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PSPs Crucial for Storing Surplus Green Power, Identified Potential Stands at 224 GW: Power Minister

India has mapped a massive 224 GW of pumped storage potential, with 7 GW already running, 12 GW under construction, and 78 GW advancing through planning. PSPs can play a critical role by storing surplus green power and meeting electricity demand during non-solar hours, emphasised Union Power Minister Manohar Lal.

November 18, 2025. By Mrinmoy Dey

A nationwide pumped storage projects (PSP) potential of approximately 224 GW has been identified. Of this, 10 PSPs with a total capacity of around 7 GW have been commissioned, another 10 PSPs of about 12 GW capacity are under construction and 56 PSPs with a capacity of about 78 GW are at various stages of planning and development, stated Union Power Minister Manohar Lal while addressing a meeting of the Consultative Committee of the Members of Parliament in Andhra Pradesh.

The Minister emphasised that PSPs can play a critical role by storing surplus green power and meeting electricity demand during non-solar hours. On the issue of evaporation losses from PSP reservoirs, Lal suggested deploying floating solar power projects as a viable solution.

He further underscored the pivotal role of State Governments in facilitating PSP development through timely site allocation, water allocation, and expeditious clearances. He urged the Members of the Committee to engage with State Governments to consider withdrawal of charges such as Green Energy cess, water tax, and reservoir lease fees, to accelerate the development of PSPs.

The Members were apprised of the key policy initiatives undertaken by the Government of India to accelerate PSP development. These include the issuance of Guidelines for PSP development outlining modalities for site allotment, exemption from free power and Local Area Development Fund obligations etc., and a full waiver of Inter-State Transmission (ISTS) charges for 25 years for projects awarded on or before June 30, 2028.

The Government has also extended budgetary support for enabling infrastructure, notified Renewable Consumption Obligations for energy storage systems, and issued Tariff-Based Competitive Bidding (TBCB) guidelines for procurement of storage capacity/stored energy from PSPs.

Further, off-stream closed-loop PSPs have been exempted from the requirement of CEA concurrence. Additionally, the capital expenditure threshold for CEA concurrence for hydro and PSP projects has been revised to INR 3,000 crore, as against the earlier limit of INR 2,500 crore for competitively bid projects and INR 1,000 crore for MoU-route projects.

Shripad Yesso Naik, Minister of State for Power also addressed the Committee, and informed that the successful commissioning during 2025-26 of all eight units of the 1680 MW Pinnapuram PSP alongside the 500 MW Tehri PSP marks a major national achievement reflecting strong coordination between the Centre, States, CPSUs and the private sector.

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Pumped storage projects in India

Role of PSPs in RE integration

Shripad Yesso Naik