Comments on Power Ministry Draft Guidelines on Pump Storage Projects in India

1. Need for an independent committee to incorporate the feedback On Feb 15, 2023, Union Ministry of Power issued draft guidelines for Pump Storage Projects, inviting comments from stakeholders in 15 days to the email id – hydro2-mop@gov.in. The publication of draft guidelines and inviting comments from the stakeholders is welcome step. However, it may have been good if an independent panel had been constituted to go through the submissions and bring out redrafted guidelines along with a report explaining how the comments were taken into account. This would have inspired greater confidence among the stakeholders that their comments would get serious consideration. It may also have been better if there was longer consultation process then just 15 days.

2. Claims without basis The guidelines say that more Pump Storage Projects (PSPs) are required in view of increasing solar and wind power capacity connected to the grid, to stabilize the grid, store the power to make it available during non-solar and non-wind power hours and for peaking power, reactive power, etc. It describes the PSP as “clean, green, safe, and non-explosive” and “environment friendly” option. No studies or basis are provided for this sweeping conclusion. The fact is that when a major infrastructure intervention like PSP is taken up, it will have significant social and environment impacts. Such unfounded claims have for long been made about hydropower projects, and they are clearly wrong.

3. Steps required before going for PSP For providing energy storage and peaking power, we need to first optimize the power generation from about 50 000 MW of existing hydro, which we are not doing. In fact no agency is even monitoring as to how much of the power generation from existing hydro is peaking power. Secondly, we need to take all available measures for peak management including energy efficiency and higher price of power during peaking hours. Thirdly, we need to ensure that existing peaking power capacities are used, which is not the case currently even as per reports of Central Electricity Authority. Out of existing PSP capacity of 4746 MW, hardly 1450 MW is operating in peaking mode. Fourthly, 97% of India’s existing large dams have no hydropower component. We need to ensure that these existed dams are used to the extent feasible, for creating additional viable and justifiable PSPs. The second dam in this can be off stream. Fifthly, we need to realize that the non PSP storage options like Battery Energy Storage Systems (BESS) are getting cheaper by the day and considering the high cost, high impacts and high gestation period of new PSPs, it may be better to also look at the alternative energy storage options including their costs, gestation period and impacts using life cycle approach. It is based on such an exercise that we need to see how much of the new PSP capacity is viable and justifiable. No such exercise is mentioned in the draft guidelines. All these steps needs to be taken before going for any new PSPs.

4. More than required PSP capacity already underway The draft guidelines mention that according to draft National Electricity Plan there is need for 18.8 GW of PSP and 51.5 GW of Battery Energy Storage System (BESS) by 2032. The draft guidelines also state that 8 projects with capacity of 4745.6 MW of PSPs are already in operation, 4 projects of 2780 MW are under construction and 24 PSPs of 26630 MW are already allotted by the states. This total of in operation + under construction + Allotted PSPs capacity is already way above what is required by 2032 under Draft NEP. In fact the capacity required as indicated in draft NEP is likely to be much higher than what is required since it does not take into account the potential of peaking power from existing hydro capacity, potential of peak management, etc as listed above. So the proposed capacities indicated in the draft guidelines are already much higher than what may be required or justifiable.

5. PSPs must undergo credible EIA and Public consultation process The draft guidelines suggest exemption of off stream PSPs from need for Environment Impact Assessments or public consultation process. This is clearly without scientific basis as all PSPs would have significant social and environmental impacts whether on stream or off stream. Every PSP requires two reservoirs, a tunnel connecting the two, a turbine working as pump in reverse mode, a power house, transmission lines, water supply, approach roads, colonies, among other components. They all will have significant social and environmental impacts like in the case of Purulia pump storage project, whether the project is using existing reservoir or new, whether the reservoirs are off stream or on stream, including on environment, biodiversity, society and disaster potential of the area. The reservoirs in tropical and sub-tropical climate like India’s also have potential of methane and carbon dioxide emissions. To suggest that these projects not require EIA or Public consultation is clearly not in favour of informed or democratic decision making process, optimum use of resources or appropriate decisions in the climate change context.  So the draft guidelines are not backed by science, optimality of use of available resources or need for informed and democratic decision making. One hopes that better sense prevails. Else these could be invitation for many more disasters particularly in the climate change context. It is pertinent to note here that in any case the decision about EIA and PH is not the mandate of Power Ministry but that of MoEF.

6. Indiscriminate environment clearances for PSP capacity by MoEF’s EAC The Expert Appraisal Committee (EAC) of Union Ministry of Environment and Forests (MoEF) for River Valley and Hydropower projects and the MoEF itself has been recommending and giving environment clearances respectively for PSPs at least since 2019 most indiscriminately, without any guidance from MoP or CEA about how much capacity is required. My Dec 2022, a total PSP capacity of 67.105 GW has been given stage 1 environment clearance, when total PSP capacity required even by 2032 is just 18 GW as per NEP. This disconnect between the agencies of Union govt is likely to create havoc on ground in terms of pre project works including EIAs, Land acquisition, testing and surveying on ground, besides taking up so much time and resources of the various concerned, including EAC, MoEF and public funds of government. To stop this, MoP needs to stop these indiscriminate clearances immediately and guide MoEF and EAC as to how much capacity of PSPs are required after conducting a thorough exercise as outlined above. MoP also needs to advise MoEF and the concerned states not to go ahead with these projects till the above exercise is complete.

To show the kind of mindless PSP capacity that the EAC and MoEF are considering and clearing for environment clearance at Terms of Reference stage and also at Environment Clearance stage, we are giving below the list of such projects cleared by EAC since early 2019 to Dec 2022.

PSPs approved for Terms of Reference Clearance (TORC) in 2019 by EAC.
– 900 MW Bandu Nala Pump Storage Project (PSP) at Sirkabad, Bhuda, Shilingda, Ayodhya, Lohadungri, Gurahata, West Bengal.
– 1350 MW Pumped Storage Project (9×150 MW) at Upper Sileru village Kudem Kothaveedhi (M), district Visakhapatnam, Andhra Pradesh by M/s Andhra Pradesh Power Generation Co. Ltd.
– 1000 MW Sillahalla Pumped Storage Hydroelectric Project Stage-I (4×250 MW), in dist Nilgiris, Tamil Nadu by M/s Tamil Nadu Generation and Distribution Corp-ToR: OK, sub com to visit site and finalise TORs (Oct 2019)
– 500 MW Kundah Pumped Storage Hydro Electric Project in tehsil Udhagamandalam, dist the Nilgiris, Tamil Nadu: OK, but sub com to visit site and finalise TORs. (Oct 2019)
– 270 MW Shanti Sagar Standalone PSP, Dist: Davanagere, Karnataka (Dec 2019)
– 5040 MW Sukhpura Standalone PSP, District: Chittorgarh, Rajasthan (Dec 2019, TOR amended in July 2022)
– 800 MW Mhaismal Standalone PSP, District: Aurangabad, Maharashtra (Dec 2019)
– 1360 MW MP 30 Gandhi Sagar Standalone PSP, Dist Neemuch, Madhya Pradesh (Dec 2019) Amended to 1440 MW capacity in Dec 2020.
– 320 MW Upper Kolab PSP (2×160 MW) in Dist-Koraput, Odisha (Dec 2019)
– 500 MW Balimela PSP in district Malkangiri, Odisha by M/s OHPC. (Dec 2019)
TOTAL CAPACITY SANCTIONED FOR TORC IN 2019: 12120 MW

PSPs recommended TORC in 2020:
– 1000 MW Sillahalla PSP in Nilgiris, Tamil Nadu (July 2020)
– 1800 Panari PSP in District Satna, Madhya Pradesh (March 2020)
– 2000 MW Nayagaon PSP, District Aurangabad, Mah (March 2020)
– 2400 MW Ukai PSP (2400 MW), District Tapi, Gujarat (March 2020)
– 2520 MW Shahpur Standalone PSP, District Baran, Rajasthan (March 2020)
– 2720 MW Veeraballi PSP in district Kadapa, Andhra Pradesh (May 2020)
– 3960 MW Ippagudem PSP in district Mulugu, Telangana (May 2020)
TOTAL CAPACITY SANCTIONED FOR TORC IN 2020: 16400 MW

PSPs recommended TORC in 2021:
– 3000 MW Ramapur Gurar Pumped Storage HEP in Sonbhadra dist, UP (Dec 2021)
– 3000 MW Off-Stream Closed Loop PSP in Sonbhadra dist, UP (Dec 2021)
– 1380 MW Bahalpur Pumped Storage HEP in Purulia, W Bengal (Dec 2021)
– 1380 MW Off-Stream Closed Loop PSP in Purulia, W Bengal (Dec 2021)
– 1600 MW Ukai Pumped Storage HEP in Tapi, Gujarat (July 2021)
– 1500 MW Bhavali Pumped Storage Project, Nasik and Thane, Maharashtra (Dec 2021)
– 2000 MW Rana Pratap Sagar Off-Stream Closed Loop PSP Chittorgah-Raj (Dec 2021)
– 500 MW Chitravati Pumped Storage HEP in Anantpur dist, Andhra Pradesh (Sept 2021)
– 1200 MW Kurukutti Pumped Storage HEP in Vizianagaram, AP (Oct 2021)
– 1000 MW Karrivalasa Pumped Storage HEP  in Vizianagaram, AP (Oct 2021)
– 900 MW Somasila Pumped Storage HEP in Kadapa, AP (Oct 2021)
– 1000 Gandikota Pumped Storage HEP in Kadapa, AP (Nov 2021)
– 800 MW Owk Pumped Storage HEP in Kurnool, AP (Nov 2021)
– 1000 MW Yerravaram Pumped Storage HEP in Vishakhapatnam, AP (Dec 2021)
TOTAL CAPACITY SANCTIONED FOR TORC IN 2021: 20260 MW

PSPs recommended for TORC in 2022:
– 75 MW CHIREC PSHP in Surajpur, Chhattigarh (Oct 2022)
– 1500 Bhavali PSHP, Thane, Mah (May 2022)
– 2100 MW Patgaon PSHP in Kolhapur and Sindhudurg, Mah (Aug 2022)
–  1500 MW Tarali PSP in Satara, Mah (Sep 2022)
– 1200 MW Rana Pratap Sagar Off-Stream Closed Loop PSP in Chittorgarh-Raj, (July 2022)
– 1200 MW Ranapur Off-Stream Closed Loop PSP in Nirmal-Adilabad, Telangana (Oct 2022)
– 900 MW Somasila PSHP in Kadapa, AP (May 2022)
– 2720 MW Veeraballi PSHP in Kadapa, AP (July 2022)
– 130 MW Vijayanagar PSHP in Vijaynagar, Karnataka (Apr 2022)
– 800 MW Singanamala PSP, Ananthapuramu, (Andhra Pradesh) (Dec 15 2022)
– 1200 MW Warsgaon Warangi PSP, District Pune and Raigad (Mah) (Dec 15 2022)
TOTAL CAPACITY SANCTIONED FOR TORC IN 2022: 13325 MW

TOTAL CAPACITY SANCTIONED FOR TORC DURING 2019-2022: 67105 MW

PSPs recommended Environment Clearance by EAC.
– 1200 MW Saundatti HEP Integrated Renewable Energy with PSP by Greenko Solar Energy Pvt. Ltd., Tehsil – Saundatti, Dist – Belgaum, Karnataka. Approved in Dec 2019/ Oct 2020/ July 2022 (Project also approved for forest clearance (160 Ha forest land) in June 2022)
– 500 MW Kundah PSP in Nilgiris, Tamil Nadu (Jan 2021)
– 1440 MW Gandhi Sagar Off Stream Pumped Storage Project, Neemach, MP (July 2021)
TOTAL PSP CAPCITY FOR WHICH EC GIVEN: 3140 MW

For details see:
https://sandrp.in/2019/12/31/expert-appraisal-committee-on-river-valley-projects-green-signals-all-in-2019/,
https://sandrp.in/2021/03/06/eac-and-fac-decisions-on-hydro-projects-during-2020/,
https://sandrp.in/2022/01/14/environment-and-forest-clearances-for-dam-projects-in-2021/,
https://sandrp.in/2023/01/03/2022-environment-forest-clearances-to-dams-hydro-irrigation-projects/,
https://environmentclearance.nic.in/writereaddata/Form-1A/Minutes/0501202391239719Final_MOM_38_EAC_15_December_2022(27Dec2022).pdf

7. Competitive bidding necessary for all PSPs The draft guidelines is not recommending competitive bidding for all PSPs. The PSPs require large amount of resources, not just financial, but also in terms of land, water, social and environmental resources. This clearly implies need for optimum decision making. Recently when Moody’s Investor Service downgraded Greenko Engery Holdings corporate family holdings, this issue was highlighted since Greenko has significant investment in PSPs. This is equally true for PSUs taking up PSPs.

8. LADF must be mandatory As PSP projects are likely to have significant social impacts – the provision to do away with Local Area Development Fund (LADF) obligation (Clause 3.7) is ill conceived . Provision of Local Area Development Fund should be mandatory and this should be stated in the guidelines as LADF would help ensure to some extent that the benefits of the project are shared in a meaningful way with the local communities.

SANDRP (ht.sandrp@gmail.com)