Hydropower is a critical source of power generation, playing a key role in facilitating the energy transition. As a source of energy storage with a unique characteristic of efficient and flexible operations, hydropower is essential for load balancing and maintaining a stable grid. With an installed capacity of 52 GW, hydropower currently accounts for 13 per cent share in the country’s energy mix.
Today, pumped storage plants (PSPs) represent the most cost-effective large-scale storage technology on a levellised cost basis. PSPs are rapidly gaining traction as the country works to achieve its 500 GW clean energy target by 2030. They are expected to play an important role in maintaining grid stability as the share of infirm renewables in the grid increases. PSPs are expected to drive 40 per cent of new capacity additions in the segment, with 26.8 GW of capacity at various stages of development.
In order to support capacity addition in the segment, a number of policy measures and reforms have been announced. These guidelines to promote the development of PSPs and a waiver of ISTS charges for new hydro and pumped storage projects. Overall, the present market scenario is promising, with strong policy and regulatory support and wide public and private sector interest. Multiple partnerships are being signed for tapping the hydro and PSP potential. Around 12 GW of PSPs have been green signalled by the government. Meanwhile, the world’s first and largest integrated renewable energy project with 1.6 GW of PSP capacity is close to commissioning.
However, additional actions are needed to promote hydropower development. These include ensuring accessible financing for hydropower projects, streamlining development standards for environmental clearance, expediting off-river projects and modernising ageing hydropower plants.
Power Line’s Infocus section on section on Hydropower and Pumped storage explores the new and emerging trends and recent developments in the segment, as well as the major issues, challenges and future outlook.