Dear DOE,

Please consider the following while validating this project:

1. Why has the PP estimate the market returns based on a 30 year period? Indian economy underwent significant changes during 1990. Hence the period from 1990 onwards should be considered as a reasonable period. PP may argue saying the longer period is more conservative to take into account market fluctuations, which is not acceptable. PP has considered longer period to calculate a high market return. DOE is requested to justify the vintage considered for calculating the market premium.

2. Why has the PP considered a 3 year period for beta calculation? Why not 5 years or 10 years?

3. Why does the PP consider the BSE sensex to be appropriate index as compared to other indices on BSE such as BSE 500 or BSE 200 or BSE 100. Also NSE is another index which could be considered?
BSE sensex only contains 30 industries. Is this acceptable?

DOE is requested to provide the response/evaluation to the comments on the mail id: clean.development.mechanism.india@gmail.com

Author wishes to remain anonymous.

Regards

Comments on 
24 MW Dummagudem Hydro Project 
of SLS Power Corporation Limited

Any effort that helps to bring down pollution as well as global warming needs to be welcomed. This is particularly the case with renewable energy sources like small hydro power plants. The 24MW Dummagudem small hydro power plant is one such case.

But caution should be taken to see that the project actually contributes to lessening global warming, that too to the extent that the developers claim. 

The details of this project made available on the site of the UNFCCC gives raise to some doubts about the efficacy of this particular project in addressing global warming. In this note an attempt is made to explain these doubts.

I 

The Government of Andhra Pradesh (GoAP) is going to construct a multipurpose irrigation project on Godavary river at Dummagudem with the coordinates of Longitude: 80-53-15 and Latitude: 17-52-30. It consists of 320 MW hydro electric plant and a tail pond downstream side of the project. With this multipurpose project there will be no space for the proposed small hydro power project. In fact the existing anicut/barrage will disappear because of the GoAP’s multipurpose project and no left flank will be left for the small hydro project. In sum, the proposed 24 MW small hydro power plant by SLS Power Corporation Limited is impracticable.   

II

The project is being set up on left flank of the existing anicut/barrage that is source of irrigation for the farmers in that area. In order to create a head of 4.8 meters some quantity of water need to be impounded at the anicut/barrage. The farmers will be deprived of this water. Also, as the design of the project shows the water used by the hydro electric plant will be discharged in to the river but not in to the canal. This leads to an apprehension that this project will interfere with irrigation.

If the farmers are deprived of the irrigation facilities they will be forced to explore for alternative irrigation water supply sources. A look at the Sreeramsagar irrigation project in Godavary basin provides the likely alternatives the farmers will fall back upon to meet their irrigation water needs. Because of silt in the storage area the irrigation capacity of this project declined considerably. The farmers in this area to overcome this water shortage resorted to electrified bore well irrigation. This electricity is supplied from the grid. In Andhra Pradesh major part of the electricity comes from coal fired thermal power plants. This shows that in the absence of environmentally friendly irrigation farmers have resorted to pumpsets energized by conventional power sources. 

Under Dummagudem anicut/barrage irrigated system also in the absence of regular water supply farmers will be forced to depend on electrified bore wells. Instead of bringing down global warming this project may have opposite impact. This aspect needs to be closely examined.

III

The document shows that the project in question will be operating at a PLF of 49.18%. This may be on higher side. The Andhra Pradesh Electricity Regulatory Commission (APERC) in its tariff order for renewable energy plants dated 20-03-2004 considered 35% PLF appropriate as the output of power from mini hydro plants is dictated by irrigation needs (paragraph 66). APERC based this estimate on historical water availability information. 

The above PLF of 49.18% is not possible on other count also. Besides the Dummagudem multipurpose irrigation project with hydro electric plants and tail pond project the GoAP is planning many irrigation projects upstream of Dummagudem on Godavary river as a part of massive irrigation programme called ‘Jalayagnam’. Because of these projects in future water availability at Dummagudem will be low and it may not be possible to achieve 49.18% PLF.

IV

The Document shows that this 24 MW mini hydro plant’s capital cost would be Rs. 184.35 crore. Per MW capital cost would be Rs. 7.68 crore. Here it is to be noted that the APERC in the above mentioned order considered that capital cost of Rs. 3.625 crore/MW would be reasonable for small hydro power plants (paragraph 65). The capital cost proposed by the developers if 100% higher than the capital cost approved by the statutory regulator for similar projects. Besides this, the proposed project is being set up on left flank of the existing anicut/barrage. This should considerably bring down capital cost of the plant.

V

In this Document at one place (A.2) it was mentioned that this plant did not involve the construction of a dam and therefore no negative impacts. At another place in the same document (B.2 (4)) it was mentioned that the project activity would result in new reservoir. Rated head of the project is 4.8 meters. This contradiction in the claims of the Document needs to be examined.   

VI

From the Document it appears that the project in question has not obtained clearance from the Ministry of Forests and Environment of Government of India.
                  
From:
M. Thimma Reddy, 139, Kakatiya Nagar, Hyderabad – 500 008, India  

Following comments are submitted on the proposed 24 MW Dummagudem hydro project by SLS Power Corporation Limited.

1.	The 24 MW Dummagudem hydro project of SLS Power Corporation Limited is located on river Godavari at Longitute 80-3-12 & Latitude 17-51-19. However the Government of Andhra Pradesh is contemplating construction of a multipurpose dam and a Hydro Power Project with a capacity of 320MW on river Godavari at a location with coordinates- Longitude: 80-53-15 & Latitude: 17-52-30. Thus it is very clear that the proposed Dummugudem multipurpose dam and hydel project by the Government of Andhra Pradesh falls at the very location where the 24 MW hydro project of SLS Power Corporation is contemplated. Also Government of Andhra Pradesh contemplates construction of tail pond dam down stream of above dam. Thus, both the multipurpose dam and tail pond dam by the Government of Andhra Pradesh, at the above locations, make the proposed 24 MW Dummagudem hydro project of SLS Power Corporation Limited impracticable. Hence the very existence of this project becomes questionable. This aspect needs to be examined.

2.	One more important issue that needs to be examined is that the Government of Andhra Pradesh is also contemplating construction of large scale multipurpose projects at various locations upstream of proposed 24 MW Dummagudem hydro project of SLS Power Corporation Limited, viz. Dam at Kanthanapally, Warangal District, Pranahita-Chevella Lift irrigation scheme, Yellampally lift irrigation scheme etc,. The impact of all these projects on viability of proposed 24 MW Dummugudem hydro project by SLS Power Corporation Limited needs to be examined.

3.	The cost of the 24 MW hydel project is shown as Rs 184.35 cr, which is very high compared to the normative capital cost of mini hydel power projects approved by the Andhra Pradesh Electricity Regulatory Commission based on its study on capital costs of various mini hydel power projects in Andhra Pradesh. As the project capacity of SLS Power Corporation Limited is 24 MW, which is much higher that standard mini hydel power projects, the overall capital cost should have been less, taking into account economy of scales. This aspect needs to be examined.