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Small Hydro Power (SHP) in India

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September 12, 2026

Prelims: Current events of national and international importance | Environment

Why in News?

The Union Ministry of New and Renewable Energy (MNRE) has highlighted the role of Small Hydro Power (SHP) in India's clean-energy transition, especially in remote and geographically challenging regions.

  • Small Hydro Power (SHP) – It is a renewable energy system that generates electricity using the natural flow of water from rivers, streams, or canals, typically with an installed capacity of up to 25 megawatts (MW).
  • Operational Principles
  • Water Flow – The system harnesses the kinetic or potential energy of moving water.
  • Absence of Large Dams – Most small hydropower (SHP) systems employ a run-of-the-river design, diverting a limited portion of water through a turbine without constructing large reservoirs.
  • Electricity Generation – The movement of water rotates the turbine, which is connected to a generator that produces renewable electricity.

small hydrogen plants upsc 2026

Small Hydro Power Development Scheme
  • Implementation Period – Fiscal Year 2026–27 to Fiscal Year 2030–31 (five years).
  • Nodal agency – Ministry of New and Renewable Energy (MNRE)
  • Total Financial Outlay – Rs.2,584.60 crore
  • Implementing/Financing agencies
    • The Indian Renewable Energy Development Agency (IREDA) serves as the primary financing institution.
    • Coordination occurs with banks and multilateral institutions, such as the Asian Development Bank (ADB) and the World Bank, to secure patient capital.
  • Small Hydro Database – It is prepared by the Alternate Hydro Energy Centre (AHEC) at IIT Roorkee, maps the potential for small hydropower (SHP) projects.
  • Objective – To achieve an additional 1,500 MW of new small hydro power (SHP) capacity through projects ranging from 1 MW to 25 MW
  • Capacity addition – Provide financial support to develop approximately 1,500 MW of SHP through eligible projects.
  • DPR pipeline – Incentivize States to prepare Detailed Project Reports (DPRs) for approximately 200 SHP projects, establishing a pipeline for future investment.
  • Geographic focus – Priority will be given to hilly states and the North-Eastern region.
  • Challenges  
  • Extended development timelines – Hydropower projects typically require several years to complete.
  • Clearance – Delays in obtaining forest, environmental, and right-of-way approvals impede project execution.
  • Financial need – Significant capital expenditure and extended gestation periods increase the demand for limited long-term patient capital.

Reference

DD India | Small Hydro Power (SHP) in India
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