The risk of there not being enough water in the stream — the ‘hydrology risk’ — is the “single largest risk” that a small hydro project faces, says a study of the rating and analysis agency, ICRA.
The study went into the question of why small hydro projects — projects of less than 25 MW capacity — have not been happening on a scale consistent with the potential in India. It found out that after ‘hydrology risk’, the risk of ‘containment of capital cost’ was the second biggest stumbling block.