Sikkim’s Hydel Story

The journey from 50KW in 1927, 30MW in 1994, to 2,200MWs in 2018

Pema Wangchuk Dorjee

The first hydropower project commissioned in Sikkim was a micro-hydel on Rani Khola below

Gangtok in 1927. This one had an installed capacity of a mere 50 KW and later, even the first hydel

of any real consequence was a small hydro venture in the year 1965 - the 2 MW Jali Power House on Sang Khola, around 30 KMs away from the capital, Gangtok, along the national highway. The most recent hydel project to begin generation in Sikkim is in the mega-hydel category – the 1,200 MW Teesta Stage III, built high in the North district at Chungthang and commissioned in the year 2017.

Much has changed in the hydel scenario in Sikkim in the 53 years between the two events (or 90

years if the 1927 project is counted as the take-off point instead). Even as late as 1978, Sikkim

generated only 3 MWs from three hydel projects. It now feeds around 2,200 MW into the power

grid and has around 19 projects in various stages of exploration and completion.

While big hydel in India was more about “development”, industry and the march of science, in

Sikkim, it is apparent that it was a luxury, almost an indulgence in the initial years, not as much

linked to the economy as it was to flaunt an acquisition and service an elite sliver of the society. In

fact, in the early years, Sikkim did not even feel it necessary to have a Power Department and the

small hydels were kept under the charge of the Public Works Department here.

And that sentiment is how things continued right until the 2000’s when hydel was served up as an

economic deliverer of use for much more than electrifying every home in the State.

But it is not as if Sikkim did not flirt with the idea of establishing big hydel even before it merged

with India in 1975.

Sikkim has lived with the ferocity of the Teesta ever since people have lived here. Stories of its floods and potential for damage pepper its myths and living memory. The river is ferocious when on a free run in Sikkim, gathering strength and megawatts of energy as it cascades from a high of around 5,200 mtrs where it is born to 300 mtrs, the height at which it exits Sikkim, a mere 175 kms

downstream.

Recognition of this hydel potential is however a rather recent discovery. That said, initial

reconnaissance by the Central Water Commission in 1974 only reaffirmed what technocrats and

even lay observers had noticed much earlier.

In his book, “The Life and Times of a Plantsman in the Sikkim Himalayas,” respected forester and a

former Chief Secretary to the Government of Sikkim, KC Pradhan, shares that the Forest Department “encountered” Teesta’s stretch between Chungthang and Mangan from 1955 to1976 when timber scantlings and logs were floated down from Lachung in North Sikkim to Bardang near Rangpo in East Sikkim. The river, he recalls, was so “torrential” in the Chungthang-Mangan stretch that they would lose most of the timber in the huge whirlpool below Singhik (near Mangan in North Sikkim).

Elsewhere in the book, he also mentions how harnessing the Teesta for hydroelectricity was a

“cherished dream” of the King of Sikkim who had his eyes on the same stretch of the Teesta.

This idea was, however, not explored in any earnest, probably because either the technology was

not available, the logistics too challenging or the finances required too astronomical. Ironically, this

is still a pending project. The Teesta Stage IV hydel project is proposed on the same site as the one

which had so excited Sikkim’s officers with its potential decades ago and where so much of its

timber floated from the coniferous forests up north had been lost. While Teesta Stage III upstream

and the Teesta Stage V a few kilometres downstream have been commissioned, Stage IV remains in

animated suspension, held back by disagreement between the affected landowners and a clear

disinterest in the State Government to invest the proactive engagement with which other hydel

projects have been facilitated.

But we get ahead of the story here.

That the mountain rivers held tremendous hydel potential was always known, and Teesta’s promise

for hydroelectric development was officially endorsed for the first time by a team of experts from

the erstwhile Central Water & Power Commission following a preliminary reconnaissance survey in 1974. They believed that the river could be harnessed under a “cascade development” format and pegged the river’s hydroelectric potential at 3,735 MW.

This was also the report which first proposed the cascade development approach of power

generation in six stages on the Teesta, spanning nearly the entire course of the river in Sikkim. Four

of these “stages” have been explored and two have since been commissioned. The remaining little

over 4,000 MW potential of Sikkim were scoped on the State’s other rivers and streams.

But, for whatever reason, the policy-makers in Delhi never really bothered with exploiting this

potential at the time, and projects in the hills were mostly small and micro, commissioned

essentially to meet local needs. Since the hill states also lacked any substantial industries, the local

demand was low and the projects remained small, often times not even enough to service the

domestic requirements. “Load-shedding” was a common occurrence in Sikkim in the 1990’s even

though its peak domestic demand could not have been any more than 30 MWs at the time. From

here, one could veer off on a whole rant about how the Centre prioritises policy interventions for

the margins, but we leave that for some other time. That said, as of 2015-16, as per the Sikkim State Electricity Regulatory Commission, the total connected load in Sikkim had marched ahead to around 130 MW, a substantial increase, but still way lower than what the State is now generating.

Earlier, Sikkim would meet its electricity requirements from the Chukha Hydel Project in Bhutan,

Farakka Super Thermal Power Station in West Bengal, and Raman and Rangit Hydel Projects in West Sikkim. This supply used to be drawn through the West Bengal transmission system which was in rather poor condition and resulted in additional interruptions and frequent tripping.

Meanwhile, real interest in the resource coursing through Himalayan streams was piqued in the late 1990’s when the country woke up to the mismatch between the demands of “development” and the energy required to power the aspired-for growth rate. Increasing dependence on fossil fuel-based generation of electricity and the expanding gap between coal and hydel raised further concern. The policy makers were also convinced that the existing public sector undertakings would not be able to meet the targets and a major policy switch was promulgated.

A lot of factors came together in the 1990’s leading to a major change in how the country proposed

to generate electricity and meet its energy requirements. The economic liberalization effected at the time, apart from many other things, raised GDP growth rates in priority and the industrialization that it was to piggy-back on required copious supplies of energy, power which the country realized it was not generating enough of.

Once India emerged from its closed economy regime, it quickly accepted that to remain globally

competitive, it would need reliable energy supply with electricity a necessary component to meet

the requirement.

When the policy-makers looked around, they also noticed that the dependence on coal and fossil-

fuels had grown to unsustainable levels even as the hydel resource had remained largely untapped.

Conventional energy sources in the country relied unhealthily on coal-fired thermal plants.

Government records reveal that the ideal hydro-thermal ratio of 40:60 had been achieved in the

1960’s, from then onwards, energy production became increasingly coal-dependent arriving at a

26:65 ratio in favour of coal in the 1990’s. This dependence on non-renewable resources, and

studies which revealed that 77% of the untapped hydropower potential was located in rivers in the

North and Northeast regions, both of which lacked any big-ticket industries or investment in

infrastructure, were underlined by consultants and experts to recommend policy changes to allow

for quicker processing of hydel projects.

Apart from claiming minimal environmental impact, it was also increasingly argued that hydel

generation was best suited to service the unique nature of power consumption in the country which oscillated dramatically between peak and low demands. Hydel projects could be allowed to stay idle during low demand hours, it was pointed out, and since reservoirs allowed for them to generate electricity literally at a moment’s notice (as against what must be tedious processes of firing up thermal plants), experts projected it as a “desirable asset in any power system”.

The ease with which hydropower plants can be brought on stream for higher generation and backed down during off-peak periods, makes hydropower an important tool for electricity system balancing, it was explained repeatedly in vision documents and policy briefs.

The Government of India’s Mega Power Policy of 1995 took heed and sought to correct this situation by opening hydropower projects to private sector development. This sector had thus far been the sole domain of public sector and governmental undertakings.

The planners in Delhi were clearly working on hydel prospects. The Central Electricity Authority in its 2001 preliminary ranking study of the hydroelectric potential of river basins in India, identified 21 large projects in Sikkim to generate 3193 MW. Following this study, the Prime Minister’s 50,000 MW hydropower initiative was launched in 2003 and pre-feasibility reports for 10 projects were prepared in Sikkim.

Even the Sikkim Human Development Report published in 2001 underlined that (at that time in

2001), Sikkim had installed only 0.2% (31MW) of its potential for 8000 MW. The Report had

recommended that Sikkim take up “larger hydel power stations in the Teesta basin through

Independent Power Producers (IPPs)” and undertake “efficient management of the Teesta river

system together with evacuation and marketing of energy from all the stages of Teesta cascade”.

Meanwhile, the Mega Power Policy, apart from extending a 10-year tax exemption and import duty

exemption also undertook for the government to obtain land and secure the required environmental clearances to interest private sector participation. This policy has since been further tweaked to reduce the MW production levels so that more projects could get classified as mega-projects and partake in the attendant benefits.

Perhaps of as much significance was the fact that no real experience in the field was required before venturing on hydel project development since private players had not been allowed into this field till then. Further, the introduction of the Special Purpose Vehicle mode, by which new and exclusive to the project companies could be floated for project execution provided extra cushioning for consortiums to come together and spread the risk and liabilities.

This policy arrived in Sikkim along with the North East and other Himalayan states in the year 2006

with amendments which made the entry of private players even easier and relaxed the procedures

further. To get a sense of how big hydel had still not caught Sikkim’s attention in any seriousness one needs to look at the ruling Sikkim Democratic Front’s manifesto for the 2004 Assembly Elections. In the section devoted to infrastructure, the manifesto, even though it identifies increased power generation among its bigger plans, speaks only about a series of mini and micro hydel projects.

The amendments to the Mega Power Policy in 2006 changed all that, and with it, the floodgates

literally opened for hydel project exploration and a string of MoUs were signed and Letters of Intent were issued. Keeping rather quick pace, 24 letters of intent were issued to private and public sector undertakings for hydel project development by the Government of Sikkim within around a year of this policy arriving here.

These projects boasted a combined installed capacity of 4,694 MW and were originally scheduled for completion within the 11th Five Year Plan (2007-12). For a variety of reasons, these deadlines were not met, and while a few of the projects have been commissioned, some have since been scrapped, some have changed hands between developers and some others delayed.

Of these 24 projects explored for PPP development in the mid-2000’s, five have been commissioned in the recent years – the 110 MW Chujachen HEP, 96 MW Jorethang Loop HEP, 96 MW Dikchu HEP, 97 MW Tashiding HEP and the 1200 MW Teesta Stage III HEP. These projects and those which had been commissioned before private players arrived in the scene, have Sikkim generating 2206.70 MW as of March 2018.

On the revenue front, against the Rs 3.87 cr that Sikkim earned from sale of power in 1994, in the

financial year 2016-17, it raked in Rs 169 cr. This amount, even though a substantial jump from

where it had started, still pales in comparison to the Rs 1,337.29 crores projected by way of hydel

revenue in 2012 by the “White Paper on the Development of Hydropower Resources of Sikkim”

published in the year 2009. The fact that not all projects in the pipeline at the time have been

completed, and some not even initiated, has resulted in this mismatch. Be that as it may, this

exaggerated faith in the promise of hydel also explains the complications and unforeseen costs (both material and intangible) that have punctuated Sikkim’s hydel story.

Following the introduction of the Mega Power Policy in 1995, the first big project undertaken in

Sikkim was the 510 MW Teesta Stage V hydel project at Dikchu on the border of East and North

districts. This was taken up by the NHPC (private players had still not arrived at the time) and has

since been commissioned.

It was also with this project that Teesta’s “potential” for hydel was reinforced, ironically, through a

study mandated by the Union Ministry of Environment & Forests while giving environmental

clearance to Teesta Stage V. The environmental clearance in May 1999 came with the stipulation

that “no other project in Sikkim will be considered for environmental clearance till the Carrying

Capacity Study (of the Teesta Basin) is completed”. This study was eventually carried out by Centre

for Inter-disciplinary Studies of Mountain & Hill Environment (CISMHE) and was funded by NHPC.

The study started in 2001, and the report came out in 2007. The formality completed, and in quick

follow-up, private players were ushered in quick speed. In pursuit of achieving “total targeted

capacity” of 5,000 MW by the year 2015, the Energy & Power Department/ Sikkim Power

Development Corporation Ltd had, by 2015, allotted 25 hydroelectric power projects with a total

installed capacity of 5,284 MW to various IPPs.

The CISHME report on the carrying capacity of the Teesta Basin, while it flagged concerns ranging

from environmental to socio-cultural impacts, also recorded that “water availability studies show

that there is adequate water in the Teesta river system to take care of the proposed developmental

activity particularly the hydro-power generation.”

Earlier, the total hydro-power potential of Sikkim as assessed by the Central Water Commission was

at around 8,000 MW, out of which around 2,000 MW is in the micro, mini and small hydro

categories. Remaining 6,000 MW would fall either in the small or mega size hydro scheme. This, as

per the Energy & Power Sector Vision of the Government of Sikkim released in 2015.

It is clear then that there is more than one estimate on Sikkim’s hydel potential even though the

8000 MW figure is the most referred number. At the time of writing this, the State was generating

2,206.70 MW, still a long way short of the projected potential or even halfway to the 5,284 MW

worth of hydel projects it has awarded to developers. There are hydel projects in Sikkim still in the

process of excavating and tunneling and some which have not yet begun on ground and others

which appear intractably stalled.

Sikkim’s hydel story continues.