Balancing the role of small hydropower in the Northeast

Union Minister of State for New and Renewable Energy and Power Shripad Yesso Naik emphasises the distinctive role of Small Hydro Power (SHP) in India’s clean and renewable energy transition, which is particularly important in the Northeast. The region is endowed with significant small hydropower potential, yet the push for large hydropower projects with big dams despite inherent ecological risks remains paradoxical.  The Union Minister’s deliberate spotlight on SHP makes the energy strategy for the region sound more pragmatic by providing dependable renewable electricity closer to the point of consumption, strengthening decentralised generation, and contributing to the resilience of the power system, particularly in geographically challenging areas.   While addressing the curtain-raiser programme for the dedicated SHP session at the Bharat Renewable Energy Summit & Expo 2026 held in New Delhi, the Union Minister also asserted that the sector can create employment, support local enterprises and generate economic opportunities in remote areas while maintaining sensitivity towards ecology and local communities. This assertion deeply resonates with the region where ecology and livelihoods are profoundly interconnected. The central government’s push to build a diverse, balanced, and resilient energy portfolio that aligns with the country’s geography, resources, and development needs highlights the importance of the Small Hydro Power Development Scheme and its potential to fully unlock the region’s SHP capabilities. As the upper cap of electricity generation from an SHP project is fixed at 25 megawatts, the establishment of SHP projects provides a viable and sustainable alternative to large hydropower projects in the region. The SHP potential for the region is estimated at 3261 MW, against which the installed capacity is 386 MW, i.e., less than 12% of the total potential. The data clearly indicates the need to prioritise SHP in the region over large hydropower projects. The central government has given administrative approval to the scheme for the period 2026-27 to 2030-31, with an outlay of Rs. 2,584 crore and a target of approximately 1,500 MW of new SHP capacity. India has so far harnessed 5.2 gigawatts of SHP against the potential of 21 GW assessed across more than 7,100 identified sites. The scheme’s provision of higher Central Financial Assistance (CFA) of 30% of project cost has been kept for Northeastern states and districts with international borders for the setting up of new SHP projects with a capacity of 1 to 25 MW, with international borders for the setting up of new SHP projects of capacity 1 to 25 MW as compared to 20% for other locations, providing a competitive advantage for power developers to undertake such projects in the region. One of the key objectives of the scheme is to reduce the tariff of SHP-generated electricity, making it more competitive and affordable to DISCOMs/state governments so that the benefits of CFA can be passed on to the end consumers. The scheme mandates that projects must be completed within four years from the start of construction, and it includes a provision to reduce the Central Financial Assistance (CFA) by 4% of the total eligible CFA sanctioned for each quarter of delay, thereby ensuring timely project completion. The Assam government already announcing plans to establish 11 new SHP projects with 137 MW capacity is a laudable initiative. The state must add more clean power to its grid to meet rising peak hour demand, which is essential for maintaining a climate-compatible energy generation pathway. As the state’s current installed SHP capacity is 34 MW against a total assessed potential of 201 MW, developing the new SHP projects will unlock nearly 85% of its total potential. Arunachal Pradesh must play a crucial role in unlocking the region’s SHP potential, as it possesses the highest SHP potential among all northeastern states. The SHP potential of Arunachal Pradesh is assessed at 2064 MW, but the state has so far developed only 140 MW of installed SHP capacity, which is less than 7% of the identified potential. However, the state’s priority on large hydropower projects is determined by a combination of factors, including the scope of revenue generation from huge hydropower potential (40% of the country’s total hydropower potential) and geopolitical and strategic factors, such as the scope of revenue generation from huge hydropower potential (40% of the country’s total hydropower potential) and geopolitical and strategic factors like establishing first user rights on transboundary and shared rivers. Downstream concerns in Assam are associated with large hydropower projects in Arunachal Pradesh, which trigger adverse impacts on the natural flow of inter-state rivers—specifically, the tributaries of the Brahmaputra—and exacerbate climate change issues, including glacier melting at the origins of these rivers in high-altitude lakes of the Himalayas. This situation poses risks of dam collapse, similar to incidents that occurred in Sikkim and Nepal, emphasising the necessity of adopting climate-compatible and ecologically sustainable hydropower generation practices. This situation demands a calibrated balance between large hydropower development and SHP development to moderate risks and enhance the overall sustainability of hydropower generation in the region.  Producing more electricity in the Northeast is vital for its economic growth; however, the region’s ecological fragility necessitates a pragmatic strategy that prioritises SHP as a safer, low-impact alternative.