📌 Hydropower Potential

Himachal Pradesh is endowed with vast hydropower potential, estimated to be around 27,436 MW, which is about 25% of India’s total identified potential. As of early 2025, approximately 10,519 MW of this potential had been harnessed. Hydropower is a cornerstone of the state’s economy, serving as a major source of revenue through the sale of surplus power to other states and contributing to energy security.

Several major hydroelectric projects are operational in the state, including the Nathpa Jhakri Project (1500 MW), Bhakra Dam (1325 MW on Sutlej), Larji Hydroelectric Project (126 MW on Beas), Sanjay Vidyut Pariyojna (120 MW on Bhaba), and Sainj Hydroelectric Project (100 MW).⁵ The state government continues to prioritize hydropower development, with plans to allocate 22 new hydropower projects with a combined capacity of 828 MW. These projects are spread across various river basins, with the largest allocation (595 MW) planned for the Chenab basin.

A significant strategic shift in policy involves allotting these new projects to other states, union territories, and central/state undertakings on a 40-year lease with an upfront premium of ₹10 lakh per megawatt. This approach aims to maximize revenue, ensure timely project execution by attracting diverse investment and expertise, and reduce the state’s direct financial burden, while still securing benefits like free electricity and employment for local residents.

The government is also committed to developing hydropower resources in an environmentally and socially sustainable manner. This includes mandating Catchment Area Treatment (CAT) plans, ensuring minimum environmental flows in rivers (15% of lean season flow, a pioneering step in India), and facilitating benefit-sharing with local communities affected by projects. This emphasis on sustainability is crucial given the fragile Himalayan ecosystem and the need to maintain local support for long-term project viability.

Table 5: Major Hydropower Projects in HP & Capacity

Project Name	River Basin	Installed Capacity (MW)	Status/Key Feature	Source(s)
Nathpa Jhakri Project	Sutlej	1500	Major operational project, funded by World Bank
Bhakra Dam	Sutlej	1325	One of the highest gravity dams, provides irrigation
Larji Hydroelectric Project	Beas	126	Operational
Sanjay Vidyut Pariyojna	Bhaba (Sutlej)	120	Completely underground project with unique underground switchyard
Sainj Hydroelectric Project	Sainj (Beas)	100	Operational
New Project Allocations	Various	828 (total for 22 projects)	To be allocated to other states/UTs/PSUs on lease basis