India – SJVN Luhri Hydroelectric Dam

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SJVN is a joint venture company owned by the Government of India and the State Government of Himachal Pradesh, yet it is a publicly traded company on the Bombay Stock Exchange, and starting in 2011, it has begun selling shares to the public. Luhri, the project under assessment, will be operated as a Public-Private-Partnership (PPP).

Like SJVN’s two existing hydroelectric projects in India, the Luhri dam is located on the Satluj River and aims to provide electricity to Delhi and the five northern states. Energy demand has grown constantly in India over the past several decades, and supply is continually lacking. Himachal has grown wealthy, managing to outpace the rest of India in health, education and infrastructure indicators, owing largely to its energy production.

But environmental activists see real risks to SJVN’s growths strategy. Luhri is the third hydroelectric project SJVN will place on the Satluj River, a watercourse dammed by six existing hydropower projects, with 24 more under construction or in planning. Downstream users of the Satluj say water quality is dropping, and environmentalists say ecosystems and the local climate are changing.

Luhri’s more immediate impact is the resettlement of several communities that will be inundated by dam waters when the project is complete.

India is struggling to keep infrastructure growth at pace with its development. We will assess whether the benefits of Luhri’s 720 megawatts of power outweigh the long- and short-term risks of diverting and damming a major river. Much is contingent on the company’s successful mitigation efforts and adherence to environmental commitments.

2013 update: The Luhri project was put on hold in 2012 pending environmental approvals. A forestry permit was issued in January 2013, suggesting that the project would move forward, but new requirements limiting the amount of water to be run through head-race tunnels (a minimum of 25% of the river’s capacity) will decrease the power generation of the project. Whether this alters project designs has not been clarified. Check back for updates!

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