Coming Up, $2.6 Billion Mega Hydropower Project Near China Border

India is close to starting a mega hydropower project that has been in the works for 20 years, a key step in the country's energy transition.

State-run NHPC Ltd. will start trial runs in July for the Subansiri Lower project that runs through the states of Assam and Arunchal Pradesh.

The first unit is expected to be commissioned in December, according to finance director Rajendra Prasad Goyal. By the end of 2024, all eight units will be commissioned, he said.

Hydropower, with its ability to quickly respond to fluctuations in electricity demand, is seen crucial for balancing the grid as intermittent generation of solar and wind power rises. However, the 2-gigawatt project, started in 2003, was delayed by protests and litigation, driven by concerns over environment damage.

The cost of the project jumped to $2.6 billion, more than three times the original estimate. The National Green Tribunal allowed the work to resume in 2019 after eight years of suspension.

"We need to get nearly 40 approvals from different departments before we start building a hydropower project. All the scrutiny should be done at this stage," Mr Goyal said. "Any stoppages after the construction has begun is problematic."

Large dams are also country's way of boosting local economies in areas along its tense borders with China and Pakistan. As Subansiri approaches conclusion, NHPC is finalising plans to award construction orders for the 2.9-gigawatt Dibang project, the biggest hydropower plant India has planned to build.

To spur hydropower, the government has given large dams clean energy status. This forces provincial power distributors to prioritize purchase of hydropower ahead of electricity produced from fossil fuels.

The government has also agreed to give budgetary support in some cases on civil construction and flood moderation work.