Centre Mulls Merger Of Hydropower PSUs To Help Bridge Solar Energy Gap

The government is reportedly considering selling two hydro power units owned by NTPC to NHPC to create a single hydropower entity in the country.

The move is part of the government's efforts to enhance efficiency and cost reduction.

In an interview with news agency Reuters, Union Power Minister R K Singh said that a large hydro power company can fulfill the high energy demand at night, as solar projects remain inactive during the dark hours.

Almost 20 per cent of India's peak-hour energy demand during the day is met by solar power projects.

Singh said that the government is contemplating merging the hydro PSUs to form a specialised large entity.

"We have a number of hydro PSUs (Public Sector Undertakings). We are thinking whether these hydro companies can come together as a hydro large PSU. Then it becomes a specialised hydro company," Singh was quoted as saying.

India's top power producer, NTPC, bought hydro firms THDC India Ltd and NEEPCO for $1.34 billion three years ago as part of the government's consolidation plan.

Power ministry's proposal to merge existing hydro PSUs into one large entity aims to create a single company for improved management, expertise, cost reduction, and handling of related challenges.

Hydropower projects in India face long delays due to objections from environmental and religious groups.

According to the report, protests and land clearances issues are partially responsible for the fall in hydropower's contribution to India's energy to decline from 49 per cent to 11 per cent over the last 15 years.

After THDCIL and NEEPCO merge with NHPC, the new entity will possess a total of 20 GW of hydro assets. Presently, NHPC, a state-owned company, owns 12 GW of hydro assets.

The minister reportedly did not give details of other companies that could be merged into NHPC.