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Business News/ Opinion / Views/  Pumped storage hydro projects can help meet our energy goals

India is the third largest producer and consumer of electricity globally, with annual electricity production of around 1,200-1,300TWh and one of the largest synchronous power grids. With an ambitious decarbonization target announced at last year’s CoP-26 climate summit in Glasgow, Prime Minister Narendra Modi raised India’s nationally-determined contribution (NDC) goal of non-fossil energy capacity to 500GW by 2030, from 450 GW earlier, to help us achieve net zero carbon emissions by 2070.

As of December 2021, the installed generation capacity of the country stood at 393GW, comprising 235GW of thermal, 151GW of renewable (wind, solar, hydro and biomass) and 6.78GW of nuclear. India saw its peak electricity demand surpass 200GW in 2021. As per a study done by the Central Electricity Authority (CEA), our storage requirement by 2030 is forecast at 41GW and this aim is getting much-awaited attention in the country.

There is a paradigm change in our power system operations. In the past, fully-controllable power generation followed non-controllable load demand. Now with renewable energy (RE) sources, generation is no longer fully controllable. The variability of RE resources due to weather fluctuations means uncertainty in generation output. This requires the adoption of grid-scale energy storage technologies to complement these sources.

Pumped storage hydro (PSH) plants are highly useful options for the integration of RE power with the power system. PSH plants are storage systems based on hydropower operations between two or more reservoirs (upper and lower) with an elevation difference. At the time of demand, downward water flow generates electricity with a hydraulic turbine, and water is pumped back to the upper reservoir using power from grid or RE sources, with an overall efficiency of 75-80%.

In India, PSH potential of about 120GW has been identified at about 120 sites. Yet, some of these sites could be taken up only after obtaining land, forest and environmental clearances. Only nine plants with an installed capacity of 4,785MW have been commissioned so far, and three with a capacity of 2.7GW are under construction. Out of the nine PSH plants commissioned, three of 1,480MW capacity are yet to be operated in pumping mode, for various reasons. Apart from these, about 17 PSH projects with a capacity of 16.5GW in different states are under various stages of implementation (which include pre-feasibility studies, detailed surveys, investigations and project reports, and clearances).

A comprehensive identification of sites for an off-river closed-loop system and the use of the sea as a reservoir (upper or lower), among other such new hydropower techniques, are yet to be done in India. The country has 5,745 large dams, which provide an excellent opportunity for developing PSH plants by placing them in between two large dams in a cascade format, or by using one dam and a second reservoir on a hill-top in a manner that will have a very low impact on biodiversity and involve few resettlement and rehabilitation (R&R) challenges.

Pumped storage schemes use domestically produced material and even the electrical mechanical parts are made in India, so PSH plants can serve the aims of Atmanirbhar Bharat. The ministry of power (MoP) has clarified that energy storage systems shall be an integral part of our power system under the Electricity Act, and that setting up a standalone energy storage system shall not require a licence.

At present, a conventional model approach is being taken to PSH plants and given the declining tariffs of solar energy, beneficiaries and users like discoms find them too costly and less attractive as a storage option. As a result of the high investment cost and long gestation for a PSH project, private participation has been low. Most of the current PSH plants are owned by state governments and Centre-state joint venture power generation utilities, except one project being developed by an independent power producer.

A river-based PSH project is considered a ‘river valley project’ even if no new dams are built on the relevant river, which results in a very long time (an estimated 3–5 years) to obtain clearances from the ministry of environment, forest and climate change (MoEF&CC). Separate guidelines for off-river PSH projects for early concurrence are not available, so financial closure can take long.

Hydro and PSH projects are a state government legislative subject, and require the support of many policymakers, including the MoP, MoEF&CC and electricity regulators, apart from state governments. There is a need to adopt the sustainability guidelines of the International Hydropower Association and to carry out an ex-post analysis of a few operational storage projects, which might help to dispel some apprehensions related to energy storage projects.

In March 2019, the MoP announced several policy measures to promote investment in large hydro projects (above 25MW) accorded RE status, including the introduction of hydro purchase obligation and budgetary support for flood moderation and enabling infrastructure. In 2022, ancillary service regulations for secondary and tertiary reserve ancillary services and the bundling of hydro with solar and wind power were notified. It is heartening to note that a policy for pumped storage has been prepared by the government and is expected to be announced soon. States should also decide and announce a basis for PSH-project allotments through a process that is transparent process but different from that for conventional hydro projects.

As with power transmission elements, PSH projects should be delinked from a per-unit energy cost basis for speedy development. The benefits of these projects can be shared across state and national boundaries. An appropriate policy framework that lets costs and benefits be shared can increase the overall value for primary and end consumers.

We must develop market mechanisms and innovative economic models that let energy- storage technologies be evaluated on the basis of merit. Some recent studies indicate that PSH projects would be a more viable alternative for storage requirements over longer durations (that is, about 8-10 hours), while battery storage systems would be more suitable for shorter durations (4-6 hours). For shorter-duration needs, existing PSH units can be deployed with multiple-cycle operations. It would also be worth the effort to evolve a standard nomenclature system for PSH projects, with energy and capacity (in MWh and MW) appropriately marked, as also their energy-to-power ratio, so that their utility for peak energy and power ramping is clear.

For prioritizing projects, in addition to capital cost and energy supplied, PSH developers and policymakers should consider factors that include the location of the project (whether or not it’s under a protected area or within 10km of such a zone’s boundary, and whether it’s off-river or on-river), duration of storage, availability of a pre-feasibility report, detailed surveys, investigations and project reports, etc, and the cost of the energy supplied, as well as the value of the flexibility assured by it.

All this will help India achieve its energy targets.

Arun Kumar is professor, department of hydro and renewable energy, IIT Roorkee

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Updated: 06 Mar 2022, 10:09 PM IST
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