Chairing a meeting of the Consultative Committee of Members of Parliament, Lal said that ten PSPs with a capacity of 7 GW are already commissioned, another ten of 12 GW are under construction, and 56 projects totalling 78 GW are in planning and development.
Union Power Minister Manohar Lal has announced that India has identified a potential of 224 GW for pumped storage projects (PSPs) across the country, highlighting their role in storing surplus renewable energy during non-solar hours.
Chairing a meeting of the Consultative Committee of Members of Parliament at Pinnapuram in Andhra Pradesh’s Kurnool district on Monday, Lal said, “Of this, ten PSPs with a total capacity of around 7 GW have been commissioned, another ten PSPs of about 12 GW capacity are under construction, and 56 PSPs with a capacity of about 78 GW are at various stages of planning and development.”
The committee was briefed on key policy measures designed to accelerate PSP deployment. These include the issuance of PSP development guidelines outlining modalities for site allotment, exemption from free power and Local Area Development Fund obligations, and a 25-year waiver of Inter-State Transmission (ISTS) charges for projects awarded on or before June 30, 2028.
Lal added, “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 procurement of storage capacity or stored energy from PSPs.”
Further, off-stream closed-loop PSPs have been exempted from the requirement of CEA concurrence.
Lal explained, “Additionally, the capital expenditure threshold for CEA concurrence for hydro and PSP projects has been revised to ₹30 billion, as against the earlier limit of ₹25 billion for competitively bid projects and ₹10 billion for MoU‑route projects.”
To tackle operational challenges like evaporation losses from PSP reservoirs, he proposed floating solar projects as a viable solution.
Lal reiterated the pivotal role of state governments in facilitating PSP development through timely site allocation, water allocation, and expeditious clearances. He further urged committee members to engage with state governments to withdraw charges such as green energy cess, water tax, and reservoir lease fees to accelerate PSP development.
Committee Response
Committee members commended the Ministry of Power for the comprehensive policy push being given to PSPs. They noted that the recent steps, such as easing the technical appraisal requirements for off-stream closed loop PSPs, strengthening the viability through budgetary support for enabling infrastructure and waiver of ISTS charges, have significantly improved confidence among developers and states.
They also provided suggestions to further accelerate PSP development across the country and discussed the environmental implications of PSPs and renewable energy sources such as wind and solar, reiterating their relatively lower environmental impact.
Also addressing the committee, Minister of State for Power Shripad Yesso Naik noted that the successful commissioning during 2025‑26 of all eight units of the 1,680 MW Pinnapuram PSP, alongside the 500 MW Tehri PSP, would mark a major national achievement. He said this reflects strong coordination between the Centre, states, central public sector enterprises (CPSEs), and the private sector.