Revision of Limit of Capital Expenditure of Hydro Generating Stations for Concurrence by CEA

Posted On - 16 September, 2025 • By - King Stubb & Kasiva

Introduction

On August 1, 2025, the Ministry of Power redefined the tier of hydro generating projects that require mandatory concurrence. The new revision replaces the Central Electricity Authority (CEA) Notice of April 2006. The aim is to cut the red tape that has stymied the growth of hydro projects, while at the same time conforming to present day accepted practices of safety.

Explanation

Under the new notification:

  1. Revised Threshold for Concurrence
    • Any hydro generating station project with an estimated capital expenditure exceeding ₹3,000 crore must now obtain the prior concurrence of the CEA.
    • This marks a revision from the earlier notification of 2006, thereby updating the regulatory framework to reflect current economic and infrastructural realities.
  2. Exemption for Pumped Storage Projects
    • Off-stream closed-loop pumped storage schemes are exempted from the requirement of CEA concurrence, regardless of their capital expenditure.
    • However, developers of such exempted schemes may still approach the CEA for technical guidance on a voluntary basis.
  3. Compliance with Dam Safety Laws
    • All developers of hydro generating stations are mandated to comply with the provisions of the National Dam Safety Act, 2021, ensuring that infrastructure safety remains a top priority.

This notification reflects the government’s balancing act: facilitating quicker approvals for certain renewable projects while maintaining oversight on high-investment ventures.

Conclusion

The notification as revised is an important step in regulation for the power sector. Investment in hydropower is being incentivized by increasing the capital expenditure threshold and removing the blanket exclusion for certain pumped storage schemes. Investment and innovation in renewable energy infrastructure is especially being focused on. The same time, safety and sustainability is being emphasized by the National Dam Safety Act, 2021, the provisions of which are to be mandatorily followed.

Developers are expected to benefit the most. Remove of the procedural road blocks for the construction of the projects, the focus on the clean energy and the hydropower development, all combines with the energy transition goals of the country.