The Indian government has approved the introduction of a new policy meant to promote the hydropower sector and declared that large hydropower projects will now be considered as a renewable energy source part of the non-solar renewable purchase obligation (RPO). Projects will be commissioned after the notification of these measures will be included in the non-solar RPO.
Previously, only hydropower projects smaller than 25 MW were categorised under the renewable energy programmes and were accordingly covered under the non-solar RPO. This new policy change removes the distinction between small projects of up to 25 MW capacity and large projects above the 25 MW threshold and will help the country to source 40% of its total power generation capacity from renewable energies by 2030, as stipulated in its submitted Nationally Determined Contribution (NDC).
In January 2019, the Indian electricity regulator Central Electricity Authority (CEA) stalled about 16 hydropower projects with a total combined capacity of 5,950 MW due to financial constraints, prompting the government to set up a new hydro policy as soon as possible. This represents approximately half of the hydropower projects currently under construction in the country in terms of capacity. Out of the 16 power plants, 10 are paralyzed due to financial stress. The introduction of the aforementioned policy could be the first step for the unfreezing of these projects.