An environmental disaster occurred with the Idukki hydroelectric project in the Western Ghats of the Indian Peninsula at an altitude of 695 metres above sea level. The reservoir is formed by three dams, an arch dam across the Periyar River, a concrete dam across the Cheruthony River and a masonry dam at Kulamavu, upstream of Idukki. The reservoir covers nearly 60 sq km and has a catchment of 649 square km. Water from the reservoir is channelled down to the underground power house at Moolamattom through an underground tunnel, yielding an average gross head of 2,182 feet (665 metres). The project has an installed capacity of 780 MW with firm power potential of 230 MW at 100% load factor.
The project involved diversion of the waters of the upper part of the Periyar River into the Muvattupuzha River. This caused severe drought in areas down stream of the river in summer and reduced fresh water availability for industries located near the mouth of the river. The fresh water regime of Periyar River was in dynamic equilibrium with the estuarine tidal cycle. The impoundment of the dam and diversion of water upset this equilibrium and this led to saline water intrusion into areas where fresh water was available previously.
After impoundment of the dam, hundreds of tremors had been recorded in the Idukki area and most of them are classified as reservoir induced. So far, these tremors have not caused any serious damage. Valley slumpings and slope failures became more common in the area following construction of the dam. A major reason for this was the destruction of the forests during and after the construction. The project opened up the inner forests of Idukki district. This accelerated migration to the area, with the work force of around 6,000 itself acting as the nucleus.
The project submerged about 6,475 hectares of evergreen and deciduous tropical forests and the construction of roads, felling of trees and other encroachments led to loss of about 2,700 hectares of forest and hastened degradation of the remaining forests. Much of the degradation of forests that has happened over the years is irreversible. Owing to loss of habitat, some reptilian species like the rare terrapin have become extinct or sparse.