CHENNAI: Following the policies for wind and small hydel power projects, the state government has introduced the ‘Tamil Nadu Pumped Storage Projects Policy 2024’ on Saturday.
As part of its objectives, the policy states it aims to create an attractive investment environment for both public and private sector entities, including clear regulatory frameworks, financial incentives and streamlined approval processes to reduce the risks and uncertainties associated with investments.
Pumped Storage Projects (PSPs) are seen as key to the energy transition due to their ability to store excess renewable energy during low demand periods and supply it during peak times.
With the help of PSPs, the state also expects to meet the union government’s Renewable Purchase Obligation (RPO) targets by increasing the share of green energy in the state’s overall energy mix.
In addition, it also expects the generation of direct and indirect job opportunities for skilled and unskilled workers in the state.
The Tamil Nadu Green Energy Corporation (TNGEC) has been designated as the state nodal agency to implement the policy.
A senior TNGEC official said, “The Kadamparai pumped storage plant in Coimbatore, with a capacity of 400 MW, is currently operational. The government plans to build PSPs with a combined capacity of 15,000 MW in the southern and western districts, with detailed project reports (DPR) under preparation. Once approval is received from the union government, further steps will be taken.”
The policy, effective immediately, will remain in force for five years and applies to all PSPs, including those identified by the state government, the Central Electricity Authority, and private developers currently under survey and investigation in the state.
The policy encourages developers to identify and propose potential sites for PSPs, leveraging private sector efforts in discovering new locations while developing already identified ones. This approach is expected to broaden the exploration of suitable sites for PSPs.
Projects commissioned during the policy period are eligible for benefits and incentives for up to 40 years, with a possible 10-year extension. Developers are required to pay an annual fee of `20,000 per MW of installed capacity.