As India accelerates its transition to renewable energy, pumped storage projects (PSPs) have emerged as a reliable solution to address intermittency challenges and ensure grid stability. At Renewable Watch’s recent conference on “Pumped Hydro Storage in India”, senior industry representatives discussed their plans in the PSP space, challenges faced and outlook for the segment. Edited excerpts…
Parveen Nanda, Executive Vice President, Greenko Group
At Greenko, we are currently working on several PSPs. The Pinnapuram PSP will be commissioned in a few months. We have completed boxing up the units and started dry commissioning processes, with wet commissioning to follow soon. Another project, with 1,920 MW of capacity in Gandhi Sagar, Madhya Pradesh, is under construction, and slated for commissioning by the end of next year.
We have a pipeline of 20 GW of projects planned for commissioning by 2029. Three of these, totalling almost 6 GW, will start before March 2025, with the remaining projects beginning before March 2026. We aim to commission all these projects by 2029, allowing 36 months for the construction period.
We prefer off-stream PSPs over on-stream ones. Our studies have shown that operation is more streamlined and uniform in completely off-stream projects.
From an offtaker perspective, there are various potential customers: utilities (which are now issuing tenders in almost every state), and commercial and industrial customers with specific requirements. I do not think there will be a shortfall of customers going forward. The pace at which tenders are coming up is impressive; however, there is a need for an enabling policy framework in this space. On the policy front, there is significant progress in expediting PSPs, with many policy developments. However, this is happening at a macro level. We now need micro-level evaluation of these guidelines and attention to smaller details to implement the broader guidelines effectively.
Another significant issue is flexibility in pumping mode. For the Pinnapuram project, we initially considered variable speed machines but after extensive study, we opted for two sizes of machines – two smaller sizes and one larger size. With hydraulic short-circuiting operation, we have achieved considerable system flexibility. I believe the main challenge now is bringing projects to the groundbreaking level. Overall, there is a gap between policy initiatives and ground-level implementation, which needs to be addressed.
Jayaraman Punidhan, Chief- Hydro, Tata Power
We currently have a PSP portfolio of about 26 GW. This includes MoUs with various state governments: 4.4 GW in Andhra Pradesh, 9.9 GW in Maharashtra, 5.4 GW in Tamil Nadu and 5.1 GW in Telangana. Recently, we have added the 1.5 GW Panora PSP in Uttar Pradesh to our portfolio. Our target portfolio for PSPs is 30 GW by 2030. For hydro and international projects, we are aiming for a portfolio of about 10 GW. Overall, we are looking at a total portfolio of 40 GW by 2030. Most of these PSPs will be standalone. For us, the low-hanging fruits are off-river PSP systems although most of the PSPs that have been acquired by PSUs are on-river projects.
The cost of PSPs is project-specific, but it also depends on how well the project is optimised. For instance, we are very selective about sites, choosing only those that make commercial sense, are environmentally friendly and can be developed as quickly as possible. Interest during construction is an important aspect of the cost. Regarding location, most of our sites are in southern or peninsular India, where the geology is much more favourable. This mitigates many challenges. In terms of site selection, we look for a natural topography with clear bowl-shaped reservoirs to minimise excavation. We are avoiding the Himalayas due to their unique challenges. Thus, we have chosen to stay away from hilly areas, despite opportunities there.
Offtake is crucial because it gives financial security. We are exploring various offtake strategies. We will not put all our eggs in the same basket, and will choose the most commercially attractive option. We are talking to some big players for offtake from our projects to meet their specific needs.
A positive regulatory environment is needed in this space. For instance, I think hydro projects should be distinguished from PSPs because PSPs are net consumers of energy. While the construction and structures are similar, PSPs are fundamentally different in their energy profile. A key advantage for PSPs is their ability to provide long-duration energy storage, offering storage for more than six hours, which currently cannot be replaced by other technologies. Battery energy storage systems (BESS), for instance, are primarily for short-duration storage. However, both PSPs and BESSs can complement each other going forward.
A key challenge in the sector is that the number of hydro-specific contractors has been declining, although many infrastructure-based contractors are available. In addition, while many states are developing their own policies, these policies often lack alignment with central government directives. We also rely heavily on support from district administrations for water and land allotment. Despite the challenges, the policy and regulatory framework in India is quite advanced. Many countries do not have such comprehensive policy frameworks or enabling environments. I believe we are in a much better position compared to other countries in this regard.
Manisha Srivastava, General Manager, N
In the hydropower space, we have a portfolio of 7 GW, with plans to add another 3 GW this year. We are already in discussions with many states and have signed MoUs with the Gujarat, Odisha and Maharashtra governments. We have a joint venture with the Madhya Pradesh government as well. We have submitted preliminary feasibility reports for four PSPs, of which one PSP of 1,800 MW is at the DPR stage. In total, we are working on 10-11 GW of PSPs, which are at various stages of development. All the projects are standalone off-river ones. Off-river PSPs are certainly better than on-river ones because completion time is less.
Site allotment is a big challenge. For this task, all government agencies and ministries should be in harmony. Sometimes, it seems that the guidelines or intentions of central governments are not aligned with those of the states. The availability of electrical and mechanical equipment at the bidding stage is challenging due to the limited number of suppliers. Additionally, PSP contracts should be flexible as the sector is still at a nascent stage. Going forward, coordination and collaboration among all parties will be essential.
S.N. Tripathi, Executive Director (Project Management) and RED (Hydro), NTPC
Regarding our project portfolio, we have already identified 11.9 GW of PSPs and are working on them, with another 5-6 GW at the planning stage. Recently, we have been allocated a 1,000 MW PSP project in Upper Bhavani near Ooty, Tamil Nadu, for which we will prepare a DPR.
We are actively engaging with the Maharashtra government to build a strong portfolio in the state and are also pursuing the Wilson Ghat project in Gujarat. Our target is to have 17-18 GW of PSPs in our portfolio by 2031-32. Most of our projects are standalone, and while we prefer off-river projects, as a public sector entity, we sometimes have limited options due to government obligations. Globally, off-river PSPs are expected to grow significantly, with a 10 per cent CAGR. The overall PSP market is projected to triple in the next decade. India needs storage solutions, but we have limited suitable sites. At NTPC, we have ambitious renewable energy plans and we intend to meet the round-the-clock needs through PSPs. The long-term viability of pump storage will be determined after 2037, with market forces deciding the demand for such projects. As alternative storage solutions emerge, we need to carefully consider how aggressively to pursue PSPs. The time has come for developers, manufacturers, contractors and government policymakers to think in harmony.
