Mumbai, Jul 30 (IANS): In a major policy initiative, the Maharashtra Cabinet chaired by Chief Minister Eknath Shinde on Tuesday approved to carry out renovation, modernisation, degradation, and life extension (RMU&LE) of the old hydroelectricity plants on lease, renovate, operate and transfer (LROT) basis.

The move will initially cover hydroelectric power projects of over 167 MW which are mainly irrigation projects where power generation is incidental. The government will initiate the RMU&LE process later for projects of 2411,5 MW which are used mainly for power generation.

For the implementation of this policy, two categories of hydroelectric power projects have been made based on water consumption. Category one will include projects whose main objective is power generation. Renovation and modernisation of such projects will be done by the Maharashtra State Power Generation Company (MahaGenco).

Category two will include irrigation and power generation projects. The renovation and modernisation of these projects will be done through competitive bidding.

The Chief Minister’s Office said that the government will not make any capital investment, but it will annually earn a revenue of Rs 507 crore through threshold premium, upfront premium, 13 per cent free electricity, lease, and intake maintenance charges.

Out of the 25 projects owned and constructed by the Water Resources Department (WRD), nine are independent hydropower projects (IPP) of 2411.5 MW capacity. In these, water is used only for power generation and the projects are important for stability and management of the grid.

"Considering the strategic importance of these projects, MahaGenco will carry out RMU&LE works of these IPPs after the expiry of their 35 years of normative life," read the Cabinet note.

In the remaining hydroelectric projects of 167.45 MW and six others with 9.575 MW capacity, where power generation is incidental to irrigation and/or water supply, releases will be carried out on LROT basis.

Some of the major projects which can be leased out to private players include Yeldari (22.5 MW), Bhatghar (16MW), Paithan (12 MW), Pawna (10 MW), Khadakwasla (8MW+8MW), Ujani (12 MW), and Bhatsa (15 MW), among others.

The project shall be allotted through a bidding process where MahaGenco is also allowed to participate. The term of the lease will be 25 years from the commercial operation date.

According to the objectives of the policy, it will give about 25 years beyond the project's normative life; improve the performance of the over-lived hydroelectric projects in terms of efficiency, output, availability, and reliability; converting existing base load stations to peaking stations for the benefit of the electricity grid; reducing maintenance requirements and ensuring ease of operation and safety; and protection of consumer interests by timely completion of RMU&LE works without cost overrun and minimum loss of generation.

The projects to undergo RMU&LE will be identified based on their performance records. A residual life assessment (RLA) study will be carried out to assess the health and residual life of every component of the hydro generating unit. A detailed project report (DPR) will be filed to avoid further complications, especially related to the cost.