India Boosts Hydropower with Key Reforms and Support for Pumped Storage Projects
The Government of India has launched several initiatives to accelerate the development of hydro pumped storage projects (PSPs) across the country.
Key measures include budgetary support for enabling infrastructure such as roads, bridges, ropeways, railway sidings, communication networks, and transmission lines from powerhouses to pooling points, including upgrades to pooling substations.
In April 2023, the Ministry of Power issued guidelines to promote PSP development. These cover site allotment methods, exemptions from free power obligations and Local Area Development Funds, simplified environmental clearance processes, and the use of exhausted coal mines for PSPs.
To further encourage investment, the government has waived Inter-State Transmission System (ISTS) charges for PSPs awarded on or before June 30, 2028.
The Central Electricity Authority (CEA) has streamlined the approval process by revising guidelines for Detailed Project Reports (DPRs), reducing the timeline for concurrence from 90 days to 50 days. The CEA also launched the “Jal Vidyut DPR” portal, enabling real-time monitoring of survey and investigation activities and tracking of delays.
To ensure transparency and fair competition, the Ministry of Power has introduced Tariff-Based Competitive Bidding (TBCB) guidelines for procuring storage capacity or stored energy from PSPs.
The Ministry of Environment, Forest & Climate Change (MoEF&CC) has also supported PSP development. On May 18, 2023, it notified the appraisal of PSPs under the B2 category with specific conditions. Further, on August 14, 2023, it issued Terms of Reference (ToR) for off-stream PSPs, requiring baseline data collection for one season (non-monsoon) for closed-loop systems and two seasons (pre- and post-monsoon) for open-loop systems.
In August 2024, the MoEF&CC extended forest drilling investigation provisions to PSPs, treating them on par with mining activities.
As of June 30, 2025, the status of PSPs in India is as follows:
- 10 PSPs (6.2 GW) have been commissioned.
- 8 PSPs (8.5 GW) are under construction.
- 5 PSPs (5.8 GW) have received concurrence from the CEA.
- 46 PSPs (64.8 GW) are under survey and investigation for DPR preparation.
These initiatives reflect India’s commitment to expanding clean and renewable energy through large-scale hydro storage solutions.
