Himachal Pradesh, located in the northern part of India, has over 23,000 MW (15% of the nation’s total) of harnessable hydropower potential across five perennial river basins. Hydropower accounts for 71% of the state’s 4,335 MW capacity. The state experiences a power surplus during the summer and a deficit in the winter. To manage this variability, the state bears the financial burden of banking excess power during the summer and purchasing electricity from central generating stations during winter deficits.

Himachal Pradesh has set its target of transforming into a Green State by 2026. For 2021-22, the energy requirement at the state periphery is estimated to be 10,600 MU with a T&D loss target of 9.9 %. The average power purchase cost is estimated to be Rs. 2.5 per unit.

In response to this, the Global Green Growth Institute (GGGI) and the World Bank partnered to develop and deliver the (1) Integrated Resource Planning (IRP) framework, including digitization and visualization tools for the power utilities (2) setting up of a trading desk, and (3) capacity building and institutional strengthening of relevant stakeholders. This contributed to raising the preparedness of the state power sector utilities for receiving the proposed International Bank for Reconstruction and Development (IBRD) loan.

Himachal Pradesh, despite its vast hydropower potential, faces challenges such as surplus power in summer and deficits in winter, resulting in a financial burden on the state. Additionally, limited capacity development in power sector institutions and large-scale integration of variable renewable energy (VRE) with the grid pose significant challenges in meeting renewable energy targets. The suboptimal utilization of resources due to fragmented planning and weak transmission & distribution (T&D) infrastructure further hinders the state’s ability to meet internal power demand and effectively utilize flexible hydropower for grid balancing.

The project aimed to develop an Integrated Resource Planning and digitization plan for the electricity grid network, which would allow state power utilities to develop and deploy Himachal Pradesh’s renewable energy resources (including hydropower) sustainably.