At the 4th edition of the “Pumped Hydro Storage in India” conference organised by Renewable Watch, Raj Kumar Chaudhary, Chairperson, Joint Electricity Regulatory Commission, Jammu and Kashmir and Ladakh, spoke about the evolving regulatory landscape for pumped storage projects (PSPs), persistent approval and land-related challenges, and policy reforms needed to accelerate project development while ensuring environmental safeguards. Edited excerpts…
Regulatory approvals streamlined, but key bottlenecks remain
Multilayered approvals are required from multiple agencies, including the Central Electricity Authority (CEA), the Central Water Commission and the Geological Survey of India. While approvals for off-the-river projects have been simplified, developers still face significant bottlenecks in land acquisition and forest clearances. Furthermore, the standardisation of the pre-feasibility report format has simplified the initial stages of project development and reduced delays.
Once the pre-feasibility report is approved, the next key milestone is the approval of the detailed project report. For projects with an investment exceeding Rs 30 billion, concurrence from the CEA is mandatory, with the approval timeline now reduced to 50 days. Although projects below this threshold do not require CEA concurrence, developers often seek it voluntarily, as the CEA’s endorsement helps improve the project’s credibility and facilitates funding from financial institutions.
Additionally, environmental clearance from the Ministry of Environment, Forest and Climate Change (MoEFCC) or the State Environment Impact Assessment Authority remains a key requirement, although the terms of reference for standalone PSPs have now been simplified.
Projects involving forest land must also obtain forest clearance under the Forest (Conservation) Act, 1980 while wildlife clearance from the National Board for Wildlife is required if any project component falls within 10 km of a protected area.
Current bottlenecks in PSP development
Despite improvements in the regulatory framework and growing private sector participation in pumped storage development, several challenges continue to delay project execution. The Hydro Policy 2008 encouraged private investment, but the expected pace of development did not materialise. In recent years, however, private developers have entered the sector in a significant way, which is a positive development for the hydropower industry.
Forest land diversion and compensatory afforestation remain among the biggest hurdles as securing the required clearances is a lengthy process. Projects located in ecologically sensitive areas often face opposition from local communities, resulting in delays at various legal and environmental approval stages.
Another major challenge is the lack of coordination among different government agencies. Since several approvals are handled by state authorities while others require central government clearance, developers frequently have to move between multiple agencies. In many cases, changes sought by one authority require applications to be resubmitted to another, creating repeated rounds of revisions and extending project timelines.
Policy reforms aim to accelerate PSP clearances
The CEA is actively working to recognise PSPs as a distinct, low-impact category, separate from conventional hydropower projects, which has helped expedite project approvals. Furthermore, the government’s decision to allot PSPs to central and state PSUs on a nomination basis has accelerated project development by reducing procedural delays in project
allocation.
The PARIVESH 2.0 portal will play a key role in digitising and streamlining the environmental clearance process. With project documents, including the terms of reference, now being processed through the portal, the MoEFCC has been able to accelerate approvals compared to earlier years. However, further improvements are still needed to expedite clearances for PSPs without compromising environmental safeguards or community engagement.
Some of the strategies to streamline the PSP development process are expanding the PARIVESH portal into a comprehensive single-window clearance platform by integrating approvals from multiple agencies, thereby reducing repetitive submissions and improving coordination among regulatory bodies. Another recommendation is to adopt a tiered and standardised approval framework, under which low-impact, off-river PSPs can be fast-tracked while maintaining rigorous environmental impact assessments for projects located in ecologically sensitive areas.
Proactive community engagement is necessary, encouraging developers to involve local communities from the project planning stage instead of relying solely on mandatory public hearings at later stages. Leveraging digital platforms for remote participation can further improve accessibility, particularly in rural areas. In addition, strengthening monitoring and transparency through the use of IoT sensors, satellite data and publicly accessible digital dashboards can enable real-time tracking of construction activities and compliance with environmental management plans.
Finally, establishing a dedicated specialised cell within the MoEFCC is expected to guide developers through regulatory requirements, improve documentation quality and minimise delays arising from incomplete submissions.
At the same time, efforts to expedite approvals should not dilute environmental safeguards. The mandatory requirement for prior environmental clearance must be retained to prevent post-facto approvals and ensure that environmental impacts are assessed before project implementation. In addition, rigorous environmental impact assessment studies covering biodiversity, hydrology and other ecological aspects should continue to form an integral part of the approval process, ensuring that accelerated project development does not come at the cost of environmental protection.
Recommended reforms to accelerate development
Key reforms can be categorised into land acquisition, forest clearances, water-use permissions and rehabilitation and resettlement (R&R) to address persistent bottlenecks in PSP development. For land acquisition, the recommendations include digitising land records through the PM-SVAMITVA scheme and promoting land pooling instead of mandatory land acquisition for project infrastructure.
The creation of state-or national-level land banks dedicated to energy projects has also been proposed to provide pre-identified land parcels with clear titles. In addition, adopting standardised, market-linked compensation mechanisms, including rehabilitation costs in line with the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, can help minimise disputes and speed up land acquisition.
To improve forest clearance, recommendations include permitting the use of degraded forest land for compensatory afforestation for PSPs, similar to the provisions available for central PSUs. Another key proposal is to treat offstream (closed-loop) PSPs as a separate, lower-risk category, allowing them to bypass certain stringent environmental regulations applicable to on-river projects. Further, work on non-forest land portions of projects should be allowed to commence while forest clearance for the remaining area is still in process.
For wateruse permissions, the recommendations call for dedicated policies for closed-loop PSPs, recognising that water is largely reused rather than consumed in these systems. They also call for streamlined water allocation approvals, particularly for offstream reservoirs that do not interfere with natural river flows.
Finally, for R&R, adopting community-centric approaches by recognising community forest resource titles and involving gram sabhas at an early stage to secure local consent and reduce project delays is recommended. The importance of independent monitoring to ensure transparent and timely implementation of rehabilitation plans should also be highlighted as this addresses local concerns and improves compliance.
Opportunities ahead
While regulatory processes have become more efficient, sustained efforts are needed to address the remaining bottlenecks in land acquisition, forest and wateruse clearances, and inter-agency coordination. Going forward, faster approvals for PSPs must be balanced with environmental assessment and meaningful stakeholder engagement. An integrated, transparent and technology-enabled regulatory framework will be critical for PSP development.
