• Hydro-electric power is one of the cleanest and most viable renewable sources of energy. Madhya Pradesh Government has been constantly promoting setting up of non-conventional power plants, including hydro, through various policies, incentives and agencies specially created for this purpose. The policies formulated so far by the State Government had been all encompassing and applicable to all kinds of non conventional power producing sources like, Wind, Bio mass, Solar, Municipal Solid Waste and Hydro.
  
  
• While there has been considerable increase in the generating capacity from non-conventional power sources like the Wind and biomass, there has been no significant progress, barring one or two units, in the Hydropower sector.
  
  
• Estimated potential for generation from Small Hydro-power Projects (SHPs) is 15000 MW in India, out of which MPs estimated potential is 410 MW. Despite various promotional schemes and measures, MP could set up only 41 MW of SHPs which is only 2.42% of National installed capacity of 1693 MW. GoI aims to provide 10% of gross power generation in the country through Non conventional energy sources by the year 2012. Therefore MP has to travel very long distance to make up the deficit in the small hydro power sector.
  
  
• At present the SHPs in the State are governed by the policy of the State Government announced on 26.09.1994 amended time to time applicable to all the non-conventional power sources. (Annexure 2)
  
  
• In view of the still untapped large potential of hydropower within the State, it is imperative that a new more specific, comprehensive and liberal promotional policy regarding SHPs be enunciated to rapidly harness this potential.
  Therefore this new policy has been framed with the aim to address the needs of SHP sector on all the aspects including the allotment of projects taking in to consideration the changed legal and regulatory framework governing electricity generation/distribution.
  
  

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• This new policy shall apply to all the SHPs up to 25 MW capacity which have been identified for being set up by the Water Resources Department (WRD)/Narmada Valley Development Authority (NVDA)/ Madhya Pradesh Power Generation Company Limited (MPPGCL) and/or any other State agency that may be undertaking this task, or a private developer. This policy shall also apply to all the projects, which had been allotted by the erstwhile Madhya Pradesh Electricity Board (MPEB) now Madhya Pradesh State Electricity Board (MPSEB) and which are yet to attain the stage of commercial production.
  
  
• These SHPs can be Captive Power Projects (CPP), as also Independent Power Projects (IPP). A Captive Power Project shall have the same meaning as defined in section 2(8) read with Section 9 of the Electricity Act, 2003 and as detailed in Electricity Rules, 2005 notified by the Government of India, Ministry of Power on 8th June 2005.
  
  
• The list of identified SHPs up to an estimated generating capacity of 25 MW will be notified by the WRD and NVDA. This list shall be continually updated on identification of more sites. The jurisdiction of WRD will extend to all irrigation projects as well as river system within the state. Similarly the jurisdiction of NVDA will extend to all major irrigation/hydel power projects including those under execution or proposed to be executed within Narmada basin.
  
  
• Those sites, which have not been identified by any of the Government agencies and are instead identified by a private developer shall be treated as Self Identified sites and dealt separately under the provisions of this policy.
  Though this policy is primarily intended for private sector participation, any Government or Semi Government organization of the State or Union Government is equally eligible to avail the benefits of this policy.
  
  

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• The Electricity Act 2003 has been promulgated and has come into application from June 2003. Under the provisions of the Act, any agency is free to set up generating plants for production of power and the producer of the energy is vested with a right to Open Access to the transmission facilities.
  
• The Madhya Pradesh Electricity Regulatory Commission (MPERC) has been functioning since 1999 and orders/regulations passed by this commission from time to time are applicable to the provision of this policy. Similarly policies enacted by GoI from time to time regarding energy sector will also be applicable to the provision of this policy. In case of any inconsistency between the provision of this policy and orders/regulations issued by MPERC, the orders/regulations of MPERC shall prevail.
  
  

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• The objectives of the policy are:
  
  • To promote generation of green power through small hydropower projects with private sector participation.
    
  • To define the incentives and benefits available to a private sector participant in the sector.
    
  • To create a favorable environment for promoting the sector.
    
  • To lay down the framework for the implementation of the policy.
    

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