Kerala Small Hydro Development Policy- 2012 Points that is not given due consideration in the Draft from

the point of a developer. Hydrological risk-There is practically no such data on flows in the smaller rivers and streams, where typically a Small Hydro Plant might be put up. Hence the policy should offer the developer incentives to mitigate the risks In order for project participants to be eligible to claim title to CERs, they must also be able to claim title to the rights and benefits from the underlying Greenhouse Gas emission reductions. As it is a relatively new concept that it is possible to create a valuable commodity (CERs) from reducing Greenhouse Gases, little consideration has been given to who will be legally entitled to any benefits from Greenhouse Gas reductions (and therefore entitled to CERs). A CDM Project is implemented through a network of legal arrangements between project participants, investors, banks, contractors and purchasers of the ultimate products from the project (including CERs). In structuring a CDM Project it is fundamental that all legal responsibilities and risks are properly allocated among the project documents to the party relatively better able to bear those risks. The greater the number of parties involved in a CDM Project, the greater the number of risks that will need to be allocated. Types of small hydro developments Run-of-river developments Water storage (reservoir) developments (The incentives should be different) Role of ANERT in getting MNRE Subsidy. The ability of the project developer to contain capital costs as a big hurdle. The hilly regions, logistics and evacuation lines (the cost of which the developer is made to bear as per the draft policy) add to cost. In States like Kerala, because the head is not sufficient, large civil constructions are required to generate even small quantities of power. The input costs vary wildly, and more often than not, hence there should be mechanism to ensure reasonable rate of return for the capital invested other than the power purchase agreement accorded by regulatory commission.