Pump Storage Projects: Status, Approvals, and Policy Measures
UPSC / SSC current affairs note · IR
Why in news
The government has taken multiple steps to expedite pump storage projects (PSPs) for grid stability and renewable energy integration. Recent notifications have eased environmental clearances, reduced DPR approval timelines, and provided tariff-based bidding guidelines and transmission charge exemptions to boost private sector participation.
Background
Pump storage projects (PSPs) are a form of hydroelectric energy storage that uses excess electricity to pump water to a higher reservoir and releases it to generate power during peak demand. India has 11 PSPs under construction (15,870 MW) and 6 approved but yet to start construction (8,140 MW).
Key facts
11 pump storage projects (PSPs) with 15,870 MW capacity are under construction.
6 PSPs with 8,140 MW capacity have been approved/evaluated by CEA but construction is yet to start.
MoEF&CC notified on 18.05.2023 enabling B2 category appraisal for PSPs under certain conditions.
MoEF&CC issued specific Terms of Reference (ToR) for off-stream PSPs on 14.08.2023: baseline data collection for one season (non-monsoon) for closed-loop and two seasons (pre- and post-monsoon) for open-loop.
MoEF&CC extended survey provisions in forest areas to hydropower/PSPs on 20.08.2024 and increased borewell numbers for surveys on 10.09.2025.
CEA revised DPR guidelines reducing approval timeline from 90 to 50 days; inter-state aspects approval not required for PSPs.
Government revised capital expenditure limit to ₹3,000 crore for hydropower projects requiring CEA concurrence (Gazette notification 01.08.2025). Off-stream closed-loop PSPs exempted from CEA concurrence.
Ministry of Power notified guidelines on 10.04.2023 to promote PSP development including budgetary support for enabling infrastructure.
Tariff-based competitive bidding (TBCB) guidelines for procurement of storage capacity/energy from PSPs notified on 06.02.2025.
CERC provided 100% exemption from inter-state transmission system (ISTS) charges for PSPs for 25 years from COD (notification 26.06.2025).
Prelims pointers
- Pump Storage Project (PSP)
- Central Electricity Authority (CEA)
- Ministry of Environment, Forest and Climate Change (MoEF&CC)
- Central Electricity Regulatory Commission (CERC)
- ISTS charges exemption for PSPs
- Tariff-based competitive bidding (TBCB) guidelines
- Off-stream closed-loop PSP
- B2 category environmental appraisal
- DPR approval timeline reduction from 90 to 50 days
- Capital expenditure limit of ₹3,000 crore for hydropower projects
Mains angles
- Discuss the role of pump storage projects in integrating renewable energy and ensuring grid stability.
- Critically examine the recent policy measures to promote pump storage projects in India.
- Analyze the environmental clearance process for pump storage projects and the steps taken to streamline it.
- Evaluate the impact of tariff-based competitive bidding and transmission charge exemptions on private sector participation in PSPs.