The earliest recorded proposal of storage on the river Ravi was mooted in 1912 for a 200 ft . high Dam near village Thein. It was inspected by committee headed by Mr. Willey in 1926-27 who had recommended to carry out the survey of the area, but up till 1954 nothing substantial was done except inspections by Geologists. It was in 1957 that the proposal of storage Dam on Ravi River materialized into an Irrigation scheme. The power generation aspect was then postponed to a future date. The first multipurpose project report was submitted to Government of India in 1964. Finally the project was accorded approval by Government of India in April 1982.
Ranjit Sagar Dam (Thein Dam) Project is one of the largest multipurpose river valley project on the river Ravi about 24 KMs up-stream of Madhopur Head Works. It houses four generating units of 150 MW each with total installed capacity of 600 MW. It has firm power of 162 MW at 100% load factor. 4.6% of energy generated is supplied free of cost to H.P. and 20% of energy generated is to be supplied to J&K at the generated cost at the Bus Bar. The Project has been conceived as a peaking station. The power generated is being fed into the existing 220 KV Grid substation at Sarna.
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