Pumped Hydro Storage (PHS) for Energy Solution

India is at a crucial juncture in its energy transition journey, with ambitious targets of achieving 500 GW of non-fossil energy capacity by 2030, and net zero emissions by 2070, the country is working hard to enhance its energy security and emerge as a global leader. A critical component of this strategy is the development and integration of Energy Storage Systems (ESS), including Battery Energy Storage Systems (BESS) and Pumped Hydro Storage (PHS). Pumped Hydro Storage (PHS) plays an important role for grid stability and energy storage solutions. According to Central Electricity Authority (CEA) India will need 26.69 GW of PHS capacity by 2031-32 to accommodate its renewable energy growth.

How Does PHS System Work?

Pumped Hydro Storage (PHS) stores electrical energy as the potential energy of water. This involves pumping water into a large reservoir at a high elevation—usually located on the top of a mountain or hill. When energy is required, the water in the reservoir is guided through a hydroelectric turbine, which converts the energy of flowing water to electricity. PHS allows energy storage for long duration for future use, making it extremely important to meet peak demands or compensate for variability in the grid. It also helps smoothen fluctuations in renewable energy generation and provide voltage support ancillary services.

Current Capacity of PHS and Plans for Expansion 

As of 2023, India had an installed PHS capacity of around 4.75 GW, with 3.3 GW operational in pumping mode. However, to meet the energy growth in the coming years and increasing integration of renewable energy sources into the national grid, the expansion plans need immediate execution. Currently, upcoming projects at various stages of development can add about  44.5 GW to the existing capacity. Advancements in technology and innovative project designs play an important role in the future of PHS in India. For instance, off-river PHS systems that do not require natural water bodies, offer greater site selection flexibility, and reduce environmental impacts. Incorporating the use of reversible turbines and advanced control systems in new and upcoming projects will help in enhancing the efficiency and cost-effectiveness of the projects, leading to better viability and more investments. 

Overcoming Challenges through Government Policies 

As India is on the path to reduce the emission intensity of its GDP by 45% by 2030 and achieve 50% of its installed capacity from non-fossil fuel sources by the same year, Pumped hydro storage projects (PSPs) are essential for grid stability and balancing the intermittent nature of renewable energy sources like wind and solar.

While PHS projects are a solution to India’s energy storage issues, these projects are significantly hampered by extended gestation periods, largely due to the cumbersome process of obtaining environmental and forest clearances. Furthermore, PHS projects do not benefit from the same tax incentives as other renewable energy technologies, such as solar and wind even after being recognised as renewable energy sources. There is also a massive underutilization of existing capacity as many projects remain dormant due to operational issues or topographical challenges.

To facilitate fast growth of these projects and overcome the challenges, Government has exempted certain off-river PSPs from environmental impact assessments and also added incentives to enhance the attractiveness and feasibility of PSP projects. These include waiver of inter- state transmission system (ISTS) charges for projects awarded until June 2025 to reduce operational costs and relaxation of stamp duty and registration fees, lowering financial barriers to entry. Acquisition of government land at a concessional rate for PSP projects is also a critical incentive to boost more projects. 

To achieve its renewable energy goals and ensuring a stable and reliable power supply in upcoming years, there is a need for government’s supportive policies, technological advancements, and significant investments. There is no doubt that India has all the desired resources to achieve this ambitious goals, it just needs to overcome the challenges and create a resilient energy ecosystem. 

Read more about PHS projects and India’s Energy Storage Issues in CII’s India’s Outlook on Clean Energy Storage: A Roadmap to Net Zero.