In a first, T.N. approves small hydel policy to support rural electrification 

In a first, the Tamil Nadu government has approved a new policy on small hydel power projects, encouraging private developers to generate electricity for self-consumption or third-party sale.
The State Government, in approving the ‘Tamil Nadu Small Hydel Policy – 2024’, said that developing small hydel projects ranging from 100 kW to 10 MW (with unit size of 5 MW each) showcased a significant opportunity to enhance local energy production and support rural electrification. These small hydel projects could be developed with minimal environmental impact, providing a reliable and sustainable energy source complementing the State’s broader energy strategy.
As Tamil Nadu continued to embrace renewable energy, the policy would allow private developers to establish small hydel projects for captive use (self consumption), third-party sales within the State, and sales to distribution companies (Discoms) to meet the Renewable Power Purchase Obligation (RPO) as specified by the Tamil Nadu Electricity Regulatory Commission (TNERC).
The policy aimed at promoting renewable and clean electricity by encouraging the development of small hydel projects on canal systems, rivers, and streams, tapping into previously unused clean energy sources. It sought to attract private sector participation through incentives and supportive measures, driving the growth of small hydel infrastructure in the State.
In addition to fostering environmental awareness, the expansion of small hydel projects was expected to generate employment, enhance skills in the renewable energy sector, and encourage research, development, and innovative technologies. The policy would take immediate effect and remain in operation for five years, after which it would be reviewed.
The policy, drafted by the Tamil Nadu Green Energy Corporation Ltd. (TNGECL), specified that any individual, company, or association – whether incorporated or not – was eligible to set up small hydel projects for captive use, third-party sale within the State, or sale of power to the State Discom. TNGECL would serve as the nodal agency for registration, granting in-principle approval, and facilitating the implementation of the Tamil Nadu Small Hydel Policy, 2024.
Water utilisation norms
The policy stipulated that developers/promoters must not impound water and that after power generation, the water should be released back into the same stream within a short distance as determined by the relevant clearance for the power generation plant, ensuring minimal disruption to the stream’s natural course.
The availability of canal water for hydro electric generation would be incidental to its primary use for drinking, irrigation, and other purposes. Hydel project developers would have no right to demand water release in canals, rivers, or streams solely for power generation.
Small hydel projects would be allocated through an Expression of Interest process every six months. “By implementing this policy, Tamil Nadu aims to harness the potential of small hydel projects to enhance energy security, support rural development, and contribute to a sustainable energy future,” the policy stated.