Centre Flags Strong PSP Pipeline With 7 GW Commissioned, 12 GW Under Construction

The Ministry of Power (MoP) at a committee meeting informed the stakeholders that all eight units of the 1,680 MW Pinnapuram Pumped Storage Project (PSP), along with the 500 MW Tehri PSP, were commissioned during 2025–26. 

The Ministry of Power held a meeting of the Consultative Committee of Members of Parliament at Pinnapuram in Kurnool district, Andhra Pradesh, to review pumped storage projects (PSPs) in India. The meeting was chaired by Shripad Yesso Naik, Minister of State for Power.

The committee was informed that India has identified about 224 GW of pumped storage potential. Ten projects totalling roughly 7 GW have been commissioned, another 10 projects of about 12 GW are under construction, and 56 projects with a combined capacity of around 78 GW are in various stages of planning and development.

The meeting, which focused on Pumped Storage Projects (PSPs), was chaired by Manohar Lal, Union Minister of Power. It was attended by Shripad Yesso Naik, Minister of State (MoS) for Power, Members of the Consultative Committee for the Ministry of Power from the Lok Sabha and Rajya Sabha, and senior officials from the Ministry of Power, the Central Electricity Authority (CEA), and CPSUs.

Key Outcomes of the Meeting

Addressing the members, Manohar Lal, Union Minister of Power, emphasized that PSPs can play a critical role by storing surplus green power and meeting electricity demand during non-solar hours.

1. Evaporation losses from PSP reservoirs: The Minister suggested deploying floating solar power projects as a viable solution.
2. Role of State Governments: Facilitating PSP development through timely site allocation, water allocation, and expeditious clearances.
3. Withdrawal of charges: He urged Members of the Committee to engage with State Governments to consider withdrawing charges such as the Green Energy cess, water tax, and reservoir lease fees to accelerate PSP development.

The Members were apprised of the key policy initiatives undertaken by the Government of India to accelerate Pumped Storage Project (PSP) development.

These include the issuance of Guidelines for PSP development, outlining modalities for site allotment, exemption from free power and Local Area Development Fund obligations, and a full waiver of Inter-State Transmission System (ISTS) charges for 25 years for projects awarded on or before 30.06.2028.

Budgetary Support

The Government has also extended budgetary support for enabling infrastructure, notified Renewable Consumption Obligations for energy storage systems, and issued Tariff-Based Competitive Bidding (TBCB) guidelines for the procurement of storage capacity/stored energy from PSPs. Further, off-stream closed-loop PSPs have been exempted from the requirement of CEA concurrence.

Additionally, the capital expenditure threshold for CEA concurrence for hydro and PSP projects has been revised to ₹3,000 crore, compared to the earlier limits of ₹2,500 crore for competitively bid projects and ₹1,000 crore for MoU-route projects.

The Members of the Consultative Committee for the Ministry of Power commended the Ministry for the comprehensive policy push being given to PSPs. They noted that recent steps—such as easing technical appraisal requirements for off-stream closed-loop PSPs, strengthening viability through budgetary support for enabling infrastructure, and waiving ISTS charges—have significantly improved confidence among developers and States.

The Members of the Committee provided valuable suggestions to further accelerate the development of PSPs across the country. The Committee also discussed the environmental implications of PSPs and renewable energy sources such as wind and solar. They underscored the advantages of PSPs, highlighting their relatively lower environmental impact.