The station uses water from the jhoras (Nepalese for 'streams') Kotwali, Hospital and Barbatia, channeled through a network of flumes to reservoirs, then passed down 220-metre (720 ft) penstocks to the generators.
The road to the tea factory building is well laid and accessible by vehicles, covering a distance of 6 km (3.7 mi) from Darjeeling.
On 11 February 1896, the Municipal Commissioners of Darjeeling decided to set up a hydroelectric power station for the purpose of lighting the town.
A loan of ₹1 lakh (₹100,000) was secured from the government, and a site for the power station was selected at the foot of the Arya Tea Estate at Sidrapong.
There being no proper road communication, all equipment, machinery and materials had to be transported manually—a Herculean task, inconceivable in the present day.
India's first hydroelectric power station with 2 × 65 kW capacity was commissioned on 10 November 1897 by Sir C. C. Stevens, the Acting Lieutenant Governor of Bengal.
However, the limited supply of water meant that power generation could not be increased to match the growing demand of the town and of the factories at the neighbouring tea gardens.
In the meantime, the demand for power grew rapidly, while the old single-phase system of supply had become out-dated as it suffered from transmission losses.
This water is channeled through flumes constructed from black metal sheets of 1.3 mm (0.051 in, 16 gauge) thickness with masonry duct and concrete lining.
Water from the flumes is gathered at the forebay reservoir, then fed into a penstock (a long vertical pipe) which delivers it to the gates of the turbines.
The water runs from the pentrough down to the gates of the turbines through steel pipes 220 metres (720 ft) long and 380 mm (15 in) inside diameter.
There are provisions for running all the machines from both the reservoirs separately in case of necessity by providing interconnection in the pipes along with necessary valves and gates.
During the Gorkhaland political agitation, the local residents struggled to preserve the station from rival groups seeking to demolish it.
In a special ceremony, the station was accorded cultural heritage status by the central government, with a pledge to revive the power plant.
However, efforts at repairing the plant and restarting operations languished for 6 years owing to persistent technical problems and lack of attention from state authorities.
The residents of the towns of Sidrapong, Risheehat, Arya and Bloomfield formed a committee on 1 December 2003 to revive and resuscitate the historic and monumental hydel project.