The Ministry of New and Renewable Energy (MNRE) has announced amendments to the guidelines for Small Hydro Power (SHP) schemes, aiming to address challenges faced by stakeholders in the sector. These revisions apply to all projects sanctioned under the SHP schemes circulated in 2009 and 2014.
The revised framework emphasizes performance-based financial assistance, requiring developers to submit monthly generation reports until their projects consistently produce at least 80% of the projected power output for three consecutive months. This encourages accountability and accurate assessment of project viability. The Ministry mandates proof of energy generation through certificates issued by State Electricity Boards or Power Transmission Corporations, ensuring transparency and reliability in reporting. In an innovative move, projects that surpass 280% of the projected generation for any month become eligible for balance financial assistance, incentivizing overperformance.
Recognizing the common delays faced in commissioning SHP projects, MNRE has introduced a 12-month grace period from the originally scheduled commissioning date. Should delays extend beyond this period, financial assistance will reduce by 5% for every quarter of delay, capped at a 50% reduction on the second installment of the grant.
Projects are expected to be completed within five years from the contract award date. Extensions to this timeline will be considered only on a case-by-case basis and contingent upon developers demonstrating at least 50% aggregate physical progress.
| Key Amendment Area | Details |
|---|---|
| Performance-Based Financial Assistance | – Monthly generation reports required until 80% of projected generation achieved for 3 consecutive months. – Proof of generation via certificates from State Electricity Boards or Power Transmission Corporations. – If generation reaches 280% of projected for any month, balance eligible assistance paid. – Otherwise, financial assistance is proportionally restricted. |
| Grace Period and Delays | – 12 months grace period for project commissioning from original scheduled date. – Beyond grace period, financial support reduced by 5% per quarter delay. – Maximum reduction capped at 50% from second installment of eligible assistance. |
| Project Completion Timeline | – Projects must be completed within 5 years from contract award.- Extensions granted case-by-case with justified reasons. – Extensions contingent on achieving 50% aggregate physical progress. |
| Performance Testing and Certification | – After project completion and performance guarantee tests, developers must get physical inspection/testing. – Certification of performance must be obtained from designated organizations. |
These revisions aim to streamline the implementation process and ensure that projects meet performance standards, thereby contributing to the growth of the small hydro power sector in India.
