Hydropower in India

Hydropower is the backbone of low-carbon electricity generation, providing almost half of it worldwide today. Hydropower plants also make a major contribution to the flexibility and security of electricity systems. In June 2021, the IEA published the first ever market report dedicated to hydropower. Hydropower Special Market Report highlighted the economic and policy environment for hydropower development, addresses the challenges it faces, and offers policy recommendations to accelerate growth and maintain the existing infrastructure. The report presented ten-year capacity and generation forecasts for reservoir, run-of-river and pumped storage projects across the globe.

Fast-growing power demand, large untapped potential and growing flexibility needs are main drivers behind India’s hydropower growth. However, challenges persist in terms of mobilising affordable financing for sustainable hydropower, valuing and recognizing multi-purpose benefits of plants and supporting the rapid expansion of pumped storage hydro (PSH). The rising shares of variable renewable energy as well as variable load patterns from electric vehicles and higher cooling demand are all expected to increase India’s flexibility needs. Despite recent cost reductions in batteries, PSH remains the most cost-effective long-term storage option. PSH plants can provide almost all system services whilst ensuring electricity security and grid stability. Though India has an estimated potential of 96 GW, the operational PSH is only 3.3 GW. The slow expansion is due to high initial investment cost of plants and poor business case due to the existing pricing mechanism. In this regard, CSTEP has developed a differential pricing mechanism that could help increase PSH uptake in India.

This webinar aims to draw learnings from the IEA Hydropower Special Market Report’s global outlook and flexibility analysis and CSTEP’s analysis on differential pricing mechanisms for PSH. In addition, there will be dedicated panel discussions with experts from India and around the globe to discuss policy challenges and technology developments for accelerating the deployment of hydropower in India.