New Delhi: Power Minister Manohar Lal on Monday urged Members of Parliament (MPs) to push state governments to remove charges that slow down pumped storage project (PSP) development. According to a statement from the Ministry of Power, he asked parliamentarians to engage with states so that they consider withdrawing “charges such as green energy cess, water tax, and reservoir lease fees” to accelerate PSP deployment.
The remarks came during a meeting of the Consultative Committee of MPs for the Ministry of Power held at Pinnapuram in Kurnool, Andhra Pradesh. The meeting focused on the role of PSPs in balancing a renewable-heavy grid.
The minister emphasised that PSPs “can play a critical role by storing surplus green power and meeting electricity demand during non-solar hours.” He also addressed concerns over evaporation losses in PSP reservoirs, suggesting that “deploying floating solar power projects” could serve as a practical mitigation measure.
The Power Ministry said that the committee was told that India has identified approximately 224 GW of PSP potential nationwide. Ten PSPs with a total capacity of around 7 GW have already been commissioned, while another 10 PSPs of nearly 12 GW are under construction. A further fifty-six PSPs totalling 78 GW are in various stages of planning and development.
Officials also briefed members on a series of policy interventions introduced to strengthen PSP economics. These include PSP development guidelines covering site allotment and exemptions from free power and Local Area Development Fund obligations, as well as a 25-year waiver of inter-state transmission system (ISTS) charges for projects awarded on or before June 30, 2028.
The statement added that the government has extended budgetary support for enabling infrastructure, notified renewable consumption obligations for energy storage systems, and issued tariff-based competitive bidding guidelines for procuring storage capacity. Off-stream closed-loop PSPs have been exempted from the need for Central Electricity Authority (CEA) concurrence, while the capital expenditure threshold for CEA concurrence has been raised to Rs 3,000 crore from earlier limits of Rs 2,500 crore and Rs 1,000 crore.
Members of the Consultative Committee welcomed the Power Ministry’s policy push, the statement said. They noted that recent measures — easing technical appraisal requirements for off-stream closed-loop PSPs, providing budgetary support, and waiving ISTS charges — have “significantly improved confidence among developers and states.”
The committee also discussed the environmental aspects of PSPs and other renewable sources such as wind and solar. According to the statement, members highlighted the “relatively lower environmental impact” of PSPs.
Minister of State for Power Shripad Yesso Naik also addressed the committee. He said that the commissioning during 2025–26 of all eight units of the 1,680 MW Pinnapuram PSP and the 500 MW Tehri PSP “marks a major national achievement,” reflecting coordination between the Centre, states, CPSUs and the private sector.
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