Electricity is an essential source of commercial energy. It is vital for sustained economic growth. An increase in demand for power implies growth of the economy leading to modernization, industrialization and improvement in basic amenities culminating into a better quality of life of people. The state of Jammu and Kashmir is endowed with significant hydel potential which, when exploited fully, will provide a strong impetus for the growth of its economy. Development of this potential would need huge resources, technical expertise, administrative reforms, congenial environment, proper regulation and management, besides competitive marketing, policy formation and private participation. Optimal exploitation of available hydel resources in the State would not only meet the internal demand but will also supply power to the Northern grid to boost the overall development of the State. The estimated hydro power potential of the state is 20,000 Megawatts (MW), of which about 16475 MW have been identified. This comprises 11283 MW in Chenab basin, 3084 MW in Jhelum basin 500 MW in Ravi Basin & 1608 MW in Indus basin. Out of the identified potential, only 3263.46 MW i.e. 19.80 % (of identified potential) has been exploited so far, consisting of 1211.96 MW in State Sector from 21 power projects, 2009 MW in Central Sector from 7 projects and 42.5 MW in private sector from 4 projects

Power Development in Jammu and Kashmir has a long and distinguished history. 9MW Mohra Hydro-electric Plant, among the first of its kind in the subcontinent, was developed as early as 1905. The estimated hydel potential is about 20,000 MW, out of which projects of about 16,200 MW capacity have already been identified. These projects are techno-economically viable, besides being eco-friendly and socially beneficial. In order to harness this potential in a sustained manner, the Government of J&K established the Jammu & Kashmir State Power Development Corporation Limited (JKSPDCL) which has been incorporated as Private limited company on 16th February 1995. The Corporation was incorporated to takeover, execute, complete, operate and maintain all power stations and power projects of the State. The assets of all the power projects in the State, both existing and under implementation were transferred to the Corporation. The Corporation presently has 20 hydroelectric projects with installed capacity of 758.70MW located in various districts of Jammu & Kashmir including 450MW BHEP. The Corporation has Gas Turbines based on HSD with installed capacity of 175 MW at Pampore near Srinagar. In accordance with the State Hydel Policy, 2003 JKSPDC has allotted 10 small HEPs with a total capacity of 110.50 MWs under IPP phase-I.