The unprecedented rains and flash floods in the Azad Jammu and Kashmir have devastated its economy that has not yet been fully recovered from the 2005 earthquake. Indeed, rehabilitation/rebuilding programmes need to be launched in the region expeditiously.

Energy security is an important element for undertaking rehabilitation work and ensuring recovery process. The state is short of electricity. Against the present demand of about 1,575 GWh, only 121 GWh electricity is generated while AJK, rich in water resources, has tremendous potential for hydropower generation, estimated to be 7,170 MW.

However, hardly 15 per cent of potential is utilised, which includes Mangla power station of 1,000 MW installed capacity. Thus there is a need to optimise the exploitation and use of hydropower that is proven renewable, economical and clean resource of energy.

Seven small and mini hydropower stations are in operation in the AJK, with cumulative installed capacity of 37.6 MW. These include Jagran power station of 30.4 MW, Kathai of 3.2 MW, Kundal Shahi of 2 MW, Leepa of 1.6 MW, Kel of 0.4 MW and Changan and Patikka, each of 0.05 MW capacity.

It is projected that by the year 2015, the demand for electricity would increase to about 700 MW and by 2020 to 1,000 MW. To meet the growing demand, the AJK government has developed another 10 small hydropower projects of total capacity of 21 MW. Five projects of about eight MW are in advanced stages of completion, scheduled to achieve commercial operations by end of this year. These include Sharian hydropower project (3.2 MW), Sharda (3 MW), Hillan (0.6 MW), Rangar-I (0.6 MW) and Halmat (0.32 MW).

These projects however may now be delayed due to heavy rains and floods. Another five projects of more than 13 MW capacity are scheduled to come on line during February-June 2011, which include Battar (4.8 MW), Rehra (3.2 MW), Qadirabad (3 MW), Dhannan (1.7 MW) and Rangar-II (0.45 MW). The progress on related civil works however is slow due to non-release of funds last year.

A large number of potential sites in the catchments of River Jhelum, River Poonch and River Neelum have been identified, and technical and economic parameters defined, with the help of national and international consultants. These sites, with an estimated potential of over 5,600 MW, with high, medium and low water heads, could economically develop hydropower projects, mainly run-of-the-river type.

Accordingly, the AJK Hydro Electric Board has undertaken preparation of project feasibility studies of Luat (63 MW), Shounter (52 MW), Dowarian (46 MW), Nagdar (39 MW), Hariyala Zaminabad (21 MW), Janawahi (12 MW), Taobut (10 MW) and Changan (9 MW). These studies are to be completed during September-November 2010.

In addition, consultants have been engaged for preparing engineering design and tender documents related to Jagran-II of 43.5 MW and Jhing-I of 14.4 MW capacity. Also, project approval is being obtained from the government for developing other two projects, namely Chamm Fall (6.4 MW) and Hajira (2.5 MW).

Hydropower projects of up to 50 MW capacity are being developed by the AJK government, as per Power Policy 2002, in public and private sector. The first power project in private sector, Khari of one megawatt, is in operation in Jari-Kass, Mirpur since September 2003. It is a captive power plant.

Practically, there has been negligible headway on developing other projects in private sector. However, recent efforts to attract private investment have been successful, and the AJK Private Power Cell has issued letter of interest (LoI) to develop 11 projects of total over 89 MW capacity.

Significant progress has been achieved on these projects. Tariff negotiations by the sponsors with power purchaser are in advanced stage for Madar Batdara (10.2 MW), Hotreri (5.4 MW), Riali-II (4.9 MW), Dakhari (2.2 MW), and Riali-I (1.6 MW). Techno-economic feasibility studies have been completed for Sankaya of seven MW capacity for which letter of support (LoS) is under issue, and Dachhor Miran (three MW). Feasibility reports are under preparation by the investors for Arja Taien Dhalkot (36 MW), Jagran-III (15 MW), Bheri (2 MW) and Ghail (0.8 MW).

Relatively, energy potential in major districts that are well-developed, should be of great interest to prospective private investors. This includes 2,468 MW potential in Muzaffarabad district, 1,369 MW in Mirpur district, 645 MW in Kotli district, 541 MW in Neelum district, 339 MW in Bagh and 231 MW in Poonch.

The projects are categorized as mega, medium, small and mini hydropower, which could be connected to isolated grid station or integrated with Wapda's high voltage grid network. Construction cost and cost of electricity transmission and dispatch is lower in the AJK, resulting in lower tariff.

Neelum-Jhelum project of 969 MW is being developed by the WAPDA. Projects of above 50 MW capacity are being developed in private sector through the Private Power and Infrastructure Board (PPIB). Construction on New Bong Escape project (84 MW) in Mirpur District has commenced, which is the first hydropower independent power producer (IPP). Patrind (147 MW) in Muzaffarabad is about to achieve financial close. Tariff for Gulpur (100 MW) and Kotli (100 MW) projects is being determined by the Nepra, whereas EPC contractors are being appointed for Rajdhani (132 MW).

These projects are expected to achieve commercial operations in 2014. Karote (Kotli) project of 720 MW capacity is in advanced stage of processing. Feasibility study of Sehra (130 MW) in Poonch has been approved and tariff is under negotiations. LOIs have been issued to sponsors of Kohala (1,100 MW) in Muzaffarabad district and Chakoti-Hattian (139 MW) near Jhelum. Expression of Interest (EOI) for 590 MW capacity Mahal hydropower project in Bagh district is under process.