Kerala's power dreams get a rude jolt

Kerala's power dreams get a rude jolt

Thiruvananthapuram: The Power department's big push to involve private players in hydel generation has suffered a major setback. The Cabinet, which met here on Wednesday, has decided to shelve five of the 20 small hydel projects picked by the Small Hydro Cell of the Energy Management Centre (EMC). The five projects were of 2MW each. The original plan was to generate 47.4 MW from the 20 private small hydel projects. Now, with five projects grounded, 10 MW stands deducted.

Unlike in the case of big hydel projects like the 163-MW Athirappilly project, not all of the objections were due to environmental concerns. Two projects – planned at Kazhuthuruthy (Kollam) and Kuthirachattam (Kasaragod) – were shot down by the forest department for ecological reasons. But the three others - in Kokkamullu (Kannur), Urumbini (Pathanamthitta), and Malothi (Kasaragod) – have been dropped because of, as a top power official put it, 'unrealistic local demands.' The huge compensation sought by the affected persons, it is said, had pushed up land costs to unsustainable levels.

Even a small 2-MW project will lead to the submergence of areas along the banks of the river it dams. “Some agricultural areas would be lost but people in these three areas have demanded a compensation that will push up the project cost considerably,” said K M Dharesan Unnithan, the director of EMC. “The private players had stated that if the compensation package asked for by the affected people was agreed to, then the cost of generation would go up to levels that would make the projects non-viable,” he added. They say the cost of generating one unit of power would have scaled up to Rs 4 and Rs 4.5.

This is considered too costly for hydel power, which the KSEB generates for less than Rs 2 a unit. “Besides, KSEB now gets power from outside sources at a much cheaper rate,” the EMC director said. “If KSEB continues to be in a position to secure cheap power from other sources, which likely looks the case, the future of these projects would be doomed,” he added, explaining why the EMC recommended the shelving of the projects.

As for the 2-MW projects in Kazhuthuruthy (Kollam) and Kuthirachattam (Kasargod), they were inside the forest. The Kazhuthuruty project area was fully inside the forest area, and half of the proposed Kuthirachattom project would have been inside the forest. “The Forest Department had invoked the Forest Conservation Act. If the state wanted to go ahead with these projects, the fight would have to be taken right up to the Supreme Court as it involves the diversion of forest lands for non-forest purposes,” Dharesan Unnithan said.

Importance of private power

Encouraging private participation in small hydel generation has become imperative in the context of the yawning delays in the commissioning of mini and small hydel projects. The 60 MW Pallivasal augmentation project has been on for the past 14 years, and only 70 per cent of the project has been complete. The 40 MW Thottiyar project has been on for 12 years, and only 60 per cent has been complete. The 3.5 MW Adyampara project took 10 years. The 3 MW Kakkayam project has been on for over eight years, and 32 per cent of the work remains to be completed. At least 13 small hydel projects had missed their deadline for commissioning by five to 13 years.

Crushing delays

The inordinate delay is causing the kind of cost overruns a cash-starved public utility like KSEBL cannot bear. For instance, the Pallivasal project began with an estimate of Rs 222.5 crore in 2007. As on October 31, 2016, Rs 245.91 crore has already been spent. KSEBL itself estimates that it would require Rs 250 crore more to complete the project, a more than 100 per cent escalation. For Thottiyar project, KSEBL had already utilised Rs 62 crore. But the concessionaire, citing contractual violations, has abandoned the project.

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