SYLLABUS

GS-2: Government Policies and Interventions for Development in various sectors and Issues arising out of their Design and Implementation.

GS-3: Conservation, Environmental Pollution and Degradation, Environmental Impact Assessment.

Context: India is expanding Pumped Storage Hydropower (PSH) to integrate renewable energy, meet growing electricity demand and strengthen grid stability while pursuing its target of 500 GW of non-fossil fuel capacity by 2030.

Understanding Pumped Storage Hydropower 

• A Pumped Storage Project (PSP) is a large-scale energy storage system that stores surplus electricity by pumping water to an upper reservoir and generates electricity by releasing the stored water through turbines when demand rises.

• Working Mechanism of Pumped Storage Projects (PSPs): A typical PSP consists of two reservoirs located at different elevations, connected through waterways and reversible pump-turbines.

• Step 1 (Pumping and Energy Storage): During periods of surplus electricity, power is used to pump water from the lower reservoir to the upper reservoir. The water stores energy as gravitational potential energy.
• Step 2 (Electricity Generation): When electricity demand rises, water flows from the upper reservoir through turbines, generating electricity that can be supplied to the grid.
• Step 3 (Recharging the System): During periods of low demand or surplus electricity, water is pumped back to the upper reservoir, preparing the system for the next cycle.

• Types of Pumped Storage Projects: PSPs are classified according to the location of their reservoirs in relation to rivers, streams and perennial natural watercourses.

• On-stream PSP: Both reservoirs are located on a river, stream or nallah. Water flows through turbines to generate electricity and is pumped back to the upper reservoir when surplus power is available.
• Off-stream open-loop PSP: One reservoir is located on a river, stream or nallah, while the other is located away from a perennial natural watercourse. Water is cycled between the reservoirs to generate and store electricity.
• Off-stream closed-loop PSP: Neither reservoir is located on a river, perennial stream or perennial nallah. Both reservoirs are situated away from perennial natural watercourses, and water is circulated between them.

India’s Status in Pumped Storage Hydropower

• As of July 2026, India had crossed 300 GW of installed non-fossil fuel capacity. 

• The CEA projects a storage requirement of 73.93 GW by 2031–32, comprising 26.69 GW from PSPs and 47.24 GW from BESS.

• As of August 2026, India had 7.43 GW of operational PSP capacity across 10 projects. Another 15.87 GW was under construction or implementation, while 10.40 GW had been concurred or appraised by the CEA.

• India has identified 320 PSPs with 345.38 GW potential—56.67 GW from on-stream and 288.71 GW from off-stream projects. 

• The Western Region leads with 129.72 GW, followed by the Southern Region with 97.76 GW.

• The CEA envisages adding 100.81 GW by 2035–36, taking cumulative PSP capacity to approximately 105.56 GW. 

• India ranked fourth globally in installed PSP capacity at the end of 2025, with 7.18 GW.

Challenges in Pumped Storage Hydropower

• Clearances and Project Delays: Delays in environmental and forest clearances, statutory approvals and Detailed Project Report preparation slow project execution.

• Land Acquisition and Environmental Concerns: Large reservoir requirements, complex land ownership and rehabilitation issues can cause local opposition and affect forests and biodiversity.

• Geographical and Technical Constraints: Projects require suitable terrain, elevation differences and detailed geological, hydrological and seismic assessments.

• High Investment and Financing Risks: Substantial capital requirements, long construction periods and uncertainties over project viability make financing difficult.

Government Initiatives

• PSP Development Guidelines, 2023: The Ministry of Power issued dedicated guidelines on 10 April 2023 to facilitate project allocation and accelerate development.

• National Framework for Energy Storage, 2023: The framework promotes energy storage through measures including an Energy Storage Obligation trajectory.

• Transmission Charge Waiver: Eligible hydro PSP projects awarded construction work by 30 June 2028 receive a 100% waiver of Inter-State Transmission System charges.

• Competitive Procurement and Regulatory Support: Tariff-based competitive bidding and Central Electricity Regulatory Commission regulations support procurement and enable eligible PSPs to provide ancillary grid services.