Shimla, Jan 6: The Himachal Pradesh government has decided to sell its share of free hydropower from large projects through power trading, ending the practice of supplying it directly to the state electricity board, officials said.
The decision, approved by the Cabinet on December 30, αφορά monetising around 438 MW of free power accrued annually from the Nathpa Jhakri and Rampur hydropower projects located in the Sutlej basin near Rampur.
Under the new arrangement, the free power will no longer be routed through the Himachal Pradesh State Electricity Board. Instead, the Directorate of Energy will manage its sale in the electricity market after being designated as the state’s Energy Management Centre.
“The objective is to generate additional revenue for the state and ensure more efficient handling of free power from large hydropower projects,” an official familiar with the decision said.
The Cabinet also approved amendments to the Swaran Jayanti Energy Policy-2021, granting relief to hydropower projects with a capacity below 25 MW by reducing the royalty burden.
Earlier, these projects were required to pay free power royalties ranging from 12 to 30 per cent, along with a one per cent contribution to the Local Area Development Fund. Developers had repeatedly flagged concerns over the financial viability of such projects.
Following recommendations of a Cabinet sub-committee led by Revenue and Horticulture Minister Jagat Singh Negi, the government approved a uniform structure under which all eligible projects — irrespective of whether they have signed Implementation Agreements — will pay 12 per cent free power royalty and one per cent LADF.
Officials said more than 500 small hydel projects would benefit from the revised norms.
“The relaxation is expected to unlock investments of nearly Rs 20,000 crore and help restart several stalled projects,” an official said.
