Power Ministry Pushes Pumped Storage Expansion at Pinnapuram Consultative Meet

Members of the Consultative Committee commended the Ministry for its comprehensive policy interventions aimed at accelerating PSP rollout.

The Ministry of Power convened a meeting of the Consultative Committee of Members of Parliament at Pinnapuram in Kurnool district, Andhra Pradesh, to deliberate on the growing national importance of Pumped Storage Projects (PSPs). Chaired by Shri Manohar Lal, Union Minister of Power, the high-level meeting brought together Shri Shripad Yesso Naik, Minister of State for Power, Members of Parliament from both Houses, and senior officials from the Ministry of Power, Central Electricity Authority (CEA) and Central Public Sector Undertakings (CPSUs).

This strategic discussion comes at a crucial moment, as India intensifies its push to integrate renewable energy, strengthen grid flexibility, and build large-scale storage capacity to maintain round-the-clock power supply.

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PSPs: The Backbone of India’s Green Energy Transition

In his address, Shri Manohar Lal underscored the critical role of Pumped Storage Projects in storing surplus electricity from renewables—particularly solar and wind—and meeting peak demand during non-solar hours. With India rapidly expanding its renewable energy footprint, PSPs are emerging as essential assets that provide stability, flexibility, and reliability to the national grid.

The Minister also highlighted evaporation loss as a major concern in PSP reservoirs, especially in arid regions. To counter this, he proposed integrating floating solar installations over PSP reservoirs, a solution that not only conserves water but also generates additional clean energy.

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States Hold the Key to PSP Acceleration

Reiterating the need for strong Centre–State coordination, the Minister urged MPs to encourage States to:

• Allocate suitable sites and water resources promptly

• Fast-track environmental and administrative clearances

• Withdraw charges such as Green Energy Cess, water tax, and reservoir lease fees

He emphasized that such steps would significantly improve project feasibility and attract more developers into the PSP ecosystem.

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India’s Massive PSP Potential: Status and Pipeline

Officials briefed the Committee that India has identified a nationwide PSP potential of nearly 224 GW. The current status includes:

• 10 PSPs commissioned – 7 GW

• 10 PSPs under construction – ~12 GW

• 56 PSPs at planning and development stages – ~78 GW

This robust pipeline signals India’s commitment to energy storage, a key requirement for achieving high renewable energy penetration and ensuring uninterrupted power availability across sectors.

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Policy Push to Accelerate Project Development

Members were informed about major policy reforms undertaken to unlock the PSP sector’s full potential. These include:

🔹 New Guidelines for PSP Development

• Clear modalities for site allotment

• Exemption from free power obligations

• Exemption from Local Area Development Fund (LADF) contributions

🔹 Inter-State Transmission (ISTS) Charge Waiver

A complete waiver for 25 years for projects awarded on or before 30 June 2028, lowering project costs and improving financial viability.

🔹 Budgetary Support for Enabling Infrastructure

Government-backed financing for roads, transmission lines, and supporting facilities needed for PSP deployment.

🔹 Renewable Consumption Obligation (RCO) for Energy Storage

Mandating storage-backed renewable energy consumption underpins demand and developer confidence.

🔹 Tariff-Based Competitive Bidding (TBCB) Guidelines

New procedures introduced for procuring storage capacity or stored energy from PSPs through competitive, transparent bids.

🔹 Procedural Ease for Off-Stream Closed-Loop PSPs

• Full exemption from CEA concurrence

• Faster clearances and smoother project initiation

🔹 Revised Capital Threshold for CEA Concurrence

The limit has been increased to ₹3,000 crore, easing procedural requirements for competitively bid and MoU-route hydro and PSP projects.

These combined measures have created a more predictable, developer-friendly policy environment and catalysed confidence across States and private investors.

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Committee Members Applaud Policy Momentum

Members of the Consultative Committee commended the Ministry for its comprehensive policy interventions aimed at accelerating PSP rollout. They highlighted that:

• Eased technical appraisal requirements

• Budgetary support for key infrastructure

• Waiver of ISTS charges

…have collectively strengthened trust among developers and State governments, leading to faster project adoption.

The Committee also reflected on the environmental advantages of PSPs, noting that these projects—when responsibly executed—offer significantly lower ecological impact compared to conventional thermal plants or other renewable infrastructure.

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Pinnapuram PSP Milestone: A National Achievement

Addressing the Committee, Shri Shripad Yesso Naik, Minister of State for Power, celebrated the upcoming commissioning of:

• All 8 units of the 1,680 MW Pinnapuram PSP

• The 500 MW Tehri PSP

He noted that these achievements reflect exceptional coordination between the Centre, States, CPSUs, and private partners—demonstrating the strength of India’s collaborative approach to infrastructure development.

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Charting the Path Forward

The meeting concluded with constructive suggestions from Members of Parliament on how to further accelerate PSP adoption, streamline regulatory processes, minimize environmental impact, and strengthen India’s long-term energy security.

As India moves rapidly towards a clean energy future with ambitious renewable energy targets, Pumped Storage Projects will remain central to ensuring stability, flexibility, and sustainability in the nation’s power system.