Source: NDTV
Subject: Government Scheme
Context: The Union Cabinet has approved the ‘Small Hydro Power (SHP) Development Scheme’ for FY 2026-27 to FY 2030-31 with an outlay of ₹2,584.60 crore.
About Small Hydro Power (SHP) Development Scheme:
What it is?
- The SHP Development Scheme is a centrally sponsored renewable energy initiative to promote installation of small hydro power projects (1–25 MW capacity) across India, particularly in remote and difficult terrains.
Launched In: March 2026 (for the period 2026-27 to 2030-31).
Organization Involved: Ministry of New and Renewable Energy (MNRE), Government of India.
Aim: To exploit the untapped small hydro potential in remote and rural areas, reduce transmission losses through decentralized power, and achieve the target of 500 GW of non-fossil fuel capacity by 2030.
Key Features:
- Financial Outlay: A total budget of ₹2,584.60 crore has been allocated, which is expected to leverage a total investment of approximately ₹15,000 crore in the sector.
- Differential Central Financial Assistance (CFA):
- NE & Border States: Higher support of ₹3.6 crore/MW (or 30% of cost, max ₹30 crore/project).
- Other States: Support of ₹2.4 crore/MW (or 20% of cost, max ₹20 crore/project).
- Pipeline Creation: The scheme earmarks ₹30 crore specifically to support state and central agencies in preparing Detailed Project Reports (DPRs) for 200 future projects.
- Atmanirbhar Bharat Focus: To qualify for support, projects must leverage 100% of plant and machinery from indigenous (domestic) sources.
- Decentralized Nature: By focusing on projects between 1-25 MW, the scheme promotes distributed generation, which requires minimal long-distance transmission lines and reduces grid losses.
Significance:
- Unlike large hydro projects, SHPs avoid large-scale land acquisition, massive deforestation, and the displacement of local communities.
- Reduces need for long transmission lines, lowering transmission losses and costs.
