The Ministry of Power has exempted off-stream closed-loop pumped storage projects (PSP), irrespective of the quantum of capital expenditure, from the requirement of concurrence by the Central Electricity Authority (CEA).

However, the developers of such PSPs must seek technical guidance from the CEA, the Ministry said in a gazette notification.

The notification said hydroelectric generating stations, involving an estimated capital expenditure exceeding ₹30 billion (~$342 million), will require the CEA’s concurrence.

PSPs are seen as a viable energy storage solution to overcome the intermittency of renewable energy sources. India has an installed capacity of approximately. 6.4 GW of pumped storage capacity and a PSP potential of more than 200 GW.

A little over 3 GW of off-river PSP capacity was under construction as of February 1, 2025.

To accelerate PSP development, the government has exempted the systems from free power obligations and rationalized the environmental clearance process.

It has also waived the interstate transmission system (ISTS) charges for PSPs for which construction work is awarded on or before June 30, 2028.

The timeline for CEA concurrence of the detailed project reports (DPR) has been brought down from 90 to 50 days for all types of PSPs.

In April this year, the CEA greenlighted the DPRs of six PSPs with a total capacity of 7.5 GW. The projects were: Upper Indravati (600 MW) in Odisha, Sharavathy (2,000 MW) in Karnataka, Bhivpuri (1,000 MW) in Maharashtra, Bhavali (1,500 MW) in Maharashtra, MP-30 (1,920 MW) in Madhya Pradesh, and Chitravathi (500 MW) in Andhra Pradesh.

The government issued tariff-based competitive bidding guidelines to procure stored energy from existing, under-construction, or new PSPs. The minimum bid capacity for ISTS projects is 50 MW and 10 MW for intrastate transmission projects.

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