWs. River Chenab has the highest potential of 10360
MWs of which only 1563.8 MWs have been tapped and further 450 MWs
are under construction. Indus is the third biggest source of hydro power
in the state with the total capacity of 2060 MWs of which only 13.3 MWs
have been harnessed and 90.26 MWs are under construction. River Ravi
has a potential of 500 MWs of power and 25.8% have been tapped and
still 74.2% is available.
Nevertheless, there lies a big gap between actual potential and
unharnessed potential; 78.93% of the total potential of Jhelum is un-
utilized, 84.91% of Chenab, 95.62% of Indus and also 74.20% power
potential of Ravi is yet to be utilized.
The focus should be on the main three river basins of the state include
Indus and its tributaries, Jhelum and its tributaries, Chenab and its
tributaries who offer great scope for generation of power through
Hydroelectric plant and whose potential is identified and on these rivers
72 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
the development of mini-hydro will prove cost effective and profitable as
well. Also because of the abundant water resources state could have
been able to generate surplus electricity which it can export to
neighboring states, resulting additional revenue to the state. The actual
requirement of the state is 2500MWs and the actual potential is 22000
MWs. The state would earn a net incremental revenue of Rs. 97500
crore [15Billion$] after meeting the shortfall and exporting the
remaining portion of 19500MWs to the neighboring states.
Since power and water has become an intensive need for
industrialization and hence development, if some kind of raw material is
available for exploitation, it should to be utilized fully. Then optimal
exploitation of the available resources of the State would meet the
State’s demand and also will boost the overall economy of the state.
The revenue generating capacity of all projects is estimated at Rs.
110000cr per annum, this will help the state to invest sufficiently in
primary, secondary and tertiary sector for which present expenditure is
Rs.8000 crore (Budget figure 2013-14).
Service sector will lead the economy as the major portion of (105426
crore) to the state revenue of (153266 crore) will come from the service
sector to the state which inturn will change the nature of the state
economy from agrarian to the tertiary economy.
Presently the revenue surplus from all sources is Rs. 5280Cr difference
Capital
Reciepts
11%
own taxes
18%
share of central
taxes
12%
own non-taxe
8%
Central Grants
51%
Budget 2013-14
73 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
between revenue receipts Rs.33970 Crore and revenue expenditure
Rs.27096cr.Total resources available to the state is Rs.19748 crore
(Budget figure 2013-14). Total capital and revenue receipts are 38068 of
which 51% is received in the form of Central grant.
If the power projects are financed by World Bank, IMF and other funding
agencies, the state would be able earn Rs.105426 Crore revenue from
untapped resources and hence the total revenue from all hydroelectric
power resources will be Rs. 110000 Crore which will be used to first
repay all the debts within two years.
If the hydro power projects are developed by the central government, it
will lead to tremendous loss to the state and the state will generate only
17752.25 Crore revenue from state run and central share in comparison
to Rs. 105426 crore if the projects are taken up by the state herself
which is less than the borrowed funds 19414.68 crore from the central
government. Every effort should be made by the state government to
decide the avenues of finance required for the most precious assets to
protect the state from losing Rs. 87673.75 Crore annually. Besides a net
income of Rs.18555 comprising 88% revenue from hydro power projects
of the state of Jammu and Kashmir will go to the central pool and the
share of state from added pool will be very minor and will not have any
significant impact on state economy.
To the contrary if the projects are developed by the state and if the
development is assumed instant and projects operated at full capacity,
then the payback period will be two years dividing the total cost of
projects by the net annual cash inflows. It means if the projects are
developed in one year and operated at full capacity then the payback
will be two years. Albeit it seems theoretically an ideal alternative and a
very favorable situation for the prosperity of state as the borrowed
money will easily be repaid within two years but it needs a very strong
initiative and government support in arranging finances for the purpose
which has not happened so far.
Projects can also be developed in different phases and different payback
period can be calculated.
74 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
The best option would be if the development of total power projects is
divided into four phases wherein every phase will develop 5271.3MWs
and cost associated with every phase will be will recover in two years.
5271.3MWs will generate 52713 in two years excluding the construction
phase and Rs 105426 Crores in four years. Out of this amount 52713
has to be repaid to the lending agencies and the remaining amount will
serve as a basis for the construction of the second phase of 5271.3 MWs
for which state needs no external financing as the money generate with
in four years after repayment will be sufficient to be invested into it. The
payback period will be 8 years if phase wise construction is considered.
This will have a very positive impact on the state Economy. With the
development of hydro-power projects the contribution of the services
sector will increase from 45.89% to 83.11%.Service sector will surpass
the primary and secondary sector by Rs 105426 crore and will lead the
economy as the major contributor of towards the state economy which
will change the nature of economy from agrarian to a dynamic service
economy.
The impact of the development of hydro-electric power projects by the
state on the primary, secondary and tertiary sector of the state will be
very dynamic as the share of service sector changes positively from
45.89% to 83.11% whereas the share of primary and secondary sectors
show a negative growth at 8% which will increase at a very fast rate with
the time in future as electricity serves the basis for the development of
all the sectors.
The state would be able to manage its economy independently and the
contribution towards National GDP would increase significantly because
the pace of development of primary secondary and tertiary industry will
multiply manifold. With the development of power sector to its fullest
capacity revenue of the state will increase from 5280 to115280Crore,
which is (twenty two) 22time more than present position. Expenditure
on power will be very low and 9% of (27096) 2438.64 crore of
expenditure on power and 9% expenditure on Interest will be utilised for
developing the infrastructure of the state and other social sectors.
75 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
Therefore, with the owned funds for the administration, the state would
be able to save around 5000 Crore rupees and this surplus will be an
extra capital available for the development of social infrastructure of the
state.
Unemployment in the state will be alleviated as with the huge surplus
available with the state, new industries on modern lines will be
developed, all the unemployed educated youth who are millions in
number will find the livelihood within the state which will serve as a
stimulus for peace and prosperity and the sense of alienation will
eliminate.
This will strengthen not only the state economy, promote peace and
prosperity but also the living standard and per capita income of people
will change proportionately to change in economic size of the state from
$7.36 US Billion to $24.22 US Billion, thereby increasing the per capita
income of the people of state from Rs. 40000(615$) to Rs. 131600
(2025$) preceding to Delhi with per capita income of Rs 117000 and
Haryana with 78781. This development will promote the state as the first
richest state among the northern states of India.
salaries
37%
Pension
9%
Interest
9%
Power
9%
Capital
Expenditure
25%
Others
11%
State's Expenditure
76 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
Micro-hydro schemes should be owned and operated by the
communities they serve, with any maintenance carried out by skilled
members of that community. So they provide employment in
themselves, as well as providing the power to re-energize entire
communities. State can also provide the industrial loan to the budding
entrepreneurs who in turn will create numerous avenues of employment
for the young, dynamic and talented youth of the state. Therefore,
estimated power potential of the state is very helpful to bring peace,
prosperity and stability in the ongoing crisis in J&K State.
77 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
Annexure 1
Existing Power Projects
Ganderbal
1. Year of commissioning 1956
2. Installed capacity
2 x 3 + 2 X 4.5 = 15
MW
3. Present derated capacity 8 MW
4. Head
137 M (Unit I & II)
140 M (Unit III & IV)
5. Length of Power canal 15 km
6. Designed discharge Capacity 473 cusecs
Upper Sindh ii
1. Year of commissioning 1973-74
2. Installed capacity
2x 1.30MW =
22.6MW
3. Present derated capacity 14MW
4. Head 149 M
5. Length of water Conductor 11 KM
6. Design discharge capacity 425 cusecs
Karnah
1. Year of Commissioning
1991 (I Unit)
19979II unit)
2. Installed capacity 2 X 1=2MW
3. Present Capacity 1 MW
4. Net DesignHead 36 M
5 Length of the Diversion Structure 315 M
6 Maximum Discharge Capacity 8.496 Cumecs
78 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
CHENAB BASIN
Chenani I
1. Year of commissioning
1971 (Unit I, II, III)
1975 (Unit IV & V)
2. Installed capacity
5 X 4.66 = 23.30
MW
3. Present derated Capacity 17 MW
4. Length of canal 18.64 Kms
5. Net head 365.83 M
Chenani II
1. Year of commissioning 1996
2. Installed capacity 2 X 1 =2 MW
3. Location
4 District Udhampur
Stage-II
Latitude 32 Deg-55'N
Longitude 75 Deg-09
E
5 Hydrology and climate condition
River Tawi
Catchment area upto power house
stage-I
652 Sq. Km
6. Water Conductor System
Total Length 2.315 Kms
Carrying Capacity 7.12 cumecs
7. Penstock
Feeder Penstock 50 M
Diameter 2600 mm.
79 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
Bifurcation
No. of pipes 2
Length of each pipe 18 Mt.
Diameter of each pipe 1900m
8. Power House
Location
Upstream of
SalmeyAcqueduct on
left bank of river tawi
Installed Capacity 2 Units of 1 MW each
Type Surface
Size 26m x 11.4 m
No. of Units 2 No.s
Gross Head 32.50
Net head 32.50
Type of turbine Francis
Rated output 1 MW
9 Generator
No. and type 2 x 1000 Kw
Generating Volt. 415 V
80 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
Chennani III
1. Year of commissioning 2001
2. Installed capacity 3 x 2.5 = 7.5 MW
3. Head 74.4 M
4. BR Capacity 16560 Cusecs
5. Length of canal 5.753 Kms
6. Location
District Udhampur
Stage-II
Latitude 32 Deg 52
Mn
Longitude 75 Deg
10 ME
5 Hydrology and climate condition
River Tawi
Catchment area upto power house
stage-I
625 Sq. Kms
6. Water Conductor System
Total Length 5.753 Kms
Carrying Capacity
Diversion to desailting tank 15.0 cumecs
Desilting tank onwards 13.0 cumecs
Diameter of each pipe 1900 m
7. Power House
Location
On the right bank of
river Tawi at Kawa.
Installed Capacity
3 Units of 2.5 MW
each
Type Surface
Size 45.30 M x 12.15 M
No. of Units 3 No.
Gross Head 80.0
Net head 74.7 M
Type of turbine Francis
9 Generator
No. and type
3 X 1000 KW
Synchronous.
81 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
RAVI BASIN
Sewa III
1. Year of commissioning 2002
2. Installed capacity 3 X 3 =9 MW
3. Head 38 M
4. Length of Canal 2.89 kms
5. Location 365.83 M
State Jammu & Kashmir
District Kathua
6 Hydrology
Catchment area at diversion area 494 Sq. Km
50% dependable discharge 24.13 cumecs
75% dependable discharge 6.94 cumecs
7. Diversion Structures
Type
Barrage 113.50 met
between flanks
8 Intake Staructure
No. &wideth of bays One bay of 5 M
Crest level 590 M
Design discharge 36.62 cumecs
9. Penstock
Number 3
Size 1.9M dia. Each
Length 62 M
10. Power House
Location
Near SudhaNAllah
on right bank of
river tawi.
Type Pit type
Gross Head 42.80 M
Net Head 38.00 M
82 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
INDUS BASIN
Iqbal
1. Year of commissioning 1956
2. Installed capacity 3 x 1.25 = 3.75MW
3. Head 15 M
5. Length of water Conductor 1.5 Km
Hunder
1. Year of commissioning 1995
2. Installed capacity
2x 200 KW =
400KW
3. No. of Units 2
4. Type of turbine Francis
5 Net Head in meter 32.01
6. Output at Generator terminals 200 KW
Sumoor
1. Year of commissioning 1993
2. Installed capacity
2x 0..50 KW
100KW
3. Make Jyoti Ltd., Baroda
4. No. of Units 2
5. Type of turbine Turbo
6. Net Head in meter 58
7. Output at Generator terminals 150 KW
83 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
Bazgo
1. Year of commissioning 1994
2. Installed capacity
2x 1.50 KW =
300KW
3. Make Jyoti Ltd., Baroda
4. No. of Units 2
5. Type of turbine Turbo
6. Net Head in meter 58
7. Output at Generator terminals 150 KW
8. Mounting Horizontal
5 Cooling Water cooled
10 Type of Governor
Hydro Mechanical
Bell Drive.
Annexure II
Upcoming power projects in Jammu and Kashmir
Name of Power
Project
Capacity in MW
STATE SECTOR
Baglihar Stage-II 450
Pahalgam (3rd Unit) 1.50
Matchil 0.35
Baderwah (3rd
Unit)
0.5
Sanjak 1.26
Total 453.61
CENTRAL SECTOR
Uri-II 240
Sewa-II 120
NimoBazgo 45
Chutak 44
Total 449
84 | F I S C A L P O T E N T I A L O F H Y D R O P O W E R P R O J E C T S O F J & K
REFERENCES
1. HYPERLINKhttp://www.jkspdc.nic.in/us1.htm
2. ShakeelQalander former president J&K FCIK
3. Kashmir Civil Society
4. Nazakat R. and Nengroo A.
5. Mohammad D, Bhat AS (2002). Problems of Power Sector
Development. In ShriPrakash and G.M. Shah, eds., Towards
Understanding the Kashmir Crisis, Delhi, p.175.
6. Shahmiri J (2010). Indus Water Treaty J&K Perspective, (this
Speech is Delivered in New Delhi on India-Pakistan Water
Dialogue) published by Greater Kashmir Srinagar, p.7
7. Miner M et al (2009). Water sharing between India and Pakistan: a
critical evaluation of the Indus Water Treaty, journal of water
international Vol. 34, No. 2, June, pp 204–216
8. Ali N (2011). J&K Vis New Delhi, at
http//www.himalmag.com/component/.../4560-j-a-k-vs-new-
delhi-.html
9. SC Sud (2005). Optimizing Hydel Development in Chenab Basin,
Journal of Himalayan and Central Asian Studies VOL. 9. , No.3.
p.27.
10. BukhariS (2000). "Serious Power Shortage Stalks J&K", the
Hindu, 18, January.
11. Sinha R (2006). Transboundary Disputes: Two Neighbors and a
Treaty, Journal of Economic and Political Weekly, p.209.
12. Waslekar S (2005). The Final Settlement: Restructuring India-
Pakistan Relations, Mumbai: Strategic Foresight Group, pp 54-62.
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