As per an article in Economic Times (refer), government is using an accelerated approach towards promotion of India’s hydro power assets. A recent progress on this pertains to introduction of tradable hydro certificates (on the lines of RECs). Demand for these tradable hydro certificates will be generated from a separate hydro power purchase obligation, a concept note on which has already been circulated among various stakeholders. A relevant amendment to Electricity Act,on the issue, is also likely to be tabled.
In India, hydro power has huge installed capacity in northern and north-eastern states. This unequal distribution can be fixed by making states procure a certain fixed quantum of hydro power.
India has 144320 MW of potential out of which only 40,000 MW has been commissioned.
Other relevant news on hydro power can be read here.