Govt guidelines clarify aspect of developing pumped storage projects
POWER & RENEWABLE ENERGY

Govt guidelines clarify aspect of developing pumped storage projects

The Ministry of Power has issued guidelines to govern and promote the development of pumped storage projects (PSP) throughout the country. These guidelines clarify the methods for project site allocation through competitive bidding and rule out any upfront premium for project allocation in order to make it financially viable.

Tax breaks and participation in power markets are also planned by the ministry to make these projects financially viable and appealing to developers and investors alike.

Various factors related to the energy transition are expected to drive the development of PSPs in India. PSPs are critical for increasing the use of variable renewable energy sources in the energy mix, providing critical backup during periods of high demand, and ensuring grid stability.

According to the Central Electricity Authority (CEA), India will need 26.7 GW of PSP and 47.2 GW of battery energy storage systems by 2032 to integrate renewable energy capacity.

State governments may allocate project sites to developers in a variety of ways, including through nominations to Central Public Sector Undertakings (CPSUs) and State Public Sector Undertakings (SPSUs). According to the guidelines, governments may also use competitive bidding, tariff-based competitive bidding, or self-identified off-stream pumped storage projects.

Furthermore, developers must begin construction work within two years of the project's allotment date, or the project site will be cancelled by the concerned state. However, a relaxation of one year may be granted to those projects where the delay in the start of construction is attributable to pending environment clearance and forest clearance.

States must ensure that no upfront premium is charged for project allocation in order to ensure the viability of PSPs. The appropriate regulator must ensure that grid-supporting services such as spinning reserves, reactive support, black start, peaking supply, tertiary and ramping support, faster start-up, and shutdown are appropriately monetized.

To provide appropriate pricing signals to peak and base load-generating plants, the regulator must notify peak and off-peak tariffs for generation.

PSPs and other storage projects will be permitted to participate in all power exchange market segments, including the high-price segment of the Day Ahead Market (HP-DAM). This ensures that they can benefit from the price difference between peak and off-peak tariffs.

The ministry has determined that abandoned mines, including coal mines, in various parts of the country could be used as hydro storage, becoming natural enablers for the development of PSPs.

In consultation with other government stakeholders, it has begun efforts to identify and develop exhausted coal mines as potential PSP sites.

PSPs play an important role in India's transition to a more sustainable energy system. PSPs can offload excess energy during off-peak hours, increasing the load factor of other systems and providing additional capacity during peak hours, because wind and solar energy can be generated when energy demand is low. PSPs also provide critical backup during periods of high demand while keeping the grid stable.

Also Read
Tamil Nadu CM to introduce third master plan for Chennai by 2025
Godrej Properties shares increases by 8%

Redefine the future of urban mobility! Join us at the Metro Rail Conference 2025 to explore groundbreaking ideas and insights. 👉 Register today!

The Ministry of Power has issued guidelines to govern and promote the development of pumped storage projects (PSP) throughout the country. These guidelines clarify the methods for project site allocation through competitive bidding and rule out any upfront premium for project allocation in order to make it financially viable. Tax breaks and participation in power markets are also planned by the ministry to make these projects financially viable and appealing to developers and investors alike. Various factors related to the energy transition are expected to drive the development of PSPs in India. PSPs are critical for increasing the use of variable renewable energy sources in the energy mix, providing critical backup during periods of high demand, and ensuring grid stability. According to the Central Electricity Authority (CEA), India will need 26.7 GW of PSP and 47.2 GW of battery energy storage systems by 2032 to integrate renewable energy capacity. State governments may allocate project sites to developers in a variety of ways, including through nominations to Central Public Sector Undertakings (CPSUs) and State Public Sector Undertakings (SPSUs). According to the guidelines, governments may also use competitive bidding, tariff-based competitive bidding, or self-identified off-stream pumped storage projects. Furthermore, developers must begin construction work within two years of the project's allotment date, or the project site will be cancelled by the concerned state. However, a relaxation of one year may be granted to those projects where the delay in the start of construction is attributable to pending environment clearance and forest clearance. States must ensure that no upfront premium is charged for project allocation in order to ensure the viability of PSPs. The appropriate regulator must ensure that grid-supporting services such as spinning reserves, reactive support, black start, peaking supply, tertiary and ramping support, faster start-up, and shutdown are appropriately monetized. To provide appropriate pricing signals to peak and base load-generating plants, the regulator must notify peak and off-peak tariffs for generation. PSPs and other storage projects will be permitted to participate in all power exchange market segments, including the high-price segment of the Day Ahead Market (HP-DAM). This ensures that they can benefit from the price difference between peak and off-peak tariffs. The ministry has determined that abandoned mines, including coal mines, in various parts of the country could be used as hydro storage, becoming natural enablers for the development of PSPs. In consultation with other government stakeholders, it has begun efforts to identify and develop exhausted coal mines as potential PSP sites. PSPs play an important role in India's transition to a more sustainable energy system. PSPs can offload excess energy during off-peak hours, increasing the load factor of other systems and providing additional capacity during peak hours, because wind and solar energy can be generated when energy demand is low. PSPs also provide critical backup during periods of high demand while keeping the grid stable. Also Read Tamil Nadu CM to introduce third master plan for Chennai by 2025 Godrej Properties shares increases by 8%

Next Story
Real Estate

Colliers India Transacts 207,000 sq ft office space at Embassy TechVillage

Embassy Office Parks REIT, India’s first listed REIT and the largest office REIT in Asia by area, announced that it has signed an Agreement to Lease (‘ATL’) with global cyber security company Rubrik at Embassy TechVillage in Bengaluru.Colliers, a leading global diversified professional services company, specialising in commercial real estate services, engineering consultancy and investment management facilitated the transaction for Rubrik.Located on Bengaluru’s Outer Ring Road, Embassy TechVillage is one of Embassy REIT’s flagship office parks which offers world-class office spaces, ..

Next Story
Infrastructure Urban

Ensemble Infrastructure India Appoints Suman Saha as Director of Design

Ensemble Infrastructure India Ltd, a leading workplace design and build fit-out company, has appointed Suman Saha as its new Director of Design. With 25 years of experience in the industry, Suman is recognized for his innovative approach and excellence in design leadership.Working closely with the CEO, Suman’s appointment will enhance the company’s design communication across multiple touchpoints, ensuring smooth collaboration between clients, designers, and execution teams for superior project outcomes. Under his guidance, Ensemble will focus on creating workspaces and design labs that em..

Next Story
Products

Ribbon Vanity by Küche7: Fluid Design Meets Everyday Elegance

Küche7, pioneers in luxury stainless steel kitchens, have unveiled the Ribbon Vanity, a graceful creation that transforms bathroom spaces with its soft, flowing design and understated sophistication. Inspired by the fluid form of a ribbon, this vanity combines smooth finishes, clean lines, and gentle curves, offering a timeless aesthetic that seamlessly complements diverse interior styles.Available in a refined blush pink hue, the Ribbon Vanity effortlessly merges functionality with elegance. With thoughtfully designed storage options, it ensures that bathroom essentials are neatly organised ..

Hi There!

"Now get regular updates from CW Magazine on WhatsApp!

Join the CW WhatsApp channel for the latest news, industry events, expert insights, and project updates from the construction and infrastructure industry.

Click the link below to join"

+91 81086 03000