Kerala Shelves 3 Small Hydel Power Projects As Land Owners Seek Huge Compensation

A hydroelectric power plant in Kerala. (representative image)

Kerala has shelved three small hydel projects of 2 MW each as the persons who could be affected by these are demanding a huge compensation. Malayalam daily Manorama reported that two more similar projects have been shelved on environmental grounds since the state forest department has objected to them.

Kerala has been looking to increase its power production capacity and small hydel projects were seen as one way to go about it. The plans, in the pipeline since the Oommen Chandy government’s time, are to set up 20 small hydel projects that could help the state produce 47.4 MW of power.

The Small Hydro Cell of the State’s Energy Management Centre feels that though 2 MW projects are small, the government would still need to acquire lands that could be submerged near the banks of rivers where these projects come up. The daily quoted the director of the Energy Management Centre as saying that some agricultural lands would be submerged but people owning them are demanding a high compensation that will push up the production costs significantly.


The land acquisition costs could push up the per unit production cost from Rs 4 to Rs 4.50. This is very high considering the fact that power can be purchased cheaper from the power exchange these days. Prices of renewable energy sources are half the cost and this has made the Kerala Government rethink its plans.

The Kerala Cabinet, which decided on 9 August to shelve the projects, feels it would far cheaper to purchase power. Currently with its reservoirs filled to capacity, thanks to torrential rains, Kerala is selling power to Bihar besides through power exchange. The power sale is expected to fetch it at least Rs 1 crore a day what with nearly 100 MW being sold.

The forest department opposed the other two projects as they were schedule to come up inside the forest and it will violate the Forest Protection Act. The Kerala Government plans to tap private investments to augment its power production capacity through small hydel units.