Govt guidelines clarify aspect of developing pumped storage projects
POWER & RENEWABLE ENERGY

Govt guidelines clarify aspect of developing pumped storage projects

The Ministry of Power has issued guidelines to govern and promote the development of pumped storage projects (PSP) throughout the country. These guidelines clarify the methods for project site allocation through competitive bidding and rule out any upfront premium for project allocation in order to make it financially viable.

Tax breaks and participation in power markets are also planned by the ministry to make these projects financially viable and appealing to developers and investors alike.

Various factors related to the energy transition are expected to drive the development of PSPs in India. PSPs are critical for increasing the use of variable renewable energy sources in the energy mix, providing critical backup during periods of high demand, and ensuring grid stability.

According to the Central Electricity Authority (CEA), India will need 26.7 GW of PSP and 47.2 GW of battery energy storage systems by 2032 to integrate renewable energy capacity.

State governments may allocate project sites to developers in a variety of ways, including through nominations to Central Public Sector Undertakings (CPSUs) and State Public Sector Undertakings (SPSUs). According to the guidelines, governments may also use competitive bidding, tariff-based competitive bidding, or self-identified off-stream pumped storage projects.

Furthermore, developers must begin construction work within two years of the project's allotment date, or the project site will be cancelled by the concerned state. However, a relaxation of one year may be granted to those projects where the delay in the start of construction is attributable to pending environment clearance and forest clearance.

States must ensure that no upfront premium is charged for project allocation in order to ensure the viability of PSPs. The appropriate regulator must ensure that grid-supporting services such as spinning reserves, reactive support, black start, peaking supply, tertiary and ramping support, faster start-up, and shutdown are appropriately monetized.

To provide appropriate pricing signals to peak and base load-generating plants, the regulator must notify peak and off-peak tariffs for generation.

PSPs and other storage projects will be permitted to participate in all power exchange market segments, including the high-price segment of the Day Ahead Market (HP-DAM). This ensures that they can benefit from the price difference between peak and off-peak tariffs.

The ministry has determined that abandoned mines, including coal mines, in various parts of the country could be used as hydro storage, becoming natural enablers for the development of PSPs.

In consultation with other government stakeholders, it has begun efforts to identify and develop exhausted coal mines as potential PSP sites.

PSPs play an important role in India's transition to a more sustainable energy system. PSPs can offload excess energy during off-peak hours, increasing the load factor of other systems and providing additional capacity during peak hours, because wind and solar energy can be generated when energy demand is low. PSPs also provide critical backup during periods of high demand while keeping the grid stable.

Also Read
Tamil Nadu CM to introduce third master plan for Chennai by 2025
Godrej Properties shares increases by 8%

The Ministry of Power has issued guidelines to govern and promote the development of pumped storage projects (PSP) throughout the country. These guidelines clarify the methods for project site allocation through competitive bidding and rule out any upfront premium for project allocation in order to make it financially viable. Tax breaks and participation in power markets are also planned by the ministry to make these projects financially viable and appealing to developers and investors alike. Various factors related to the energy transition are expected to drive the development of PSPs in India. PSPs are critical for increasing the use of variable renewable energy sources in the energy mix, providing critical backup during periods of high demand, and ensuring grid stability. According to the Central Electricity Authority (CEA), India will need 26.7 GW of PSP and 47.2 GW of battery energy storage systems by 2032 to integrate renewable energy capacity. State governments may allocate project sites to developers in a variety of ways, including through nominations to Central Public Sector Undertakings (CPSUs) and State Public Sector Undertakings (SPSUs). According to the guidelines, governments may also use competitive bidding, tariff-based competitive bidding, or self-identified off-stream pumped storage projects. Furthermore, developers must begin construction work within two years of the project's allotment date, or the project site will be cancelled by the concerned state. However, a relaxation of one year may be granted to those projects where the delay in the start of construction is attributable to pending environment clearance and forest clearance. States must ensure that no upfront premium is charged for project allocation in order to ensure the viability of PSPs. The appropriate regulator must ensure that grid-supporting services such as spinning reserves, reactive support, black start, peaking supply, tertiary and ramping support, faster start-up, and shutdown are appropriately monetized. To provide appropriate pricing signals to peak and base load-generating plants, the regulator must notify peak and off-peak tariffs for generation. PSPs and other storage projects will be permitted to participate in all power exchange market segments, including the high-price segment of the Day Ahead Market (HP-DAM). This ensures that they can benefit from the price difference between peak and off-peak tariffs. The ministry has determined that abandoned mines, including coal mines, in various parts of the country could be used as hydro storage, becoming natural enablers for the development of PSPs. In consultation with other government stakeholders, it has begun efforts to identify and develop exhausted coal mines as potential PSP sites. PSPs play an important role in India's transition to a more sustainable energy system. PSPs can offload excess energy during off-peak hours, increasing the load factor of other systems and providing additional capacity during peak hours, because wind and solar energy can be generated when energy demand is low. PSPs also provide critical backup during periods of high demand while keeping the grid stable. Also Read Tamil Nadu CM to introduce third master plan for Chennai by 2025 Godrej Properties shares increases by 8%

Next Story
Technology

We’re building robots that flow, not just move

Founded in 2021, Flo Mobility is reimagining construction automation with vision-AI robots designed for seamless movement through complex sites. In conversation with CW, Manesh Jain, Founder & CEO, discusses the company’s origin, its LiDAR-free tech stack, and expansion plans in the Middle East and US.What inspired the name Flo Mobility? Why ‘Flo’ and not ‘Flow’?When we started the company in 2021, our focus was on building autonomous navigation systems for robots. Since our work centred around robot movement, ‘mobility’ naturally became part of the name. We wanted to co..

Next Story
Real Estate

We’re committed to setting benchmarks in sustainable luxury living

From a landmark land acquisition in Boisar to ambitious launches across the Mumbai Metropolitan Region (MMR), National Capital Region (NCR), Bengaluru and Pune, Birla Estates is driving future-ready growth with a strong focus on sustainability, partnerships and premium living, firmly anchored in its LifeDesigned® philosophy. K T Jithendran, Managing Director & CEO, outlines the company’s premium, sustainable growth playbook in conversation with PRATAP PADODE, Editor-in-Chief, CW. Excerpts:Birla Estates recently acquired a 70.92-acre land parcel in Boisar, Maharashtra, for..

Next Story
Infrastructure Urban

Mumbai’s land crunch and ageing homes call for structured renewal

Founded in 2022, Etonhurst Capital Partners is a real-estate fund management platform focused on the Indian market. As the firm achieves the first close of Rs 1.8 billion for its debut Rs 5 billion fund, Bamasish Paul, Co-founder, Managing Partner & CEO, discusses its sharp focus on redevelopment-driven value creation in Mumbai’s urban core with CW. Excerpts:Etonhurst Capital has achieved a significant milestone with the first close of Rs 1.8 billion for its Rs 5 billion fund. What factors contributed to this early success and how do you plan to attract further investments to r..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?