Indian Government Releases Guidelines to Promote Development of Non-polluting Pumped Storage Projects

Representational image. Credit: Canva

The Indian government has released final guidelines to encourage the development of Pumped Storage Projects (PSPs) across the country. PSPs are considered non-polluting and environmentally friendly, making them an attractive option for the government’s energy needs. The guidelines were finalised after receiving suggestions from stakeholders, according to a notification from the power ministry.


The guidelines state that state governments can allot project sites to developers through competitive bidding, tariff-based competitive bidding, and on a nomination basis to state PSUs and CPSUs. The PSPs have a long service life of over 40-50 years and provide the necessary scale of storage, resulting in a low cost of delivered energy over the life of the project.

The ministry estimates that PSPs account for over 95% of the installed global energy storage capacity and can store up to 9,000 GWh of electricity worldwide. Developers are required to start construction within two years from the project’s allotment date, failing which the state will cancel the project site allotment. However, a one-year relaxation may be granted on a conditional basis. No upfront premium will be charged for project allocation.

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The guidelines also mention that states may exempt land acquisition by off-the-river PSPs from payment towards stamp duty and registration fees. The government may provide government land to developers on an annual lease rent basis at a concessional rate, subject to availability. The PSPs may be supported through concessional climate finance, and sovereign green bonds may be issued to mobilise resources for green infrastructure, including PSPs.


According to the Central Electricity Authority, the on-river pumped storage potential in India is estimated to be 103 GW.

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