Pumped storage plants in India: assessing policies and progress

by Upasa Borah, Chitrakshi Jain and Renuka Sane.

The transition to renewable energy faces challenges related to intermittency and variability in energy availability. Energy storage systems (ESS) play a crucial role in addressing these issues by storing excess renewable energy (RE) during periods of low demand and releasing it during peak hours. This enhances the scalability of renewable energy systems worldwide, reducing reliance on fossil fuels and supporting the integration of renewables into the grid. ESS technologies enable the conversion of electricity into other forms of energy for storage and later use. Among these, pumped storage plants (PSPs) remain one of the oldest and most widely relied upon solutions. These are adaptations of conventional hydropower plants.

India has set a target to achieve 50% cumulative installed capacity from non-fossil fuel-based energy resources and to reduce the emissions intensity of its GDP by 45% by 2030. India has also seen policy changes in ESS over the last few years. Legal recognition to ESS was granted in 2022, and new policy guidelines for PSPs were notified in 2023. The Central Electricity Authority (CEA) has estimated the storage capacity requirements, which will enable greater integration of renewable energy sources. These include 26.69 GW of pumped storage capacity and 47 GW of battery energy storage system (BESS) capacity by 2031-32. Among the two commercially viable technologies, BESS and PSPs, the latter present several advantages. Batteries are restricted by their storage capacity and their lifespan, and will have to be replaced frequently. PSPs, on the other hand, have the longest service life of 50 to 150 years and can store and generate energy on a much larger scale.

Given the importance of ESS and PSPs for India's energy transition, our recent paper titled "Pumped Storage Plants in India: Assessing Policies and Progress" presents the evolution of policy on PSPs and their performance in India.

The paper addresses the following questions:

• Where do PSPs feature in the overall storage policy?
• How many PSPs are under various stages of development? How many are eventually being completed?
• Are the policy measures encouraging the private sector to participate in the development of PSPs?
• Is the stated requirement of adding 26.69 GW of PSPs storage capacity by 2032 likely to be completed in the current context?
• What lessons from our experience of executing hydropower projects are relevant for the development of PSPs?

To study these questions, it builds a dataset of PSP projects from the information published by the Central Electricity Authority (CEA) and the CapEx dataset maintained by the Centre for Monitoring Indian Economy (CMIE).

Our analysis finds that the policy environment has become conducive to the development of energy storage systems in general and PSPs in particular. The participation of the private sector in the development of PSPs has increased considerably since 2018. Out of the 130 GW capacity that is under various stages of planning, 102 GW is being developed by the private sector. However, the ratio of projects which receive concurrence and are eventually completed remains low. Of the 91 projects in the dataset, 17 are under implementation, and six have been completed. The completed projects account for 3.3 GW of storage capacity. The low ratio of PSPs that are completed, combined with the experience of delay in executing hydropower projects, implies that the requirements of storage capacity addition from PSPs by 2026-27 and 2031-32 will be met only if the capacity under planning is realised and the projects are completed within six years.

The authors are researchers at the TrustBridge Rule of Law Foundation.