Renewable power companies gain from pumped storage projects

Renewable energy-focused companies like Tata Power, Adani Green Energy, JSW Neo Energy, Torrent Power and Greenko will benefit from Union Finance Minister Nirmala Sitharaman's announcement in the budget to frame a policy for promoting pumped storage projects.

''A policy for promoting pumped storage projects will be brought out for electricity storage and facilitating smooth integration of the growing share of renewable energy with its variable & intermittent nature in the overall energy mix,'' she says in her Budget speech.

A pumped hydro storage project (PSP) is a commonly used technology in many countries, in which water is pumped from a lower elevation reservoir to a higher elevation using low-cost surplus off-peak electric power to run the generators. During peak hour electrical demand, the stored water is released through turbines to produce electric power to balance shortages in the grid. The Union Ministry of Power came out with draft guidelines on pumped hydro storage projects in March last year to generate over 18 gigawatts (GW) of electricity to bring stability to grids and meet the peak power demand by 2032.  

The draft guidelines say India has an on-river pumped storage potential of 103 GW. It says eight projects (4745.60 MW) are presently in operation, four projects (2780 MW) are under construction, and 24 projects (26,630 MW) have been allotted by states which are under different stages of development. Out of about 56 projects with a potential of 73,240 MW identified, about 18 are in Maharashtra and about 10 projects in the North East.

''The policy to promote the development of pumped storage projects, would facilitate the integration of renewables with the grid. However, timely implementation of policy measures remains key'', says Girishkumar Kadam, Senior Vice President & Group Head - Corporate Ratings, ICRA Limited. ''The proposed policy to promote pumped storage projects for electricity storage will help facilitate smooth integration of growing renewable energy share thereby reducing challenges posed by its variable and intermittent nature'', says Amit Jain, Global Chief Executive Officer - Sterling and Wilson Renewable Energy Group.  A policy for promoting pumped storage projects will boost renewable energy penetration through storage integration, says SK Gupta, CFO, AMPIN Energy Transition.

Tata Power has already announced the construction of two projects - a 1,800 MW PSP at Shirawata, Pune district and 1,000 MW PSP at Bhivpuri in Raigad district in Maharashtra with an investment of ₹13,000 crore. It has also identified three new potential sites with 9000 MW capacity, 3000 MW each at Potalpali in  Thokarwadi, Kataldhara at Walwhan, and Nenavali in Mulshi, all in Raigad district of Maharashtra, according to  Praveer Sinha, CEO & MD, Tata Power.

Following the notification on draft guidelines, nearly 40 gigawatts (GW) of PSP hydro projects are being proposed by leading hydropower producers like National Hydro Electric Power Corporation (NHPC), Tata Power, Adani Green Energy, Greenco etc and nearly half of these potential sites are in Western Ghats, say sources. JSW Energy's subsidiary, JSW Neo Energy has a Memorandum of Understanding with the Government of Maharashtra for setting up a 960 MW capacity PSP at Pane (Raigarh) Pump Storage Project. JSW's target is to have 10 GW PSPs and has MoUs in place for 6 GW PSPs with State Governments like Maharashtra, Chhattisgarh, Telangana, and Rajasthan.

Torrent Power is planning to invest ₹27,000 crore in three PHPs at Karjat (3,000 MW) in the Raigarh district and at Maval (1,200 MW) and Junnar (1,500 MW) in Pune district of Maharashtra. The Greenko group is building a 1,680 MW PSP near Kurnool, Andhra Pradesh which is nearing completion and is planning three more large PSPs. The NHPC has an agreement with the Maharashtra government to build pumped storage hydro projects totalling 7,350 MW capacity at Kalu - 1,150 MW, Savitri - 2,250 MW, Jalond - 2,400 MW and Kengadi -1,550 MW. Similarly, Adani Green Energy's agreement with the Maharashtra Government is to invest nearly ₹60,000  crore in PSP projects over the next five years in the State. NHPC and Gujarat Power Corporation Limited (GPCL) are planning to develop 750 MW Kuppa Pumped Hydro Storage Project in Chhota Udaipur, Gujarat.